May 2008 Archive
Friday, May 30, 2008 
And they don't mean Kirstie & Phil
Timesonline: There goes the neighbourhood: bloodsuckers thrive on credit slump
Of all the crises triggered by America's property crash, the economists never predicted a plague of blood-sucking mosquitoes — spawned in the stagnant swimming pools of unsold or abandoned luxury homes.
The phenomenon is threatening to turn into a disaster for cities such as Las Vegas, where land values in some areas tripled every year during the boom, prompting developers to build thousands of million-dollar mansions, complete with lavishly proportioned swimming pools and outdoor Jacuzzis.
New Labour & Gordon Brown's popularity sink to lowest ever
Telegraph: Labour crisis: No way back for Gordon Brown
The latest YouGov poll indicates Labour now has the lowest level support since the Gallup poll in 1943, a few months after El Alamein. Gordon Brown fairs significantly worse with just 15% of the electorate stating they are "satisified" with him in comparison to a massive 75% stating they are "disatisfied".
That's enough posts about the bull, here is the real world....
Times Online: Property sales slump a third as buyers dry up
''...Housing transactions have slumped by a third as buyers struggle to secure mortgages and house prices slip, official figures show. Nearly 72,500 sales were completed on average each month between November 2007 and February 2008, sharply down from a monthly average of 103,141 in the same period 12 months ago, figures from the Land Registry show....''
May comedy club finale - no hint of a crash it's simply low price base regions drag the rest down
Assetz® Property News Service: Where now?
When Nationwide released its house price figures this week revealing a dip of 2.5 per cent in May, there were plenty of groans but also some caveats. One of these was that the picture is the subject of much regional variation. Such a point was made by the National Association of Estate Agents (NAEA), whose chief executive Peter Bolton King said: "The national sales figures do not tell the whole story. We know from our members that the picture is still very regional with some areas continuing to do better than others."
Comedy club chief lays into Nationwide
mortgagestrategy: Assetz urges banks to stop profiteering
Property investment firm Assetz says banks’ profiteering is lowering house prices. The accusation comes after Nationwide reported a 2.5% monthly fall drop in house prices, while the Land Registry House Price Index recorded a 0.2% drop. Stuart Law, chief executive of Assetz, says: “The marginal 0.2% monthly fall in house prices provides a true reflection of the current housing market and is far removed from the spurious 2.5% fall suggested by Nationwide earlier this week.
Sharing the pain
RTÉ news: Irish house prices down 1.1% MoM, 9.2% YoY
The latest house price survey from Permanent TSB and the ESRI shows that house prices across the country fell by 1.1% last month. This is the largest drop in a single month so far this year. The survey also found that house prices had fallen by over 9.2% since April 2007. An average house was over £7,300 cheaper in April than it would have been in December.
Can anyone help Lee?
Times: Stuck in a Streatham studio flat
Lee is looking to buy a one-bedroom flat with the sale of his studio because he needs more space. In early April he reduced the price of his flat from£169,950 to £159,950 and further dropped the price to £149,950 two weeks ago. He is considering waiting until next spring before a second attempt to sell
Its a Bad Karma - Stupid!
Bloomberg: Moody's Implied Ratings Lab Reveals Ambac, MBIA Turning to Junk
The team from Moody's Analytics, which operates separately from Moody's ratings division, uses credit-default swap prices as an alternative system of grading debt. These so-called implied ratings often differ significantly from Moody's official grades. The implied ratings frequently show that swap traders think debt is in more danger of defaulting than Moody's credit ratings signify. And here's the kicker: The swaps traders are usually right.
But it's okay - repayments are affordable
Guardian: Quarter of borrowers relying on windfall to pay off mortgage
Another poke in the eye for the dim VIs who claim there are fewer interest-only loans now - forgetting that interest-only these days means interest only, with no repayment plan. Even the CML, prince of the VIs, grudgingly acknowledges as much. "Oh sh1t ...."
Get your panic sensitive black sunglasses out
Daily Telegraph: House price data adds confusion to an already volatile market
Basically an article that shows how different the stats are. Clearly there's a view (read the comments) that because the numbers are all created in a different way, it's best to forget looking at them as they are misleading. Except, that is, if they point upwards. "But, as Ms Barnes (Savills) is quick to point out, putting indices and predictions together, especially in the current climate, is not easy, nor possibly even advisable. Ms Barnes said: "Just by looking at an index, you cannot tell what is going to happen to house prices. Indices are backward-looking. The thing is to do is not to latch on to one single month's movement."But unless you are buying or selling at the moment, it might be best not to look at them at all." Ha ha. So if they're bad, ignore them.
Whatever he says, Brown needs oil to stay high
MoneyWeek: Whatever he says, Brown needs oil to stay high
Gordon Brown makes much of wanting to get oil prices down. But he's not being entirely truthful - a fall in oil prices would be disastrous for him.
Priceless BBC!!
BBC: House prices slowdown confirmed
"It was the eighth month in a row during which annual property inflation has fallen, though the decline has not been as fast as suggested by other surveys" Many other reports have claimed that prices have fallen so fast that they are now lower than they were a year ago. On Thursday, the Nationwide said prices were now 4.4% down on May last year and had dropped at a record rate. However, the Land Registry survey, which covers all completed property sales and not just those of particular lenders, suggests that point has not yet been reached in England and Wales"
Land Registry reports London down -0.5% in April
Land Registry: House price index
"London's monthly price change is -0.5 per cent for April, which is a more volatile movement than the -0.2 per cent experienced by England and Wales as a whole" but we know these reflect prices agreed back in December / January, but down trends are accelerating
The final paragraph of this article is VERY interesting
Citywire: Gang groomed bank staff in multi-million pound scam
Mortgage fraudsters wined and dined staff from sub-prime lenders and entertained them with boxes at Premiership games but used chainsaws and guns to intimidate people who stood in the way of their multi-million pound scam, a recent British Bankers Association conference heard. The gang used a simple ‘flipping’ scheme, buying about 60 properties at inflated prices to defraud banks, Simon Chandler, partner at law firm CMS Cameron McKenna, told delegates at the mortgage fraud conference in London.
Credit crunch? Not when it comes to City bonuses
MoneyWeek: Credit crunch? Not when it comes to City bonuses
While the rest of us suffer, it's bonus time for the bankers whose dodgy dealing and wreckless risk-taking led to public bail-outs and worldwide financial anxiety.
Banks??... Lying??... Never!!
Wall Street Journal: Study Casts Doubt on Key Rate
"WSJ Analysis Suggests Banks May Have Reported Flawed Interest Data for Libor LONDON -- Major banks are contributing to the erratic behavior of a crucial global lending benchmark, a Wall Street Journal analysis shows. The Journal analysis indicates that Citigroup Inc., WestLB, HBOS PLC, J.P. Morgan Chase & Co. and UBS AG are among the banks that have been reporting significantly lower borrowing costs for the London interbank offered rate, or Libor, than what another market measure suggests they should be. Those five banks are members of a 16-bank panel that reports rates used to calculate Libor in dollars."
Economic storm to hit Europe
The Telegraph: Euro suffering from 'reserve currency curse' as investors pull out
Long-term private investors are pulling their money out of the eurozone at the fastest rate since the creation of the single currency, according to a report by the French bank BNP Paribas.
When the going gets tough
Yahoo: Japanese man finds woman living in his closet
I wonder if I will find my landlord living in my closet???
Lets fight them on the beaches!!!!
Yahoo: News
I just thought, what would happen if the whole of the UK homeowners got together and simultaneously didn’t pay there mortgage for say a couple of months. whether that would seek out those lending companies who maybe hiding behind there cash flow to stay afloat. Also if we prolonged non payment this may mean that if we all did this, they (the lenders) could all go bust because they wouldn’t be able to deal with everyone defaulting at the same time. They would all go bust and we can keep our houses and never pay another mortgage payment. Anyone with me to start a campaign!!!!!!!
Banks in positive spin shock
Reuters: Banks may be understating key lending rate: report
"Major banks may have understated Libor, a crucial global interbank lending benchmark, masking weakness in the global financial system, according to a Wall Street Journal analysis. Libor has indicated that the banking system was stronger than it actually was at critical junctures in the financial crisis, the paper reported." Looks like they've been lying to us chaps and chapesses
Edmund Conway accepts a bubble crash is under way
Telegraph: Housing crisis: Average home now worth what it was in 2006
Edmund Conway comes round to our way of thinking. He doesn't mention factors that mean this crash could be worse than previous ones. House prices as a proportion of earnings or rents are far higher this time, and the turnaround in the availability of mortgages has been much quicker and more vicious than I remember it being in 1989-90.
Orchistrated boom. Orchistrated bust
The Telegraph: Oil prices to be probed by US regulator CFTC
America's leading commodities regulator has launched an unprecedented investigation into possible market manipulation in the US crude oil market amid record prices which continue to cripple various parts of the global economy.
What does this say about the state of their mortgage book ?
BBC: Rock to take on more debt staff
Northern Rock is to more than double the number of people who work in its debt management department over the next year, the BBC has learned.
Stress tests say OK?
reuters: More UK bank rating pressure possible -Moody's
UK banks "MAY" face further pressure on their debt ratings this year as the credit crisis continues, Moody's Investors Service warned on Friday, although most institutions can "MANAGE" the downturn at current rating levels. Moody's had said it had run stress tests on mortgage lenders' exposure to house price declines, and that as a result it did not expect the "quality of portfolios to deteriorate so much as to eat into core capital". Lovely piece of Doublespeak. But really, who believes Moody's models?
All over the papers today
Independent: House prices now falling at fastest rate since early 1990s
(Yeah, I know this is the zillionth story based on the same Nationwide figures, but let's celebrate while we can.)
The largest monthly drop ever seen in the Nationwide's survey of the property market prompted some economists yesterday to predict a "deep and prolonged" housing slump.
The price of a typical house is now £8,000 less than at this time last year. Negative equity in this downturn will be much more serious than it was during the early 1990s, simply because the price of property has trebled since then. Repossession orders are running at a 15-year high. Figures from the British Bankers Association this week showed a fall of almost 40 per cent in the number of new mortgage approvals.
Further pain seems likely.
House arrest: how many years to escape negative equity?
The Times: Negative equity fears soar after record slump in house prices
This month’s slide in prices prompted economists to forecast that house prices would fall by more than 20 per cent in two years. This would plunge two million homeowners, or one in six mortgage borrowers, into negative equity, according to Morgan Stanley, the investment bank.
Thursday, May 29, 2008
With increasing worldwide food price inflation, what is the long-term solution?
BBC News: World Bank offers $1.2bn food aid
I've not quite worked out what the World Bank's agenda is. From wikipedia, it appears to be 'part-charity/part-profit-making-money-lender'. http://en.wikipedia.org/wiki/World_bank If world food price inflation is real (and not just a reflection of dollar weakness/short-term speculation/etc) and is getting worse, it's going to take more than the World Bank and Live Aid 2010/2011/2012 to stop people starving.
Wheel out the experts!!!
BBC NEWS: Expert reaction to house price survey
Here is some of the reaction from experts to the survey.....................Ha Ha check out the JP Morgan Stooge
UK sure to follow
Economist: Through the floor
America's house prices are falling even faster than during the Great Depression AS HOUSE prices in America continue their rapid descent, market-watchers are having to cast back ever further for gloomy comparisons.
Toights main ITV news carries a story on HPC - they are even promoting the price crashometer
ITV.com: Calculate your house price
Fears for ther UK housing market have deepened after figures from Nationwide showed the average cost of a home dropped by 2.5 per cent in May - the seventh running month house prices have slumped. It is the biggest monthly fall recorded by the building society with average prices now 4.4 per cent lower than a year ago. The report also revealed that a typical home lost almost £5,000 in value over the month. To find out how the value of your property may have changed, click on the link below:
Not just the Landlords suffering.
CNN.com/living: Man pays $30K in rent, faces eviction
Charles Nelson has paid about $30,000 in rent since moving into a spacious four-bedroom home in August. He was stunned when a real estate agent knocked on his door recently and said the home was in foreclosure. His landlord had not paid the mortgage since he moved in and the bank is now demanding the house back. Nelson will also lose his $7,700 security deposit. When he confronted the landlord, he says, he was given a terse response: "That's none of your business." Other victims of HPC to think about !
A small celebration
House prices: Welcome to the bust: Guardian
This is linked to in the previous article but worth a post for its return of the VIs' lame serves. Of course we all knew this already, but always good to see in the newspapers.
I predict -15% to -20% overall this year, then further -10% next as things level off.
Find a property: Market Will Recover By 2010
In a new forecast for the residential market, the estate agency predicts that the economy will progressively weaken over the course of the year and remain soft in 2009. This slowdown will have an inevitable impact on the housing market, but only in the short-term. Price falls will moderate to just 1-2 per cent in 2009 and will climb again in 2010 by 2-4 per cent. Looking further ahead, they forecast that UK house price growth will then surge towards ten per cent by mid-2012 and average around eight per cent a year from 2011-2013. > A bit simplistic but shows that VI sentiment has turned somewhat. I don't expect to see any 'rise' in value from the trough for at least 5 to 7 years
Link to hpc.co.uk blog in a Guardian article
Guardian: House prices: Judgment Day or Apocalypse Now?
At the bottom of the article just before the comments.
From April, but worth a read
Times: Revealed: the truth behind the housing market scare stories
The stream of bad news coming out of the housing market has grown into a torrent in recent weeks, with stories of falling house prices, withdrawn mortgage rates and warnings about payment shocks. Excpet they were never 'stories' - fact is always more surprising than fiction....
Bet Darling wishes he could off-load Rock in similar fashion.
Interactive Invester: Bear Stearns shareholders OK buyout by JPMorgan
Bear Stearns Cos. shareholders on Thursday approved JPMorgan Chase & Co.'s $2.2 billion buyout of the investment bank whose wagers on subprime mortgages made it the largest corporate casualty of the global credit crisis.
Greed accelerates price decline in a downturn
Estateangels: Landlords should look for 40 per cent property discounts
"Landlord Mortgages has advised buy-to-let investors that they should be looking for around a 40 per cent discount on property" "If you are under market value today but are then undercut by 20 per cent in the next year then no, it wasn’t a good time to buy" like they say... PRICELESS!
Here we go, Whoooooooo!!!!!
Yahoo: News
I just bought a house near bristol made an offer from £525,000 asking price, made an offer for £440,000 vendor wanted £475,000 to start with. Told him naaah!! Three weeks later he accepted our offer. I know the property we are buying will go down still, but feel I got a fair deal in anticipation of another lets say 8% drop.
As the crash gathers momentum expect to see some high profile casualties
FT: John Charcol consults staff on redundancies
John Charcol is consulting on redundancies and its chief executive is discussing his future with management according to head of communications Drew Wotherspoon. Wotherspoon would not confirm how many people would be made redundant, but said that the company's chief executive Ian Kennedy was discussing "future roles" at John Charcol with chairman John Garfield. John Charcol's product specialist Katie Tucker has also left with immediate effect.
Just don't tell me the fundamentals are strong!
Times: High street prices in biggest surge since 1992
''...The retreat by consumers from the high street slowed slightly from April despite prices rising at the fastest pace for 16 years, a key CBI survey found today. Sales fell for the second consecutive month in May but the fall was less sharp than expected. They are forecast to rise next month. The figures spell the latest blow to fast-fading hopes for any further cuts in interest rates over the summer. ...''
From the 'Property porn channel' !
Channel 4: House prices fall by 2.5%
Homeowners should be braced for more pain after a shock 2.5% fall in house prices during May, experts have warned. Almost £5,000 was wiped off values after the largest single-month fall in the 17-year history of the Nationwide building society's index. The average house now costs £173,583 - 4.4% lower than a year ago and the biggest annual decline since December 1992. Prices have fallen for seven months in a row.
May 2006: Sydney is the 6th least affordable city in the world
Sydney Morning Herald: Priced out of the boom
If you live in Sydney and have not bought a house yet, you might have to get used to renting, writes Michael Duffy. Late last year an American pro-growth consultancy named Demographia announced that the median house in this city cost 8.5 times the median household income. This was up from a multiple of five in the 1980s, which even then was steep. Demographia defines "affordable" as a multiple of no more than three. The 2005 result meant housing in Sydney was the sixth least affordable of 100 cities looked at around the world. "Sydney house prices are somewhere between 50 and 60 per cent higher than Melbourne house prices … it is still nearly 10 times average earnings in NSW to buy a house, whereas in Melbourne it is about seven times."
Abiogenesis - the facts from Thomas Gold
SEMP: Oil Doesn't Come from Squashed Ferns and Fish??
What IS the evidence for each of the two theories of the origin of oil? Two main observations have favored the biogenic (ferns and fish) origin of petroleum. 1. “Petroleum contains groups of molecules [e.g., “hopanoids,” a material coming from bacterial cell-walls], which are clearly identified as the breakdown products of complex, but common, organic molecules that occur in plants, and that could not have been built up in a non-biological process.” (6) 2. “Petroleum is mostly found in sedimentary deposits and only rarely in the primary rocks of the crust below; even among the sediments, it favors those that are geologically young. In many cases such sediment appears to be rich in carbonaceous materials that were interpreted as of biological origin, and as source material for the petroleum
Consolidation is likely across the Antipodean banking sector
Sydney Morning Herald: Merger raises $64bn question
INVESTORS are preparing for further consolidation in the banking sector, as Westpac tries to gain control of the country's fifth-largest bank. Westpac and St George banks remained in a trading halt yesterday as negotiations continued in a deal that would dramatically alter the Australian banking landscape.
From May 13th 2008: Maybe it will be blocked....
Sydney Morning Herald: Banks agree on mega-merger
Update Westpac and St George have agreed a merger deal that values the combined group at just over $66 billion and will see the smaller bank's investors own 28% of the new financial institution. The terms of the deal will see St George's shareholders receive 1.31 Westpac shares for every one of their own shares. In all, the transaction values St George at $18.6 billion or $33.10 per share. That represents a 24% premium to its most recent closing price of $26.65.
UK house prices have their Wile E. Coyote moment
MoneyWeek: UK house prices have their Wile E. Coyote moment
To virtually nobody's surprise, UK house prices have shot off the edge of the precipice and are plummeting headfirst to the bottom of the canyon. It is unlikely that anyone save a few particularly optimistic estate agents will be surprised by any of this - so how far could things go?
Great slide show
Safe Haven: US Economic Outlook 2008-11+
Great 27 page slide show - all you need to know and very concise
There there Peter, take a pill and have a lie down
Firstrung: House price crash not on the radar - NAEA
Following the release of the Nationwide house price index today, Peter Bolton King, Chief Executive of the National Association of Estate Agents (NAEA), the residential sales arm of the National Federation of Property Professionals (NFOPP), said: "The national sales figures do not tell the whole story. We know from our members that the picture is still very regional with some areas continuing to do better than others. Indeed, our recent survey of agents records some stability returning to the market in the number of sales agreed, the number of viewings before a sale is secured and the average difference between asking and sales price.
Brits one wage packet from the gutter
Firstrung: Over half of working Brits would survive finanically for only four months if they lost their jobs - Egg
A quarter of people in Britain have little or no money set aside for emergency situations, according to research by online bank Egg...And what's more, over half of all working Britons (52%) do not have sufficient savings to support their families were they to find themselves out of work, even if only for the UK's average redundancy period of four months.
FOS witness a huge spike in complaints
Firstrung: Mortgage and banking complaints increase by 300% in 2007 - Financial Ombusdman Service
The Financial Ombudsman Service - the independent organisation that settles disputes between consumers and financial companies, has published its annual review for the 2007/08 financial year. The review shows that during the year, the ombudsman: Handled a record 794,648 consumer enquiries and 123,089 new complaints - a 30% annual increase. Saw the number of mortgage and banking disputes more than triple, and insurance disputes double - while complaints about mortgage endowments fell by 70%.
Good charts on oil, housing, banking stocks, mortghage finance, bond insurers, and gold
Market Oracle: Imminent Banking Stocks Destruction
The totally unreported story lately is that banks face larger losses, as housing prices continue their historic decline, ensuring profound additional bond losses. Banks have openly admitted it. Watch for the bond insurers to basically go bust, belly up, after failing to replace their capital core. The charts tell the story. The financial press networks do not, as they continue to obey their advertisers who pay the bills and dictate the messages, even if totally false. This USGovt Administration might do well to formalize a new cabinet post, Secy of Information, in keeping with a tradition started seventy years ago in Berlin
House prices on cue for 20pc drop by end of 2009
Telegraph: House prices are still on track for a 20pc drop
The plunge in house prices in May is a reminder of just how fast house prices can decline. Of course, given the lack of mortgage finance, as well as weak buyer interest, anything other than another fall this month would have been a surprise. The sheer size of the drop in house prices, without the economy having yet slowed significantly, suggests that this housing market correction will be deep and prolonged.
For a bit of light relief ...
Guardian: Labour cash crisis could bankrupt party leaders
... couldn't happen to a nicer bunch, could it?
It's the ECB birthday party, but not everyone gets cake
MoneyWeek: It's the ECB birthday party, but not everyone gets cake
The European Central Bank is ten years old and there's a big party at its German HQ, but not everyone in the eurozone is celebrating with quite so much gusto. The second ten years are going to be a lot less triumphant than the first ten...
A cyclical correction as the global economy slows would not necessarily invalidate the Peak Oil theory
The Telegraph: Asian countries begin to burst the oil bubble
One by one, countries across Asia and the Middle East are being forced to abandon price controls on fuel and energy, bringing hundreds of millions of consumers face to face with the true market cost of oil. The effect has already begun to chip away at world demand and may ultimately trigger a slide in crude prices.
Problems in the South African economy
IOL (South Africa): Tito hints at huge hike
"Consumers and unions are reeling in shock after SA Reserve Bank governor Tito Mboweni hinted on Wednesday he may raise the benchmark interest rate by two percentage points next month to help bring inflation back within the target range." Wonder how house prices are doing there. Loads of people from the UK bought houses in Cape Town. Wonder what they are worth now? I wonder how they feel about the security situation?
The worst is yet to come
The Telegraph: US and European debt markets flash new warning signals
The debt markets in the US and Europe have begun to flash warning signals yet again, raising fears that the global credit crisis could be entering another turbulent phase.
better late than never
Reuters: Investors flee emerging property markets
LONDON (Reuters) - Cash-thirsty investors are being forced to abandon plans for investment in emerging property sectors because of persistent problems in global money markets, the Royal Institution of Chartered Surveyors said on Thursday.
"Fifth night" destruction accelerates
The Telegraph: House prices fall by biggest margin in 17 years
House prices fell by 2.5 per cent this month - the biggest monthly drop since records began 17 years ago, according to Nationwide figures.
Property fears grow as house prices dive
Evening Standard/Thisismoney: Property fears grow as house prices dive
The Evening Standard's translating today's wipeout figures this: "The housing market today looked as though it was headed into its biggest crisis since the crash of the early 1990s". Surely we're already in that crisis! And it goes cites the approaching blizzard... "The Nationwide figures follow a blizzard of weak news on the housing market, with everyone from rival lender Halifax to the Bank of England and Royal Institution of Chartered Surveyors reporting massive falls in mortgage lending and sales."
Factors will make this slump far worse than 1992......
Times Online: House prices fall at fastest rate for 17 years
''...The slump in Britain's house prices accelerated in May to the fastest level since the Nationwide began records 17 years ago. The price of an average house fell 2.5 per cent in the month, making the seventh consecutive monthly fall in prices, the longest downward slope since the housing recession of 1992...''
It's awful but it's all going to be alright
Nationwide.co.uk: House price falls accelerate in May
Link to latest press release from Nationwide indicating house price falls are accelerating (price are now falling ca 10% p.a. if you take latest quarterly view of falls). Fionnuala's department at Nationwide of course can only see the positives: " * House prices fell by 2.5% in May * Prices are 4.4% lower than this time last year, but remain 5% higher than 2 years ago * Falling house prices combined with higher inflation makes MPC decision more difficult still * Borrowers are better placed to weather the storm than in the 1990s * Tighter credit conditions should help the longer term sustainability of the market"
Biggest drop since 1991
Nationwide: May HP figures
The first of many - now a YoY drop of alomst 5%
Vindication?
Telegraph Online: UK house price decline accelerated in May
On Radio 4 Today's programme Fionnuala Earley remained upbeat and claimed the credit markets were opening again and this would raise hope in the housing market. From utter gloom to rather gloomy Ms Earley? Still, I'm not seeing evidence of FORCED SALES around my area though.
2.5% drop in May
BBC News: House price falls 'accelerating'
Nationwide admitting an accelerating decline in house prices. No short term forecast but a further drop implied.
House price chill in summer of 2008!
Bloomberg: Nationwide - May pricees worst since 1991
the YOY decline is now nearly 5%...already in the first 5 mths....so should we see a frantic revisions from those calling for 'modest single digit declines' in 2008? Contrast the lack of 'modesty' in reported figures by these same players when prices were ballooning upwards over the last few years...:)=
It's catching!
Independent: Credit crunch sends property prices falling worldwide
The housing slump is going global, with the adverse effects of the credit crunch on property values spreading from Europe and the US to the rest of the world.
Enjoy the ride.
BBC News: House Price Falls Accelerating
House prices have recorded their largest monthly fall since 1991, says the Nationwide building society. Prices have fallen by 2.5% during May, according to its latest monthly survey.
Wednesday, May 28, 2008
The New Paradigm for Financial Markets: The Credit Crisis of 2008 and What It Means (Speakers: George Soros and Howard Davies). It was available between 5pm and 6pm (BST) on Wednesday 21 May. This was the first event to be streamed live from LSE via the w
lse: Recording of the live event -The opportunity to trial a live webcast was made possible by funding from George Soros.
The New Paradigm for Financial Markets: The Credit Crisis of 2008 and What It Means (Speakers: George Soros and Howard Davies). It was available between 5pm and 6pm (BST) on Wednesday 21 May. This was the first event to be streamed live from LSE via the www and was a trial webcast.
Boom or Bust ?
Emirates business 24: Steps needed to avoid West-like bust
"For a country, which has almost made a fetish of the property, and which has used the rising value of property assets as the basis of its prosperity for many years, the consequences of this collapse are excruciating"
Confirmed: Gordon is the First Horseman of the Apocalypse!
Times Online: The End of the World Is Nigh: It's Name Is Gordon
Not quite the Gordon you expect but a namesake proclaiming it's TEOTWAWKI.Apparently half of humanity will be toast by July - should clear up the holiday resorts for a nice summer break!
Think rates are coming down eh?...Abbey just put em' up again!
BBC News: Reversal of Abbey mortgage rates
''...Abbey has reversed cuts it made to mortgage rates two weeks ago, one of two lenders lifting borrowing costs. The Abbey is raising rates on new fixed-rate deals by between 0.15% and 0.56% from 29 May...''
BTL = Buy To Leave?
Contractor UK: Buy-to-let investors could be fined
Opps. Looks like MPs have taken a dislike to the BTL market as well.
Hands up if you hate Foxtons
BBC News: Estate Agency Loses Out in Court
I do. I hated them before the documentaries came out showing their illegal fly boarding and sharp practices. I hated them even more afterwards. I hate their minis. I hate their salespeople. I bought a bottle of champagne when Inside Track went bust. I will buy a case of 12 bottles if Foxtons ever go bust.
Too hot to handle
Daily Telegraph: Treasury struggles with Northern Rock
"The feeling is the Treasury is just looking for a rubber stamp" Not too much change with anything else emanating from this office then
Paragon financing buoyed by a £287m rights issue in the face of a 40% interim profit fall
FT: Paragon is 'stable' despite a first-half profit decline
Despite deterioration in the housing market Paragon Mortgages has announced a stable financial position in its latest interim results. In the results for the six months to 31 March this year, the company has announced a profit before tax of £26.4m compared with last year's interim result of £43.3m.The company will pay an interim dividend of 1p a share on 1 August, 7p a share less than was issued at the same time last year. HOW LONG BEFORE PARAGON MOVES FROM "STABLE" TO "INTENSIVE CARE"?
Worse than 92
Daily Mail: Repossessions crisis 'could be worse than 1992'
More homebuyers are at risk of losing their homes than during the property bust of 1992, new research says. A report published by insurance giant AXA yesterday said as many as 1.8million buyers will be struggling to cover monthly repayments by the end of this year. The figure is 200,000 higher than in 1992, when the country was gripped by recession, rising unemployment and mortgage interest rates of 15 per cent.
Mortgage companies very scared to lend ££'s
aboutproperty.co.uk: Mortgage shelf life falls dramatically
The average shelf-life of mortgage products in the UK market has fallen dramatically over the last year, according to new research. At present deals remain on the market for an average of just 11 working days, down from 30 per cent just one year ago, finds research from MoneyFacts.co.uk. Indeed, following the Bank of England's decision to cut the base rate of interest during April, deals appeared and were subsequently removed from the market in as little as six days.
Oil is in a bubble. Yeah, course it is, Anatole
MoneyWeek: Oil is in a bubble. Yeah, course it is, Anatole
Whatever Anatole Kaletsky may claim in The Times, there is no oil bubble and no over-supply. Oil may be over-bought, there may be a correction coming, but the larger trend is upwards, says Dominic Frisby.
map of missing properities
sydney morning herald: Empty homes now for all to see
Gmap of vacant properities in Australia. I like the community aspect of creating this map and the way it shows up where people might be sitting on investment properties. Why isn´t there one of these for the UK? a good addition to HPC.
First time buyers need to be more patient and stop buying houses for a while.
aboutproperty.co.uk: First time buyers finding it harder than ever to get a mortgage
Evidence of the continuing decline of first time buyers in the mortgage market emerged today as Charcol revealed only four per cent of its customers were first time buyers in March. The mortgage broker blamed the lack of mortgage deals above 90 per cent loan to value for the decline. It also accused mortgage lenders of charging borrowers who could not provide a deposit of at least 25 per cent of the value of the property they wished to buy up to three quarters of a per cent more in interest.
Carlyle Group in trouble - no, can't be true, can it?
Times: Stunning collapse of bond fund leaves Carlyle down, not out
The apparent overnight meltdown of a $22 billion (£10.9 billion) credit fund is a huge embarrassment for Carlyle Group, the US private equity firm with unrivalled links to big business and global politics. Even a few weeks ago it would have been inconceivable that a fund operated by such a well-established and respected investment firm that specialised in AAA-bonds would suddenly melt down - especially when it invested in bonds underwritten by Freddie Mac and Fannie Mae, the US government-chartered mortgage groups.
They've got to pay for all their cr@p TV adverts somehow!
Times: Abbey raises cost of fixed-rate mortgages again
Abbey raised the minimum deposit required for most borrowers from 5 per cent to 10 per cent of a property's value to reduce its exposure to the downturn in property prices. It also made it harder for homeowners to take out cheaper interest-only deals. Those who do not have at least 25 per cent equity will no longer be able to switch from capital repayment to interest only - a common way of reducing monthly outgoings for homeowners struggling with rising living costs.
But 1992 is ancient history for most current 'home buyers'
Post Magazine: Axa warns homeowners over downturn
Nearly 16 years since the last major economic downturn in the UK, research published by Axa claims UK homeowners have failed to learn the lessons of 1992 Its research reveals there are more people at risk of falling into mortgage arrears or having their home repossessed, and the vast majority of homeowners have no protection in place to guard against possible financial hardship. Yes - but as you were in your teens or younger in the early 90's why should you know what would happen - house prices always go up - right?
50bn bailout ensures party can go on
guardian: What credit crunch? City bankers receive £13bn bonuses this year
City "workers" have been awarded £13.2bn in bonuses so far this year, suggesting that the credit crunch has yet to be felt in the pockets of most bankers. The figure is down a modest 1% on the same stage a year ago. You have to sympathise, they are doing an important job with great personal risk, doing a hard day's work comparable to soldiers in Iraq. They really do believe it. And after all that they have to take a 1% hit.
Getting better for first time buyers
aboutproperty.co.uk: 'Bad as it's ever been' for first-time buyers
The situation for first-time buyers in the UK property market is presently as "bad as it's ever been", according to campaign website Firstrung. However, with house prices seemingly on the verge of a major correction, the environment could be about to improve. "It's as bad as it’s ever been for first-time buyers, but hopefully we are entering the period where it will start to be good again," said Paul Holmes, chief executive of Firstrung.
Nasty stuff...
Inside Housing: Drug traffickers accrue multi-million pound social housing portfolios
Drug dealers have amassed multi-million pound portfolios of former social housing by targeting landlords in money laundering scams, Inside Housing has learned. Criminals across England have washed cash by offering it to social tenants to buy their homes under the right to buy or the right to acquire, according to Liesel Annible, a fraud specialist at accountants Grant Thornton.
Inflation v Deflation: both at the same time but in different regions
The Telegraph: Back to the 1970s, or the early 1920s?
"We could see a reply of the early 1920s, when the world system split in half as they faced the policy ructions following the Great War. Could this divergence occur in a modern global economy with (mostly) floating currencies? The emerging world inflates into the stratosphere; the Atlantic economies and Japan go into a deflationary slide? "
Wonder what current figurse are
Inside Housing: First rise in empty home figures for nearly a decade
The number of vacant homes in England has increased for the first time in nine years and looks set to rise further.
"sell-and-rent-back company comes to the rescue"
Citywire: Would you sell and rent back your house?
Back in the summer of 2007, before any significant amount of solid had hit the fan for the housing market, a man describing himself as a ‘property investor’, working for a sell-and-rent-back company, posted on a popular online forum I visited occasionally. Now, with homeowners performing cartwheels for mortgages, and repossession supplanting global warming and bird flu as material for the night-time dreads, the whole sell-and-rent-back business has blown up into an industry of around 2,000 operators, and most people know what they think about them.
Very clever: An economic false flag operation
The Telegraph: Gordon Brown calls on Opec to lift production amid surging oil price
Print lots of money - causing oil to go through the roof. Blame in on your political enemies. Very clever indeed - Nice try - but no cigar.
Is the free market dead? Even its most avid supporters doubt it is working.
fundstrategy: Myriad controls stifle freedom in practice
Is the free market dead? Even its most avid supporters doubt it is working. The credit crunch is undermining their faith. Martin Wolf, the chief economics commentator of the Financial Times, declared that: "Friday, March 14 2008 was the day the dream of global free market capitalism died". That was when America's Federal Reserve decided to rescue Bear Stearns. He also quoted Josef Ackermann, Deutsche Bank's chairman, saying: "I no longer believe in the market's self-healing power".The credit crunch shows how quickly rhetorical support for the free market can evaporate. Trouble at Bear Stearns and Northern Rock both brought massive intervention by the public sector.
HSBC can't wait to raise rates
The Herald: HSBC calls for interest rate hike to fight inflation
Europe's biggest lender - yesterday called on central bankers to raise interest rates in order to fight inflation.
Australia heading for an abrupt slowdown in economic growth
afr: Westpac index at four-year low
Australia heading for an abrupt slowdown in economic growth The Reserve Bank rate rises have also brought about "a significant downturn in housing markets," the Westpac report stated
And why is this a bad thing? Oh, it means sellers' fears are fuelled - right.
Independent: Fears for house sales are fuelled by 39% fall in mortgage lending
Another article looking at the issue solely from the perspective of sellers. Classically silly quotes here: "Savings inflows have improved, thanks to rising interest rates and the climax of the ISA season, although every pound saved is one denied the nation's retailers and housebuilders." So every penny kept in the pockets of consumers is bad, and every penny "denied" by those people for housebuilders is a bad thing? Sean O'Grady needs to check his priorities.
We've hardly started the crash yet already UK is showing signs of distress
Guardian: Mortgages: Rise in sub-prime arrears
More than one in five borrowers on sub-prime mortgages fell behind with their repayments in the first quarter of this year, figures showed today. The proportion of borrowers on sub-prime deals falling at least 30 days into arrears - known as a delinquent mortgages - grew to 21.7% in the first three months of 2008, according to ratings agency Standard & Poor's (S&P). This was up from 19.4% in the last quarter of last year. Meanwhile, the proportion of borrowers falling at least 90 days behind with repayments moved into double digits, reaching 10.6%.
Stretching your finances to get on the 'laddder'
Metro: 1.8m ‘cannot pay mortgages’
About 1.8million people will find it hard to pay their mortgage this year, an insurer has warned. More were at risk of losing their homes than in 1992 and have 'failed to learn the lessons' from then, Axa claimed yesterday.
The vice tightens on the homeowner and consumer.
The Times: Homebuyers continue to feel the squeeze from credit crunch
Mortage rates up to 7% from 5% 2 years ago. Mortgage lending down 40%. Credit card debt being reduced a bit. Evidence that some people may be trying to save. Consumer spedning unlikely to recover before 2010.
Tuesday, May 27, 2008
Foxton Loses Appeal on Joint Fees
The Times: Estate agents lose out to vendors in appeal ruling
Three senior appeal judges said that Foxtons was not entitled to a £20,000 fee after a buyer they had initially introduced to a £1.15 million home went to a joint agent that was marketing the property. In a test Court of Appeal ruling that clarifies the law on estate agents’ commission, they said that commission was only payable if the agents had already persuaded the buyer to make the purchase.
Privatised UK Energy Infrastructure Creaking from Underinvestment
Times: Blackouts hit thousands as generators fail
Electricity blackouts hit the UK Tuesday when six power stations shut down with the unscheduled stoppages being seen as an unprecedented sign of the fragility of Britain’s power infrastructure. Operations were cancelled, people were stuck in lifts, traffic lights failed and fire engines sent out on false alarms. Householders were unable to use any appliances or make phone-calls as the blackouts hit areas including Cleveland, Cheshire, Lincolnshire and London. The cause has not revealed with power stations failing across the country as far apart as Essex and Fife.
Profound shift in the political climate since the credit crunch began
TELEGRAPH UK: German leaders are to propose a worldwide ban on oil trading by speculators, blaming the latest spike in crude prices on manipulation by hedge funds.
Uwe Beckmeyer, transport chief for Germany's Social Democrats, said his party would call for joint measures by the G8 powers to prohibit leveraged trading on energy contracts. "It's an extreme step but it has to be done," he told the Berlin media.
This is hilarious [bbc flash movie]
BBC: The housing market dilemma
"A long nine months since our house has been on the market and we've tried everything.... painting the walls.... doing the garden.... we just don't know what to do next..." [can they be serious?] To be fair, two of the experts come to the genius solution that they might just have to........ lower the price. The rightmove expert actually suggested taking it off the market and "relaunching" it [after painting the front door red] to a "refreshed and different market sector".
Homeowners seek to add value in a falling market!
MoneyNews: Halifax Mortgages: Home improvements 'can add value'
Halifax Mortgages proclaims that 28 per cent of homeowners are planning DIY improvements to their property this year specifically to add value. Half of those surveyed believed that decorating and doing the garden up will add up to £5,000 to the value of their home, while 12 per cent think the increase will be between £10 and £25,000. Sadly in a falling market all that hard work and cash may be a complete waste of time.
Debt and more dept
Telegraph.co.uk: First-time buyers spend half of income on mortgage
According to data from Nationwide, the country’s largest building society, the average first time buyer is handing over 49 per cent of their post-tax salary on repaying their mortgages. This is the highest level since 1990 – the depths of the last housing crash and twice the level of ten years ago. “My worry is that people will not be able to borrow themselves out of trouble. Previously people could have re-mortgaged their homes or taken out more debt on their credit cards, but these avenues have been more or less closed thanks to the credit crisis and the faltering housing market. “That is going to leave people with nowhere else to turn.”
Boom. Boom. Boom.Boom. The house price crash is coming.
The Times: US house prices in sharpest fall for 20 years
American house prices are collapsing almost five times as quickly as during the last US recession in 1991, with losses expected to double before any recovery begins, new data showed today. Residential property values fell 14.4 per cent over the first quarter of 2008 compared with the same three months the year before, according to the S&P/Case-Shiller US house price index. The decline marks the worst performance since the index began twenty years ago. In March alone, some cities such as Las Vegas suffered a 4.4 per cent drop in real estate values, while homes in Miami fell 4.5 per cent. Over the year as a whole, Las Vegas homes have lost 25.9 per cent of their value.
Why commodities are rising
safehaven: Monetary Stuff
"As far as we can tell, most people attribute the large increases in commodity prices to NON-monetary factors such as strong growth in China, price gouging by greedy corporations, OPEC, the Iraq War, government stupidity, and the weather (including "Global Warming" and natural disasters). Some of these non-monetary factors are significant, but our assertion is that few people appreciate the key role being played by the systematic debasement of all national currencies."
How long will the UK keep an unrealistic 2% inflation target?
Bloomberg: Inflation Hurts German Consumers, French Companies
Confidence among French executives and German consumers fell more than economists forecast as surging prices sapped purchasing power and raised production costs.
Mortgage brokers caught inventing incomes for clients
Sky News: Sky Exposes The Dodgy Mortgage 'Deals'
Last November, the Financial Services Authority (FSA) warned there were an unacceptable number of dishonest mortgage brokers. Six months on and our investigation has revealed that bad practice still exists.
Will be interesting to see how our 'services-based economy' holds up in the new era we're entering.
BBC News: Services fall 'worst since 2001'
"Companies such as restaurants, bars and cinemas have had their biggest drop in business activity since 2001, according to the employers' group the CBI...Profitability was the weakest since the survey began in 1998 and employment in the sector fell for the second quarter in a row. " And this is just in Q1/Q2 - the start of it. Expect the job losses to start around October, with repossessions really ramping up from beginning of 2008
Because computers take longer to move larger numbers
Times Online: Same-day bank payments system goes live
A new service to speed up cash transfers between bank accounts has gone live, but many people will not see any immediate difference. The Faster Payment Service will enable electronic payments, made via the internet or phone, to be processed in hours, rather than the four days it has taken. By 7am on the first day, 898 payments totalling £461,383 were made successfully under the new scheme. However, critics have been disappointed at the slow adoption of the service by many of the UK's biggest banks.
14.4% drop in a year - and accelerating! (in the US I'm afraid to say)
Bloomberg: S&P/Case-Shiller U.S. Home-Price Index Falls 14.4%
Home prices in 20 U.S. metropolitan areas fell in March by the most in at least seven years, pointing to continued weakness in the housing market that will further drag on the economy. The S&P/Case-Shiller home-price index dropped 14.4 percent from a year earlier, more than forecast and the most since the figures were first published in 2001. The gauge has fallen every month since January 2007.
England's green and pricey land
MoneyWeek: England's green and pricey land
While Britain's residential property market remains full of doom and gloom, the price of farmland is rising at a record pace. But why has farmland – traditionally a money pit – suddenly soared in value?
Service sector takes a hit
BBC News: Service sector in '7-year slump'
Companies such as restaurants, bars and cinemas have had their biggest drop in business activity since 2001, according to the employers' group the CBI. Profitability across the service sector as a whole was at a decade-low.
Rental market crashing as well
Fool.co.uk: Rental market bounces back
The housing market is collapsing. OK, perhaps that's a rather sensational statement, but nevertheless, I think there's more than a grain of truth in it. Buyers are finding it increasingly difficult to finance property purchases or are holding back for fear of buying in a falling market. Meanwhile sellers are struggling to achieve their asking prices. Indeed, according to figures from Hometrack's National Housing Survey last month, sales are going through at just 93% of the asking price on average. And property sales are taking around 50% longer to complete than they were 12 months ago.
Ouch! Although I would like to know how it goes
Reuters: Spaniard plans raffle for flat to escape mortgage
This caught my attention. Admittedly, that's what it's there to do but it makes me wonder how long before we see novel ways of "selling" property here crop up. I mean besides having deposits or legal expenses "paid" for you.
Meanwhile, back in the real world....
Times: Mortgage approvals down 40 per cent on tighter lending
"Mortgage approvals for home purchases in April were nearly 40 per cent lower year-on-year, despite rising slightly from a record low in March, new figures show. Mortgage lenders are still tightening their lending criteria and increasing their rates in the wake of the credit crunch to limit the number of mortgage applications they receive, making it increasingly difficult for borrowers, especially first-time buyers, to obtain a home loan."
Of course, in the wrong hands that could result in customers being refused mortgages or life insurance.
The Herald: A picture of something chillingly Orwellian
Imagine a world where the government knows where you are all the time. Imagine a world where a man you've never met knows you are about to get married before your beloved has even popped the question. Imagine a world where you can be refused a mortgage or life insurance because someone has mislaid or sold your personal details. These aren't scare stories. There are already hundreds of sites selling medical histories and other sensitive data. I try to protect my privacy by shredding mail, refusing loyalty cards and always ticking the box on forms refusing permission to share my details. What's the point when the new information superhighway is a two-way street between government and the commercial world, with my personal details moving along it in both directions?
Three shocking examples of the plight we’re in
MoneyWeek: Three shocking examples of the financial plight we’re in
Getting a mortgage with complete strangers, calls for the Bank of England to muck about with the CPI and bankers rigging prices all demonstrate what a mess we're in...
Dr Evil Has His Say
Timesonline: George Soros: The economy’s doomed
‘It’s like a Greek tragedy,” says George Soros, with a smile playing around his lips. “You can see the trouble coming and you can’t avoid it.”
Get 3 x your deposit back
BBC: Tenants' money 'still not safe'
If you are about to come to the end of a tenancy & the landlord/agency hasn't signed over your deposit to an official scheme, you can get 3 x your deposit back: "If a landlord does not sign up to a scheme, it is up to the tenant to take their landlord or agent to the county court, which has the powers to award a tenant three times their deposit."
"As a form, the hedge fund dates back to the 1940s. But this population explosion is of very recent origin."
SOTT: Signs Economic Commentary for 26 May 2008
First, mortgage-backed securities. Starting in 1980 - "when scarcely any such thing existed" - they total $3.5 trillion-worth today. Then he cited "the whole range" of other newly-born asset-backed instruments - automobile loans, equipment loans, student loans, credit card-backed debt derivatives.. Take hedge funds, for example; Ferguson notes that in 1990, those financial life-forms known as "hedge funds" numbered around 600 (also including funds of funds). Now they've reproduced and multiplied up towards 10,000. "Inflation will return to the 2% target," claimed Mervyn King, head of the Bank of England - and one half of the financial furry freak brothers running Anglo-American monetary policy - last week. "Growth will eventually recover to a sustainable rate."
Liar Loans Inaction - Watch The Sky News Undercover Video
SKY NEWS: VIDEO OF LIAR LOANS - WATCH THIS!!
Sky Discovers Dodgy Mortgage Deals A Sky News investigation has found evidence of mortgage brokers misleading lenders and arranging loans they know buyers can't afford. Joel Hills found some brokers seem prepared to bend the rules to seal a deal.
Well - More Good News For GB,
MSN: Is the Uk Govt Going Bust?
People are seeing through the lies and deceit now! The UK has been sold down the river. Inflation, crime , debt, employment, NHS, prisons, immigartion. You name it, all messed up by Labour.
Prime borrowers able to refinance are doing so in droves
FT: Recent borrowers hit problems earlier
Sean Hannigan, a director and credit analyst at S&P, said the terms of subprime loans, including those with relatively low upfront rates, are typically so punitive that even if borrowers need to pay a penalty, it is worth their while to refinance as soon as possible. The slowing of prepayment rates may also suggest that sharp house price inflation, which improved the position of earlier borrowers with poor credit, is no longer helping recent borrowers. In addition, the data suggest more recent borrowers are running into financing difficulties earlier in their mortgages.
Roughly 80 per cent of all subprime mortgages have been securitised, as have about 20 per cent of all prime mortgages.
FT: Sharp rise in overdue mortgage payments
“We have seen numbers like this two years ago.” However, he added: “The difference today is that borrowers are not being helped by rising house prices as they have been in recent years,” he said. “In previous years, homebuyers in difficulty could find another lender to refinance the mortgage. It could mean that now more homes wind up in repossession.” The fact that a rise is occurring while employment is strong and interest rates low suggests that it may not only be macroeconomic factors making it hard for homeowners to pay their debts.
Some relevant news for a change
Reuters: Mortgage approvals down sharply
Mortgage approvals for house purchase were nearly 40 percent lower than at the same time last year in April, although they rose from March's record low, a survey by the BBA shows.
"Keep pumping, Darling"
Digital Look: As Safe as Houses?
Intelligent article from Justin Urquhart Stewart on how houses have become not just one bubble but a series of little ones that threaten to, or have already, combined (and then burst).
what many leaders now see as a much bigger threat to international stability than terrorism.
The Guardian: what many leaders now see as a much bigger threat to international stability than terrorism.
Summit in Rome follows record spikes in cost of rice, wheat and dairy products • Calls for urgent action to tackle serious threat to international stability. The urgency of the meeting follows historic spikes in the price of some staple foods. The price of rice has doubled since January this year, while the cost of dairy products, soya beans, wheat and sugar have also seen large increases. Thirty-seven countries have been hit by food riots so far this year! Stability? inflation? Jobs? Mortgage defaults? Just how low can house prices go?
Would you spend the night in your car for $100 - I would
CNN: Long lines for $1 gas
Video is dated 14th May, apologies if it’s been posted before but it seems quite apt with todays protests in London. I guess, despite the difference in fuel costs between here and the States, the average US citizen feels like they’re being screwed too. Maybe it won’t take too long before we see queues like this if the hauliers decide to start blocading refinery’s again.
Estate agents: Crisis? What crisis?
The Independent: Estate agents: Crisis? What crisis?
Recent reports on house prices have been universally downbeat. But a National Association of Estate Agents (NAEA) report, published today, says that in April the number of agreed sales, the number of pre-sale viewings and the average difference between the asking and selling prices all levelled off, belying alarmist predictions that the market is heading into freefall.
Before anyone comments - EU Treaty and HPC are related
The Telegraph: Free enterprise in Europe hangs on Ireland's EU vote
"Can anyone really claim that the Lisbon Treaty is rooted in the democratic assent of the French, Dutch, British, Danes, Swedes, Finns, Poles, and Czechs? We have the spectacle of Gordon Brown refusing to sign the treaty in public because of the potent danger it poses to his Government. A British prime minister slinks away to a private room to commit Britain to an arrangement that alienates the powers of Parliament - in perpetuity and perhaps illegally - knowing that his people would vote 'no' by crushing margins if given a chance. How on earth did we arrive at such a sorry state of affairs?"
No bottom to decline in house prices
Market Oracle: US and UK Housing Bear Market Trends
The housing bear markets continue to bite into economic activity as the US heads for recession this year and the UK during 2009. The US is still showing no signs of a housing bottom having fallen by 3.1% in the first quarter of 2008 according to government statistics, and foreclosures rising to a all time high as borrowers walk away from homes sinking into negative equity. The UK housing bear market has now entered its 9th month following the peak of August 2007, having gone negative on a year on year basis for April 08 data, which was one of the primary reasons for the meltdown in the UK Labour parties vote in the recent string of May elections.
MP's demand 62% pay rise
Timesonline: MPs demand £23,000 tax-free grant to hide expenses
"Senior MPs on the House of Commons Commission have recommended a salary rise from £61,820 now to about £75,000 after the next general election, expected in 2010." ...this equates to paying themselves an above inflation pay rise of 23%. Wonder what the police, nurses, teachers etc will have to say about this, especially when you add on the new requirements for housing allowance of 23.000GBP, making their pay rise a whopping 62%. Corruption alive and well in Whitehall. It's so good to see the powers that be are in such good touch with their constituents.
UK Housing Bear Market Trend Analysis
The Market Oracle: US and UK Housing Bear Market Trends
The UK housing bear market has now entered its 9th month following the peak of August 2007, having gone negative on a year on year basis for April 08 data, which was one of the primary reasons for the meltdown in the UK Labour parties vote in the recent string of May elections.
Monday, May 26, 2008
Oil, HPC, it's all related
This is London: Forget house prices, it's oil that will sink Gordon
"The soaring cost of oil may not be the Prime Minister's fault but there is something about Gordon Brown that makes you want to blame him for it anyway - as the voters in Crewe and Nantwich effectively did on Thursday, the day that US light crude reached a new record of $135 a barrel. [...] Highly priced oil and the economic disaster it unleashed in the Seventies eventually swept Jim Callaghan from office and Labour into the political wilderness where it languished for 18 years."
Looks like Inside Track style companies will be classed as Unfair Traders
Times: Law shake-up in crackdown on rogue traders
A new legal weapon came into force over the weekend in a government crackdown on unscrupulous companies that mislead customers or use aggressive sales tactics.
New builds coming down in price?
Easier Property: Bag a new build bargain with George Wimpey
Buyers at George Wimpey North Yorkshire's Thorntree Vale development in Thornaby can buy a brand new semi-detached home for a lower price than that of an average older property in the area. The three bedroom Ryton is on the market for £124,950, whereas the average price for an older semi-detached property in Thornaby, which does not boast all of the added extras of a George Wimpey home, is £148,716*.
The big test is here - it's now or never
FTG: Brown and the Bank of England
"Mr Brown has been hinting, not too subtly, that he hopes the Bank will cut rates. It looks increasingly unlikely that he will be around to deal with the long-term consequences, after all. But watching the prime minister chipping away at the foundations of his first and greatest political achievement merely adds to the sense of watching a Shakespearean tragedy unfold. Thankfully, the MPC is unlikely to respond to political pressure. Expect a robust fight against inflation." This will be a hot topic the comming months: will the BOE stick to its targets or will they go soft when it really matters. GB's own creation is coming back to bite him... surely he must regret making them independent now.
Debts too high to cover.
Telegraph: One in four faces ruin if unemployed.
The UK economy is going to rip apart at the seams, and the first stitch has gone.
Only £2850 but a profit of £100k - you just can't lose
FT Businesses for sale: Estate Agent New Franchise For Sale
If you're still kicking yourself for not getting in on the Buying Off-Plan boom, you know, where you buy a property Below Market Value and then sell it on for a bundle. Don't worry, here's the next unmissable investment opportunity. This business will always make money, people will always need somewhere to live and will always need a professional to sell it.
At last, an Estate Agent that knows how to value something honestly … his business.
FT Businesses for sale: Independent Estate Agency *UNDER OFFER*
Location Croydon, Surrey, United Kingdom Financials Asking price: £17,500 Business description ... There are a small number of sale properties on the books. Competition / Market Other estate agency offices nearby but there is ample business from the densely populated surrounding area to support them all Me thinks, if there was ample business from this densely populated area, they would have more than a ‘small number’ of sale properties on the books.
From a 2001 Article... and still as true today
Telegraph: Luke Johnson's view: Trophy wives cost millions
Trophy wives are important acquisitions for men who have everything. These tycoons have already got the yacht and Gulfstream jet. They frequently marry young and have worked obsessively to amass great fortunes. They have achieved wealth, fame and power, but they no longer find their first wives sexy or sophisticated enough for their new found status. Perhaps they never had time to sow their wild oats when they were young, since they were too busy empire building. They reach late middle age and they want to relive their youth - roll on the Harley Davidson and leather jacket, turn up the disco music - let's party!
Trophy Wife seeks divorce - only 8,000 miles on the clock
Telegraph: City job loss sees trophy wives seeking divorce
Hilarious! With thousands of job losses announced and more rumoured to be on the way, divorce specialists say that some wives want to secure good divorce deals before their husbands lose their jobs. Consequently, divorce specialists have seen the number of inquiries treble.
Whoopsie.... How many marriages were founded on the illusion of affluence
Guardian: Love is ... a good job and a hefty salary cheque
'When money looks like flying out of the window, love walks out the door,' said Sandra Davis, head of one of London's leading legal firms, Mishcon de Reya. 'Redundancies are still only being whispered about in the big City firms, but already we have never been busier with stay-at-home spouses asking what their options are.'
Buyer wait for prices to CRASH!
Telegraph.co.uk: House prices fall as buyers 'go on strike'
House prices falls are accelerating as home buyers "go on strike", according to the latest analysis of the housing market. The average house is now worth 1.9 per cent less than a year ago, a report from Hometrack will say today. This is the largest fall recorded so far by any of the leading property indices and is the latest evidence that Britain's home owners should brace themselves for a protracted slowdown in house prices. Property values have now fallen eight months in a row, says Hometrack, the property research company, with sellers achieving just 92.3 per cent of their asking price, on average. This is the lowest level since the survey began in 2001.
House repossessions rising VERY sharply
WSWS.org: House repossessions rising sharply
Figures released by the UK Ministry of Justice (MoJ) on May 9 showed a marked increase in homeowners facing court action for repossession of their homes. The figure of 37,740 for the last three months was an increase of 17 percent on the last quarter and a 20 percent increase on the figures one year ago. Repossessions have risen in most of the English regions. The figures indicate that lenders are quicker to resort to the threat of court action. A press release issued by the housing charity Shelter explained that at the time of the last housing crisis in 1991, there were 2.5 court actions initiated for each repossession that went ahead. Last year the figure was five.
Black swan on the horizon
Kitco: Fuel Price Shock Coming
Gas prices are set by purchases that are forward contracts by suppliers. These contracts are one or two months ahead. That means that, when the newer contracts start to come into effect, gas prices will start to reflect this $120/130 oil. That’s this summer. A few months from now, it’s estimated that gas prices can reach $5 to $6 at that point.
Coming to a Country Near You?
Bloomberg: California Prices Down 32%
May 23 (Bloomberg) -- California home prices tumbled 32 percent in April from a year earlier as ``distressed'' properties and a lack of financing cut demand, the state realtors group said.
The final coffin nail is recession
Independant: Number of homes on market surges but buyers stay away
"In order to get sizable price falls, a large majority of transactions need to be 'forced' sales which are mostly prevalent in periods of rising unemployment and recession." The UK has sizable personal debt, large government debt, increasing debt service costs, inflation in consumer goods, and a collapsing financial sector.
EA Marsh & Parsons "it's worse in London we've seen more than that"
BBC Five Live: The Wake Up To Money: House price falls
8 mins in Prices in the housing market continued to fall in May according to Hometrack. We speak to Peter Rollings, managing director of the estate agent Marsh & Parsons.
Speculators and big oil companies are being trotted out as scapegoats
Market Oracle: US Dollar Crisis Not Oil Crisis
"The reality is that after years of reckless consumption and dollar debasement, Americans are now being priced out of markets over which they formerly held unchallenged title. As more affluent foreigners consume more of the resources and products they previously supplied to us, Americans are being forced to cut back. The rising dollar-based price of gasoline is simply an illustration of this global trend. "
Jeremiahs are no longer solitary figures
Economist: Structural cracks
PESSIMISTS used to wear a sandwich board announcing “the end is nigh”; now they just set up a website. And Jeremiahs are no longer solitary figures, particularly when it comes to the housing market. Proof that misery loves company can be found on the forum XXXX where the running total of discussion topics this week was 14,455, eliciting some 171,609 responses.
Falls accelerating
Telegraph: House prices fall as buyers 'go on strike'
House prices falls are accelerating as home buyers "go on strike", according to the latest analysis of the housing market.
The air you breath....
BBC News: MPs back personal carbon credits
''...The government should go ahead with a system of personal "carbon credits" to meet emissions targets, MPs have said. ...''
BTL is doomed!
LettingNews: Buy to let reaping benefits of market downturn
BTL is entering the next phase, as I predicted monhs ago: "James Scott-Lee, a spokesperson from RICS, said that weaker demand from buyers had forced sellers back into the rental market where yields were rising" therefore rentals will fall since supply is rising. No! the pundits still maintain that "The sales market's loss is the lettings market's gain" Blood and tears underway!!
Happy reading
Moneysavingexpert.com: Central London anyone having a hard time selling?
Have been trying to sell my property for nearly a year now,every offer has fallen through,and the last 2 because of the problems with mortgage /bank rates. This thread is well worth a read and gives an insight to whats going on in London at the moment. Expect this sort of thing to become more common as the credit crunch tightens and the ripples spread wider!! Happy days.
Buyers are on Strike, apparently
Bloomberg: U.K. May House Prices Fall for an Eighth Month, Hometrack Says
U.K. home values fell for an eighth month in May and will probably drop further, Hometrack Ltd. said. ``The `buyers' strike' continues,'' said Richard Donnell, director of research at Hometrack, in a statement. ``Pricing looks set to remain under downward pressure over the coming months.'
High house prices are just redistributing wealth, not creating it
Telegraph: Lower house prices can make you happy
A great deal of sense as usual from Roger Bootle
American Bankers, British Humour
WallStreetFighter: Buffett Enjoys Comedians Explaining Finance
Warren Buffett and his shareholders gathered over the weekend in Omaha, Nebraska for the annual Berkshire Hathaway 'Woodstock for Capitalists'. It's a big pep seminar where Warren unleashes his shiniest pearls of wisdom, and people sell books and jump on moon bounces. Good times all around. According to many of the participants, a highlight of the entire program was the following clip explaining the subprime crisis by the famous British comedians John Bird and John Fortune:
Great work deserves great reward.
Business.scotsman.com: HSBC pay plan raises eyebrows
BANKING heavyweight HSBC faces a revolt over directors' pay at its annual general meeting of shareholders on Friday. - £120M for 5 directors over 3yrs, performance related of course. I wonder how many bonus' are repaid for bad performance. They'll probably be given a golden goodbye. Win-win situation. Any jobs on the board?
Your money's safer in the bank
Reuters: House prices fall annual 1.9 pct in May
Hometrack calculated house prices fell by an annual 1.9 percent this month, its biggest fall since November 2005
Hometrack: -0.6% MoM, -1.9% YoY
Times: House prices fall again
House prices are stuck in decline, with values slipping around the country for the eighth month in a row, according to the latest figures. Hometrack says the average property is worth 1.9 per cent less than a year ago - the worst figures since 2005. Figures also showed also showed a fall in new buyer registrations, a rise in the length of time a property spends on the market and a smaller proportion of the asking price being achieved.
Looks like nobody else wants to take responsibility - Not yet anyway.
Reuters: Labour heavyweights back Brown as leader
Two senior members of the government backed the prime minister. "This does qualify as fiction," Miliband told Sky News. "Gordon was elected as the right man for the job last year and he's the right man for the job this year." I guess he's waiting for the worst to emerge, and then let the dust settle a bit.
Sunday, May 25, 2008
The property market vicious circle for the economy
Guardian: Coming soon to Middle Britain: The Doldrums
a sudden slowdown in a property market that until then had seemed on a never-ending climb. Not only have prices started coming down but buyers and sellers are staying away from the market in droves. For shops and businesses reliant on the property market this can mean only one thing - a sharp slowdown in turnover and a subsequent fall in profit until many will shut. At this point in the circle the doors of the local job centre start swinging. Forced to wait for work or take lower-paid jobs, the people going through these doors will start to struggle with their repayments. Red credit-card bills will appear on people's mats, while missed mortgage payments will quickly lead to more repossessions!
The absurdity of New Labour
BBC News: Jail staff 'fear Muslim inmates'
Labour's obsession with human/equall rights has completely prevented them taking the tough decisions ti address Law & Order, this is a classic example:- ''...A review of Whitemoor Prison in Cambridgeshire found staff were fearful of doing the wrong thing, "shifting the power dynamic towards prisoners"...''
Miliband confides ambitions to friends
Sunday Times: David Miliband is ready to save new Labour
It seems a shame that Miliband's so called friends are unable to keep close to their chest the secrets of David Miliband who according to this article has said he is ready to take the top job if Gordon Brown steps aside. At a time when senior Labour insiders claim that half the cabinet have concluded they will not win the next election under Brown, one of those who has lost faith is one of Brown's closest allies, Alistair Darling. My own view is that the title of the article from the Times is wrong and it should be, "Miliband, ready to build a New Labour". The current New Labour has been a dismal failure that has been plagued by spin and has always suffered from a Cabinet that were weak.
Housebuilders in trouble
The Economist print edition: Home truths
..the Lumiere building, which is due to be finished in 2011, may represent a final roll of the dice in a speculative property game from which the players are silently stealing away.
The Giant Pool of Money
This American Life: The Giant Pool of Money
A special program about the housing crisis produced in a special collaboration with NPR news. We explain it all to you. What does the housing crisis have to do with the turmoil on Wall street? Why did banks make half-million dollar loans to people without jobs or income? And why is everyone talking so much about the 1930s? It all comes back to the Giant Pool of Money.
It's him again!
The Times: Analysts predict Bank rate will be cut to 4.5%
ECONOMISTS still expect further interest-rate cuts before the year-end in spite of sharply rising inflation and a warning from the International Monetary Fund this weekend that there is no scope to relax monetary policy in the short term.
My landlord has just lost £20k!!!!
Times: Capital depreciation
Both Houslow and Kingson are down 4% in a month!! How house prices are faring borough by borough
Letters page - BTL newbie gets pwned!
Guardian: Instant Access ... to buy-to-let misery
I was sold a buy-to-let flat in Leeds in June 2005 after going to an impressive Inside Track seminar. This convinced me property was a safe route for my children's financial future. But the figures never worked out - I am paying out some £240 a month more for my Birmingham Midshires loan than my rental income. And now I am behind with my mortgage. Instant Access will not buy the flat back or offer any material help. What are my options? Will I lose my home? [Property was valued at £219k, with 40k "discount" and estimated rental income of £1050/month. It is now lying unrented even at £575/month, and the property is valued at £120,000. PWNED!!!]
Bear's breakfast in today's paper.
The Observer: Coming soon to Middle Britain: The Doldrums
A double page spread on housing and economic woes in typical middle England. Tales of houses not selling, businesses feeling the pinch and estate agency branches closing in Ely and Hereford. One particular house reduced from £325,000 to £250,000 and still no interest.
Fraudster
Daily Mail: Blair took out £300,000 mortgage on house that was 'worth just £150,000'
Tony Blair took out a mortgage of almost £300,000 on his constituency house – double its estimated value – to help fund his growing property empire. The Blairs remortgaged with the Cheltenham & Gloucester building society to borrow £297,000 against the value of the house. The property was estimated to be worth about £150,000. After years of booming prices, the house’s value is now estimated at closer to £250,000 – still £50,000 less than the total mortgage. At the time of the remortgage, Mr Blair was negotiating the £3.6million purchase of his Connaught Square mansion. Financial experts were puzzled at how he managed to secure financing on his Prime Ministerial salary.
"The darling locations of the City bonus boom will never be ugly ducklings, but some of the shine has come off the top of the market.”
Times: What's happening to London house prices?
As half of the capital’s boroughs record price drops, Helen Davies asks if we are in for a slump or a slide
Hold on to your hats - we're going down!
Sunday Times: 100,000 in negative equity by year end
More good news from The Sunday Times!
Brown should stop meddling
Times: Oil costs up, house prices down - good news
"With no loss of green belt and no “eco-towns”, house-buying has been brought within the range of millions of new buyers, albeit under a more disciplined mortgage regime. Only builders and estate agents get hurt." [a bit premature, but soon...]
Taxpayers funding BTL
guardian.co.uk: Opportunity knocks for landlords to help homeless
A pioneering scheme in London offers landlords a chance to rent their flats for a guaranteed income, pay low running costs and have almost no loss-making periods without tenants - as well as helping to ease the capital's homelessness crisis. ...You receive a rental income every four weeks so you have 13 payments a year, effectively coming from the government so there is no real worry about not getting payment.
RPI to undercut CPI? - time to switch!
Telegraph: Labour cannot doctor sky-high inflation
With house prices weakening, we are about to enter a rare phase when RPIX falls below CPI. So changing the target index now would be seen by the markets, equally correctly, as a politically inspired ruse. And that would inflict even more damage on the inflation-fighting credibility of our monetary regime.
Saturday, May 24, 2008
U.S Economy is shagged (Not in the good way)
Reuters: Buffett sees "long, deep" U.S. recession
The United States is already in a recession and it will be longer as well as deeper than many people expect, U.S. investor Warren Buffett said in an interview published in German magazine Der Spiegel on Saturday. He said the United States was "already in recession" and added: "Perhaps not in the sense that economists would define it" with two consecutive quarters of negative growth.
Fun online poll
LabourHome: Coalition of the willing
Rather surprisingly, I'm only losing by 6-votes-to-9.
Out of sync. Rates will rise as borrowing dries up.
Bloomberg: IMF raises growth forecast. Warns on rates.
IMF warns that the UK must be on alert to raise rates as soon as further signs of an inflationary spiral appear, such as wage inflation. In my view, the government cannot hold rates down long enough for the effects of reduced borrowing to lower inflation. So the final inflationary flare off a la Japan will be accompanied by being forced to raise rates although borrowing will have collapsed. -> deflationary recession
Major U.S. city defaults on debt
Telegraph: Californian city of Vallejo declared bankrupt
An entire Californian city in the once-booming Bay Area has become the latest victim of America’s property crash when its elected leaders declared bankruptcy. The fate of Vallejo has sent shock waves across the country Vallejo’s municipal leaders signed off on exorbitant wage deals during the flush years of the real estate boom. However, a crippling 26 per cent was wiped off the value of house prices in Vallejo over the 12 months to March, sharply reducing takings from property taxes.
Are we heading back to the 1970s?
MoneyWeek: Are we heading back to the 1970s?
Stock markets may be up, but that doesn't mean it's business as usual. Inflation is getting out of hand and policymakers don't seem to have learnt from past...
Max Hastings prescribes the medicine we desperately need...
MailOnline: In the second decade of the 21st century, what will British people want from their government?
Our economy is sick, our society fractured. If he wins, Mr Cameron may face a tougher task than Mrs Thatcher. People are frightened by the cost of filling the car, the spectacle of their houses falling in value, pensions being squeezed, utility bills rising, holidays suddenly looking unaffordable.Now, storm clouds are breaking. If this government tries to raise an umbrella, we reckon that it will either cost us a fortune or collapse in Chancellor Alistair Darling's hands.
The Reality of House Prices May 2008
Hair commercial: May 7th Auction results
Lot 18, 22 Cambell Close,Chelmsford Sold at Auction for 165k.This is nearly 50% below very similar properties, on the market in the same small cul de sac.The Crash gathers momentum.
House market gridlock
BBC News: House sales to hit '30-year low'
The number of properties sold in 2008 is likely to be at its lowest level for 30 years and 30% lower than last year, according to a housing expert. The prediction by Richard Donnell, from website Hometrack, comes as uncertainty in the market prompts many would-be buyers to wait in case prices fall.
Back to normality?
Telegraph: Interest rate rise is on the cards, says IMF
The next move in interest rates may have to be up rather than down, the world's leading economic authority has said in a further blow to struggling households.
Gordon's shared equity scam
Spectator: Half a house is hardly worth having
Why is the government trying to buck the housing market at all? Leave it alone and prices will continue their slide. Then, perhaps in a couple of years’ time, first-time buyers will be able to afford to buy themselves entire houses, rather than the half-houses which Gordon is offering them now.
Black swans swim swiftly
FT: Long View: Fall in US house prices heralds problems for all
Falling US house prices may lead to severe and unpredictable market consequences.
Nice Property Porn from Kate Hughes
Independent: Why first-time buyers should head overseas
Having a property abroad strikes many of us as a great lifestyle opportunity, but a growing number of UK first-time buyers looking overseas are more interested in sidestepping Britain's challenging property market than the lure sun, sea and sand.
It might be worth while doing a credit check on your landlord.
The Scotsman: Tenants suffer eviction fallout as number of repossessions rises in buy-to-let sector
WHEN tenants of rented homes are evicted it is usually for arrears, or excessive noise or damage (and in some extreme cases, all three). But there is now a new and growing phenomenon: perfectly respectable and law- abiding tenants being forced to quit because the landlord has defaulted on his mortgage and the lender has taken possession.
Poole builder goes into administration
Bournemouth Echo: Building Firm in Trouble
Poole builder goes into administration leaving dozens of flats and houses unfinished.
A blow for the media VIs
Times: IMF says there is no scope for rate cuts
A good sober article from Gary Duncan, which implicitly states the need for rates to rise again. The IMF has got it dead right, which leaves no scope for Darling to be packed off begging for a loan to prop up the failing economy. “Imbalances emerged in recent years - inflation, overheating in housing markets, low domestic savings rates, high current account deficits, and sustained drops in the international investment position” . Time to encourage saving, reduce borrowing and reduce spending on imported goods.
Simple explanation of rising mortgage costs
BBC News Peston's Picks: The mortgage gap
This should be compulasory reading for FTBs: "The cost of mortgages for many of us is probably still on a rising trend. Here's why. Net lending for mortgages - that's mortgage lending over and above the refinancing of existing mortgages - was £110bn last year (it was a similar amount in 2006 and a touch less in 2005). According to a leading bank, net lending this year will be £60bn."
Only the cream of Cornwall's homes are holding their price
The Times: The Cornish property boom is over - except for the rich
Good news for children going on a Cornish holiday this summer: there will be no trips to the estate agents, no traipsing around houses for sale. The credit crunch and falling prices have scared off all but the most serious buyer.
Friday, May 23, 2008
Ever wonder whether HPC will become just a molehill next to a giant mountain?
BBC News: Vast cracks appear in Arctic ice
It's off-topic (ish). But then posts often get sidetracked by climate-change discussion, so why not start a post with climate change? Worth stopping to think that if the scientists are actually onto something, then HPC could become a small detail in the history of what happens in our world over the next few years. Maybe it's just a flavour-of-the-month theme, but it is worth watching the i-player...
UK Housing and Labour Voter Meltdown
The Market Oracle: UK House Values Have Fallen by 25%, Contributing to Labour Vote Meltdown
Whilst the mandarins of the Labour government scratch their collective heads as to why the voters have lost total confidence in Gordon Browns government, one of the key reasons for the meltdown in the Labour vote in the Crewe and Nantwich by-election is the housing bear market.
Relentless Pressure
Bloomberg: U.S. Home Resales Decline, Inventories Jump
Sales of previously owned homes in the U.S. fell in April and the supply of unsold properties reached a record, signaling no let-up in the 27-month housing slump.
VI Opinion
Firstrung.co.uk: Industry Opinion
Gross mortgage lending reached an estimated £25.3 billion in April, a 5% increase from March and an 8% decline from April 2007, according to the Council of Mortgage Lenders... A fall is typically expected from March to April. However, the fact that Easter was in March is likely to have affected the monthly profile this year. For March and April combined, lending was down 16% from 2007 levels.
Why derivatives are getting much more dangerous
MoneyWeek: Why derivatives are getting much more dangerous
The total ‘value' of global derivatives - financial instruments which are priced on the back of the underlying assets that they track - has now reached a breathtaking $596 trillion. And there are some very good reasons to be worried by this figure.
Feel the fear (2)
Redrow: The help you need, when you need it
Same goes for this lot.
Feel the fear (1)
Persimmon: Now's the time to move with Persimmon
They could try, er, dropping their prices?
Lord Oakeshott talking about how to solve the housing crisis
Property Week: The sooner we get the fall in house prices over with, the better
After a house party as wild as Britain’s over the past few years, the hangover will really hurt. At the end of any speculative boom, turnover slows right down as buyers run out of cash and confidence. The bigger the boom, the more reluctant people are to believe it’s over and bite the bullet when they need to sell. A home is a place to live, not a way to bet. That’s a lesson we must never again forget.
The screw tightens
FT: Banks get jitters on property lending
Bank lending to the property sector raced to record levels last year, before the market tightened as the credit crisis ended years of easy finance, according to the survey. Debt rose to a record £247bn in 2007, from £215bn in 2006, with some £200bn standing on the balance sheets of the lending banks.
Obscure corner of England - but still another crack in the facade
Spalding Today: Spalding developer set to close
A SPALDING developer looks set to shut because of bleak conditions in the housing market. Allison Homes' office in Spalding is intended to be closed under measures by Kier Group, which Allison is part of, to cope with current difficulties in the private housebuilding sector.
Sharks, Spivs, or both?
Wired Gov: FSA fines three mortgage brokers for poor mortgage sales procedures
The Financial Services Authority (FSA) has fined three mortgage brokers for inadequate sales procedures which meant they could not demonstrate that they had recommended affordable mortgage contracts that met their clients’ needs. The FSA has fined Mohammad Rana, registered as Countrywide Management Consultancy and trading as Property Compass (Countrywide) £14,700, Peter Scott trading as the Mortgage House (Peter Scott) £11,900, and Chariot Mortgage Services Limited (Chariot) £10,500.
Adam Champion, from charity New Homes Mortgage Helpline, says: “The message to those on the edge of the market is why rent when you can buy?
mortgagestrategy: Galliford Try Homes tries to lure house buyers
Galliford Try Homes is launching a range of initiatives to encourage hesitant buyers to purchase a new home. The home builder is linking up with New Homes Mortgage Helpline. The joint venture is designed to raise awareness of mortgage deals and developer incentives still available to prospective home buyers. Among the incentives is The Easy Start programme, which allows first-time buyers to purchase homes for 75% LTV, with Galliford deferring the remaining 25% to a maximum value of £75,000 for up to 10 years interest free.
Is hpwatcher's 'Brown to go' clock still ticking?
BBC News: Cameron hails 'end of New Labour'
I'm sure the press and media is full of this - but just wanted to post first..... Big protest vote - will Brown listen? End of New Labour? Start of Old Tory?
Bill Mott (Ex Credit Suisse)
Investment Week: Mortgage data will force BoE to cut rates, says Mott
Data emerging in the coming months showing that the UK is on the verge of a recession will force the Bank of England to cut interest rates, according to PSigma’s Bill Mott. He is extremely critical of the MPC’s policy to hold interest rate cuts in a bid to stem what he believes are non-existent inflationary pressures. “We remain of the view that the Bank of England are following an inappropriate interest rate policy and that domestic inflationary pressures are almost non-existent.” He anticipates figures regarding mortgage approvals due to be printed on 27 May will be ‘truly horrendous’ and could trigger a change in policy either by the government or the Bank of England.
Credit calamity
Scotsman.com: Credit crunch 'to get worse before upturn'
THE economic squeeze will "get worse before it gets better", experts warned yesterday, as the UK's biggest building society admitted its new mortgage lending dropped by more than half last year. And a housing charity warned Scotland is no longer "insulated" against a market fallout.
Followup to "When Mortgages Buy The Farm"
One Magazine: When The Bubble Bursts
I was asked to post an update to the earlier article, which apparently proves popular in the US. This time I'm looking at who's to blame for the bubble, and who they're blaming instead. The original article is at: http://www.iamone.co.uk/2007/12/01/when-mortgages-buy-the-farm/
Property porn is now a minority sport
The Times: Property porn is now a minority sport
Traditional bank holiday pastimes include gardening, shopping and what teenagers call “chillax” and parents call “putting your feet up”. That other popular pursuit - drooling over property gems in the windows of estate agents in country or seaside locations - could be on fewer schedules this weekend. It's becoming a bit of a minority sport, rather like polo, say.
The New Paradigm For Financial Markets
PBS: Interview with George Soros
As the U.S. grapples with an economic slowdown and a housing slump, financial leaders are rethinking their strategies. Financier and author George Soros reflects on the changing business trends and details his new book, which examines the 'credit crash' of 2008. GEORGE SOROS: "I think this is the most serious crisis of our lifetime. It's not just a housing crisis, but a crisis of the financial system. There's been a super-bubble growing over the last 25 years at least, which basically consisted of an extension in credit, increasing use of leverage. ... You have to regulate not only the money supply, but you also have to regulate credit conditions. ... It is the Federal Reserve's job to prevent bubbles from happening. ... Also I think oil is in a bubble."
Dumb and dumber??
market oracle: Immoral hazard - Incompetence at the Fed
Excellent summary of the crisis. Are Greenspan and Bernanke are just incompetent or is it that "Greenspan was a tool of the moneyed interests who gave him his job. He knew who 'buttered his bread' and returned their favors manyfold. He engineered many crises and used them all to 'advance and consolidate the influence of US-centered finance over the global economy, almost always to the severe detriment of the economy and broad general welfare of the population'". Compare that with President Garfield's 1881 quote, "Whosoever controls the volume of money in any country is absolute master of all industry and commerce...And when you realise that the entire system is very easily controlled...by a few powerful men at the top, you will (know) how periods of inflation and depression originate".
A Municipality Funding Story Gone Bad - Quite A Sad Read Actually
Bloomberg News: JPMorgan Swap Deals Spur Probe as Default Stalks Alabama County
May 22 (Bloomberg) -- As nighttime temperatures plunged in Birmingham, Alabama, last October, Dora Bonner had a choice: either pay the gas bill so she could heat the home she shares with four grandchildren, or send the Birmingham Water Works a $250 check for her water and sewer bill. Bonner, who is 73 and lives on Social Security, decided to keep the house from freezing. ``I couldn't afford the water, so they shut it off,'' she says.
Oh no! US interest rates might rise
FT: Short View: Markets and the Fed
John Authers on video about possible rise in US rates and bad prospects for the US economy. Parallels for us of course. There is a text version of this (http://www.ft.com/cms/s/0/c14f3434-282f-11dd-8f1e-000077b07658.html), but the video has graphs and more detail.
Look at oil exports not just production levels
Safe Haven: What the Export Land Model Means for Energy Prices
"To understand the importance of exports when discussing peak oil, ask yourself the question, "What's more important: the fact that global oil production is falling ... or that the oil-exporting nations are cutting off their exports?""
Mega bearish article. A must read.
Market Oracle: Failure of US Brand of Capitalism
The four insolvent pillars to the USEconomy: federal budget, current account (trade) deficit, bank capital, and homeowner equity point to imminent desperation in policy, all directed toward mammoth unprecedented monetary inflation. THE GLOBAL ENERGY WAR THAT STARTED IN 2003 IN IRAQ HAS NOW EXPANDED INTO A GLOBAL WAR OF CAPITAL
The DOW priced in oil, gold and copper
Market Oracle: The Stocks Stealth Bear Market
Since 2000 the Dow has risen 10.2% to almost 13,000. But even at that level, it would only purchase: 105 barrels of oil — 77% less than it did in the year 2000 ... 14.38 ounces of gold — 65% less than it did in 2000 ... 74% less copper than it did in 2000 ...
The solution - join the EU and the euro - NOT
Market Oracle: Iceland Facing Meltdown as the Credit Crunch Sinks its Currency
This tiny country - home to a mere 300,000 people - has somehow created a financial system nine times the size of its gross domestic product (GDP). The Icelandic krona has fallen 26% against the euro this year. Over the past three months, consumer prices are up 6.4%. That's equivalent to an annual inflation rate of 28%. The economy will contract by 2.5% next year and 1.5% in 2010.
LSL takes £3m hit as estate agency stalls
Yahoo: LSL takes £3m hit as estate agency stalls
LSL Property Services (LSE: LSL.L - news) is to take a £3m hit this year as part of a retrenchment plan following a slump in business at its estate agency arm.
big corporates win again
The Telegraph: British Airways warns oil surge will put a rash of airlines out of business
British Airways believes it can ride out the storm caused by the rocketing oil price by making capacity cuts of only around 2pc this winter.
Newspapers and Vested Interests - The Property Section
Guardian: Regional newspapers suffer from slump in advertising
Daily Mail and General Trust warned yesterday that its regional papers were suffering, partly as a result of a lack of property advertising. The news sent shares in the group, owner of the Daily Mail and Mail on Sunday, to their lowest for more than 10 years. This explains why the 'Express' are still banging on about house price increases.
The Destruction continues
The Telegraph: Defaults on commercial property loans surge 400pc
The study of bank lending to the commercial property industry shows that while the amount lent continued to rise in 2007, nearly 400 loans slipped into default, up from fewer than 80 in 2006.
The end of Brown & New Labour...
Times Online: Disaster for Gordon Brown after Tory landslide
''...A resurgent Conservative party stormed to a crushing victory over Labour in the Crewe & Nantwich by-election early today, placing Gordon Brown’s leadership under even greater strain. In a massive boost for David Cameron, the Tories overturned a 7,000 Labour majority to make their first gain from Labour in a by-election for 30 years — with their own 7,860 majority on a massive swing of 17.6 per cent....''
Pile in, boys
Telegraph: Buy to Let bandwagon has not yet hit the buffers
Bearish commentators love to raise the spectre of Middle England landlords being forced to dump their investment properties on an already fragile property market. A "buy-to-let" crash would appease the green-eyed monster that exists inside all of us. But however much we may wish for it, the reality is somewhat different. Many of those who have invested in property have done so to provide for their retirement - they will ride out these difficult times even if it means re-mortgaging their own home. The demise of the buy-to-let landlord is overdone.
It's not different here
Scotsman: Housing slump may hit less hard in Scotland but it will still be a blow to buyers
Stories reporting how the credit crunch is likely to affect the Scottish housing market currently all tend to say the same thing. The headline on one such story in The Scotsman yesterday was typical: Scots to escape worst as UK house prices set to fall 7 per cent. In other words, while there may be house price woe south of the Border, we will be all right up here. I'd like to think that will be true, but I fear it won't.
Thursday, May 22, 2008
Speculation/manipulation/capitulation
forex factory: Ready for the Oil Bubble?
"There’s a few hedge fund managers out there who are masters at knowing how to exploit the peak [oil] theories and hot buttons of supply and demand and by making bold predictions of shocking price advancements to come, they only add more fuel to the bullish fire in a sort of self fulfilling prophecy." — National Gas Week, Sept. 5, 2005 as reprinted in the US Senate Permanent Subcommittee on Investigations’ report, "The Role of Market Speculation in Rising Oil and Gas Prices," June 27, 2006
'Scandalous' OPEC to blame for slump, by-election results, weather etc...
The Register: The economy: A big Arab did it and ran away, claims PM
It's all OPEC's fault, according to Gordon Brown. He told an audience that the world's current economic woes can largely be blamed on the scandalous behaviour of the oil producer's cartel. They're just not pumping enough oil, he claims. Brown's pitch can't exactly be categorised as a major contribution to economic rationality. [Warning: no relevance to HPC. It's just shocking to see how out of touch "Prudence" Brown really is on economic matters.]
Look out - cliff!
Independent: Sharp fall in new home sales puts thousands of jobs at risk
"The slowdown last autumn was minuscule compared to what we are seeing now – since the start of April the market has fallen off a cliff and trade has almost stopped,"
Egypt - the most populous Arab country - has just raised petrol prices by 40pc. Rumours swept China yesterday that Beijing was preparing to lift fuel prices. While the Chinese government is unlikely to risk protests in the lead up to the Olympics, the jit
TELEGRAPH UK: Oil's perfect storm may blow over
Almost all emerging nations have to slam on the brakes in coming months to curb inflation before it starts spiralling out of control. Inflation has hit 30pc in Ukraine, 22pc in Vietnam, 8.5pc in China, and double digits across most of the Gulf. The countries that account for the most of the growth in oil demand over the last two years are almost all nearing the limits of easy economic growth. Read
Just why are high house prices a good thing?
Press TV: People sleep in cars in rich US city
How did we all get so programmed into this? That it is better to borrow than to work? It seems a good many of us just wanted to be able to say "I'm the Lord of this Manor. You are my serfs" and brag about our "investments" at dinner parties. Serves us all right. High house prices in one of the wealthiest US cities have forced increasing numbers of women and elderly people to sleep in their cars. According to organizers of a program that makes it possible for the homeless to sleep safely in their cars at night, more people are living in their cars in the city of Santa Barbara, while many of them even hold part time jobs.
BOE special liquidity scheme - take up could exceed £50bn initially allocated
mortgagestrategy: New Star claims BoE has swapped £16bn in securities
Banks may have swapped about £16bn of securities under the Bank of England’s Special Liquidity Scheme within the first 10 days of its launch, analysis from New Star suggests. The figure is based New Star's broad money supply release for April, published today, which shows that banks removed a record £16.4bn worth of loans from their balance sheets last month.The number represents a sharp upward turn from an average of just £500m in the first three months of 2008.
Oil's not the only thing that's rising!
Money Supermarket: 1 year fixed rate account 7.10 %
OK it's Firstsave from Nigeria. But they have a bigger oil reserve than us and they are pushing real interest rates further and further away from the base rate. This must surely result in our banks competing for new deposit's and lending will have to be squeezed further and become more expensive!
Hubble bubble - oil and trouble....
Guardian online: Why the oil price means bubble trouble
All of these factors may have contributed to the upward trend in the oil price over the past six years, which has seen the cost of a barrel of crude rise from around $20 a barrel to $135 a barrel today. None of them really explain, however, why the price should have gone up by more than $5 in the past 24 hours and by a third in little more than a month. That sort of price action is the result of a speculative frenzy of the sort that was witnessed in the dotcom mania of the late 1990s. The oil market, to put it simply, is a massive bubble waiting to be popped.
U.S. Sees Largest Decline on Record
The Wall Street Journal: Home Prices Continue to Decline
For home-owners and financial market observers, these declines spell further erosion in home equity levels and potentially more trouble for mortgage markets
Economist "probably" "maybe" suggests a crash
economist: Trouble ahead for global house prices
OUR round-up of house-price indicators (see table) suggests that any crash is far from universal. Only five countries have suffered annual house-price falls in the latest data and two of those—Japan and Germany—have been in the doldrums for a decade. It is a fairly safe bet that the data will look less reassuring in six months’ time.
Efin typical!
Daily Mail: Nationwide accused of cashing in on credit crunch as profits soar by £112million
BRITAIN'S biggest building society has cashed in on the credit crunch by pushing up profit margins on some mortgages and savings to make an extra £112.1million. Nationwide said yesterday that profits surged by 17per cent last year to £781.1 million.
Estate agent shocker
BBC Peston's Picks: Estate agent shocker
I'm presuming Robert is a "doom-sayer" bear ... "Britain's largest estate agent, Countrywide, has toggled. ... If it weren't for the way that Apollo screwed this mind-boggling deal out of the lenders - if Countrywide hadn't been able to suspend cash-interest payments and borrow to pay interest - the prospects for this business and their jobs would be a good deal worse (though in view of the mess in their market, that's probably not a reason to be too cheerful)."
Why there's a 95% chance of a recession
MoneyWeek: Why there's a 95% chance of a recession
New research reckons there is a 95% chance that Britain will go in to recession. It'll be long, bleak and hard, and the government won't be able to do a thing about it.
More job cuts will be the result
BBC News: Air France warns on fuel prices
It's not mentioned in the article but how long before the big airlines lay off staff as the lack of people willing to fly to their holiday destination increases. That's a lot of Pilots, Stewards, Baggage Handlers, Aircraft Engineers, etc world wide. Anyone truly believe now that house prices and rents can remain high, or have the last of the housing Bulls truly left the building.
Good to see they haven't forgotten why they exist
Telegraph: MPC minutes hint at splits as BoE steps up inflation crusade
(the MPC) regards a housing market slump and a possible recession as prices worth paying to keep inflation under control in the long term.
Record oil prices could give Brown a popularity boost
BBC: Oil soars to new record over $135
It's probably too late for the Crewe & Nantwich but Gordon Brown could boost his rapidly fading popularity but capping the tax take on fuel. Whilst derv and petrol soars to £1.30+ per litre the government tax take increases in line. A simple and potentially cynical decision could be made to cap the tax take at for example £1.00 a litre. Increases in the cost of oil over and above the £1.00 would incur no additional tax on the punter at the pumps. The above comments are not based directly on the BBC linked article but are based around a potential approach to address several factors, which include the distress and the impact of inflation on the motorist and an attempt to portray Brown as helping the people who he serves.
Please Sign E-Petition! Downing St Fuel Duty
Downing St: Downing St E-Petition
We the undersigned petition the government to lower the current levels of taxation on fuels within all UK territories. Petrol, Diesel, Heating Oil and Gas by at least 30% The current cost is unsustainable to the average family. I myself drive 60 miles per day to work and home again and can not maintain this level of spending (even in our current diesel car) The fuel prices in the UK are simply ridiculous the fault in this case does not lay with the fuel companies it is completely the governments over taxing the hard working people in the United Kingdom.
What is this nonsense?
bbc: The nasty decades of the past
There are some who see a cycle of boom and bust as inevitable. But as Britain and much of the Western world faces up to a downturn, it's easy to look back into the past and find nasty decades, writes Finlo Rohrer.
toilet paper futures?
321 gold: Another Shaft in the Mining Business
For those aware of the impending collapse of debt-based paper money assets, the fact that the majority still have no idea about the magnitude of the approaching danger is unbelievable. What is also unbelievable are the positions some of those people hold. The 2007 annual report confirmed that SSRI (Silver Standard Resources) is well positioned to take advantage of the coming collapse of paper assets. The 2007 report revealed that Silver Standard Resources had invested $57,102,000 in asset-backed commercial paper otherwise known as ass-paper or ABCP for short, paper assets (IOUs) backed by commercial debt that is now illiquid and cannot be sold.
Dodgy economics dressed up as accurate models
FT: House prices: a bumpier ride lies ahead
This looks like a case of two economists being wise after the event - suddenly switching their forecast to price falls, though not by very much. These two produced a model which was suspiciously close to the actual growth in house prices. But they talk as much waffle as the VIs: eg "Systematic and comprehensive models are needed to distinguish fact from fiction in claims such as those made at the time by the OECD and IMF"; "pent-up demand...";"fundamentals of strong growth in real income". Even academics resort to bullsh1t.
Nationwide sees 40% drop in residential lending and now predicts house prices will fall
Citywire: Nationwide predicts single-digit drop in house prices
The percentage fall in house prices will be limited to single digits this year, says the Nationwide Building Society in stating a 5.2% rise in full-year pre-tax profits. The building society was more optimistic than some doom-sayers in the property market who have said house prices could fall by more than 10% while Halifax, the UK's largest lender, has forecast mid-single-digit falls.
Sales vs. inflation
Bloomberg: U.K. Retail Sales Fell for a Second Month in April
Sales declined 0.2 percent from March but are up 4.2 percent from a year earlier.Sales of food fell 1 percent last month, leading the overall decline. Household goods stores sold 1.4 percent less than the previous month and clothing sales were flat, the statistics office said. Retailers cut prices by 0.9 percent from a year earlier to attract shoppers, the report showed.
The lagging indicator of the economic health rears its ugly head... Unemployment
Telegraph Online: Unemployment to rise sharply this year, warns Bank of England
Unemployment could increase sharply this year, economists have warned, after an influential report showed more firms were looking to fire staff than at any point for last 11 years.
Increasing yields but also increasing supply...
Sales slowdown lifts buy-to-let: BBC News
RICS survey indicates more properties are being let, because their owners can't sell them. Gross yields are also up apparently, but with the increase in supply of properties to let I wonder whether this increase will soon reverse.
Oil buying leveraged at 16:1
Market Oracle: The Real Reason Behind Record High Oil Prices- Part 2
US margin rules of the government's Commodity Futures Trading Commission allow speculators to buy a crude oil futures contract on the Nymex, by having to pay only 6% of the value of the contract. At today's price of $128 per barrel, that means a futures trader only has to put up about $8 for every barrel. He borrows the other $120. This extreme “leverage” of 16 to 1 helps drive prices to wildly unrealistic levels and offset bank losses in sub-prime and other disasters at the expense of the overall population.
Credit agency in denial about crisis facing UK...
Telegraph: 'UK feels more stable' than US, says Experian
''...Britain is better placed to weather the brewing economic storm than the US because UK banks tightened up their lending criteria for consumers two years ago, the world's largest credit information agency, Experian, claimed yesterday. 'UK lenders started getting tougher about lending standards a couple of years ago' Don Robert, chief executive, said the group has seen "real evidence of the weakening consumer in the US" as problems in the mortgage market spread to "credit cards and auto finance". By comparison, in the UK "the quality of credit portfolios is holding up well". ...''
Council of Mortgage Lenders 2008 House Price Forecast Busted
The Market Oracle: Council of Mortgage Lenders 2008 Housing Market Forecast Demolished
The Council of Mortgage Lender (CML), revised their forecast for UK House prices for 2008 from an anticipated rise of 1% as of Oct 07 to now project a fall in prices of 7%. The CML, inline with its member institutions has a vested interest in talking up the housing market as evidenced by the inaccuracy of their housing market forecasts during periods of falling house prices. As a reminder to readers, the Market Oracle forecast for UK house prices made ahead of the actual peak in the housing market in August 2007 is for a 15% drop over 2 years from August 2007 to August 2009, therefore forecasting a 7% to 7.5% drop for the year 2008.
The credit crunch triggered by the U.S. subprime mortgage meltdown seems to be the worst crisis of its kind since the end of World War II," he added.
nikkeinews: Stagflation has become a global concern on the back of rising oil prices, Eisuke Sakakibara, former vice finance minister for international affairs, the Nikkei reported in its Thursday evening edition.
Large amounts of speculative funds are flowing into the commodities markets as the U.S. housing market plummets and the U.S. economy slips into a recession, sending crude oil prices to record highs and raising concern over the possibility of global stagflation," he said at The Future of Asia forum organized by Nikkei Inc.
We need this sort of treatment for our bankers here in the UK
CNN: Boy-band mogul can buy time off sentence
Lou Pearlman founded boy bands Backstreet Boys, 'N Sync Scam bilked thousands of investors; some lost life savings Judge says he'll shave off one month for every $1 million paid back ORLANDO, Florida (AP) -- Lou Pearlman, the man who created the Backstreet Boys and 'N Sync, was sentenced Wednesday to 25 years in federal prison for engineering a decades-long scam that bilked thousands of investors out of their life savings. Lou Pealman was the boy band king, then fleeced investors of some $300 million. It was the maximum sentence the boy band mogul could receive for allegedly swindling some $300 million from investors and banks since the early 1980s.
Update: Congresswoman denies foreclosure report
L.A. Times: California Congresswoman walked away from $578K mortgage
Update: California Congresswoman Laura Richardson today denied a published report that her $535,000 Sacramento home had slipped into foreclosure, saying she has renegotiated her loan to keep the home. The house "... is not in foreclosure and has NOT been seized by the bank," Richardson, a Democrat from Long Beach, said in a statement. "I have worked with my lender to complete a loan modification and have renegotiated the terms of the agreement -- with no special provisions." (Rep. Richardson's entire statement is at the bottom of this article). Earlier, Capitol Weekly reported that Richardson walked away from the mortgage on her $535,000 Sacramento home, letting the house slip into foreclosure and disrepair less than two years after she bought it with no money down.
VIs facing the truth
Telegraph: Housing slump could be worst since 1970s
House sales could fall to their lowest level since the mid-1970s the Council of Mortgage Lenders warned yesterday. In a sharp revision to its previous forecasts, the CML said it is expecting house price falls of 7% by the end of this year. In its last forecast, it had predicted a rise of 1% for 2008. The CML is also predicting a 35% fall in transactions to 770,000, which would be lowest level of activity in the housing market for 30 years. Meanwhile, RICS has warned that housing transactions could fall 40% if the lending squeeze continues, although its forecast for house price falls is 5%.
Shameless
BBC 'News': Sales slowdown lifts buy-to-let
The downturn in property sales is having a positive affect [sic] on buy-to-let, a survey from the Royal Institution of Chartered Surveyors (Rics) suggests. Its survey of residential lettings says the number of new instructions to let property rose by 29% in the first three months of 2008. Weaker demand to buy houses has forced sellers back into the rental market, where yields are rising, Rics says.
I have some Tulip bulbs from the 18th century, let's mark those at £1m each
FT.com: Top banks call for relaxed writedown rules
The world’s leading banks have stepped up pressure to relax controversial accounting rules with a new plan aimed at breaking the “downward spiral” of huge writedowns, emergency fundraisings and fire-sales of assets. The proposals on “fair value” accounting by the Institute of International Finance, an alliance of 300-plus companies chaired by Josef Ackermann, Deutsche Bank’s chairman, would enable financial companies to cushion the blow of financial crises by valuing illiquid assets using historical, rather than market, prices.
Wednesday, May 21, 2008
james was right to be concerned
times: Women win right to children without fathers
Single women and lesbian couples won landmark parental rights last night as MPs voted to remove the requirement that fertility clinics consider a child’s need for a father. As James pointed out a few days ago most posters here are men. However it now seems our bleetings are just that - bleetings - the future doesn't need men
It doesn't work like that!
Motley Fool: Mortgage Lenders Are Still Ripping You Off
Getting on the property ladder seems harder than ever for first-time buyers. Not only are mortgage rates rising, but lenders are demanding even higher deposits. And -- as if that wasn't bad enough -- rip-off mortgage fees are really rubbing salt in the wounds.
T. Boone Pickens helped lift oil prices once again yesterday with his "$150 in '08" call on CNBC.
seekingalpha.: .For those interested, below we provide the holdings of Mr. Pickens' hedge fund at the end of the first quarter. Boone Pickens Hedge Fund Holdings
This Should Be Stopped These Funds Talking Their Books And Causing Worldwide Problems
Can't sell - won't sell.......game over!
Kent Online: Grim warning as house prices are set to plummet
Trevor Hines, head of public policy and communications for RICS South, said: “Kent is going to suffer and will have to weather the storm like everybody else in the south east. “No one can predict how long it will go on for and how serious it will be but people will have to tighten their belts. “The second half of 2008 will prove a difficult period for the housing market.” Mr Hines said it would be particularly difficult for those trying to sell their properties and already house owners in Tunbridge were deciding not to sell up because they would not get value for money for their homes.
source suggesting that speculators account for 60% of oil trading volume. The Index speculators about which Masters testified include institutional investors like corporate and government pension funds, university endowments, and sovereign wealth funds.
bloggingstocks.: Oil at $130 -- partly due to Goldman Sachs betting on $200 oil?
In this post, I suggested that supply and demand figures would mean a drop in price. But I found a source suggesting that speculators account for 60% of oil trading volume. The Index speculators about which Masters testified include institutional investors like corporate and government pension funds, university endowments, and sovereign wealth funds. And he suggests that they're betting on a drop in the dollar and a rise in the price of oil as an inflation hedge.
Taylor Wimpey - cut head count by 10%
Express and Star: Homebuilder axes 600 jobs
Around 600 jobs, including dozens in Wolverhampton, are being shed by a major homebuilder due to the slump in the housing market. Bryant North Midlands is part of the country’s second-biggest builder Taylor Wimpey, which is closing 13 of its 39 offices across the country.
I'm even feeling sorry for the estate agents - but they are reaping a bitter harvest partly of their own making.
Estate Agency News: MARKET 'IN SHREDS'
Rates of sales halved in a year, say NAEA, while Hill predicts that if current trend continues, a third of offices could close THE slump in transactions has plunged most estate agencies into losses this Spring — and if the current trend continues, as many as a third of offices could close, Countrywide chairman Harry Hill has forecast.
"The early signs are that some agents have been walking away from the industry, others have been told to hang up their car keys and go"
Citywire: Estate agents must adapt or die
Inevitably, tempers are frayed and nerves raw in the world of estate agency. The high street’s volume of business is being hit by a sudden and catastrophic volume drop-off, with the average agent shifting just 22 properties in the first quarter of the year. That’s close to the all-time low of 1992, when the market effectively shut itself down to all action apart from repossession.
Now would you credit it -- British houses priced in Euros?
Bloomberg: Housing Bust Shakes Migration, Sparks Euro Talk: Matthew Lynn
So the economy is going down the pan, and all those nasty foreigners are going back home leaving no one to do the dirty work. But out of the doom and gloom comes the mighty Euro! Fancify? Perhaps. Or perhaps not...
$132: How high will it go?
Bloomberg: Oil Rises Above $132 on U.S. Supply Drop, Bank Price Forecasts
Crude oil rose to a record above $132 a barrel as U.S. stockpiles unexpectedly dropped and banks raised price forecasts because of supply constraints and demand growth. Supplies fell 5.32 million barrels to 320.4 million last week, the biggest drop in four months.
Paying the price of replacing cheap money
BBC News: US is told to revamp dollar notes
The US government has lost a court case to replace the identically sized bills with different notes catering for partially sighted etc. As the dollar is currently worth about 50p as a piece of single ink paper, and the replacement proposal is for different inked different size notes, the costs will be truly enormous. How much longer does the single dollar bill have?
Outcry Over Oil Prices
CNNMoney.com: Oil exec: Prices driven by 'fundamentals'
NEW YORK (CNNMoney.com) -- Amid increasing public outcry over record-shattering oil and gas prices, senators on Wednesday hauled industry executives in to testify about the recent runup. NEW YORK (CNNMoney.com) -- Amid increasing public outcry over record-shattering oil and gas prices, senators on Wednesday hauled industry executives in to testify about the recent runup. Let us not forget over 2/3rds of the pump price is tax.
Oh pwned
Bloomberg: UK Homebuilders to Cut Tens of Thousands of Jobs
UK homebuilders will cut tens of thousands of jobs as the £19 billion-pound industry grapples with the worst housing slump in more than a decade, according to the chairman of the Home Builders Federation. "There isn't a builder in the land who isn't considering overheads and job losses,'' Stewart Baseley said in an interview yesterday. Job losses "will be in the tens of thousands,'' he said. "I've never seen a downturn escalate as quickly as this.''
Time to re-write the economic cycle and move the goalposts on debt to GDP ratio
BBC: UK debt 'to break' official rule
The decision to nationalise Northern Rock has pushed UK debt levels above the government's official ceiling of 40%, preliminary figures suggest. Bailing out the lender pushed public net debt to 43.1% of gross domestic product (GDP) in March, suggests the Office for National Statistics (ONS).
House prices to fall 7% in 2008
LSE: House prices to fall 7% in 2008
UK house prices will fall by seven per cent this year, according to the latest projections from the Council of Mortgage Lenders (CML).
BOE report - see brief summary
Bank of England: Agents' Summary of Business Conditions for May
See May 2008 PDF download for full report - Brief summary - Estate agencies have reported a further reduction in enquiries into established properties and that sale periods are continuing to lengthen.The report also maintains there has been a rise in the cancellation of sales and attributes the phenomenon to tighter credit conditions. It says vendors were accepting sizable discounts on asking prices in May and that this is reflected in the fall in price inflation for established homes. Estate agencies are reporting a cull of staff to accomodate the reduction in demand for services.The summary also reveals demand for new housing has continued to weaken as a result of tighter credit conditions.
Para? Para? Gone!
Times: Paragon cuts mortgage lending in half
"Paragon had managed down its exposure and reduced lending, particularly in buy-to-let. The reputation of buy-to-let investments has taken a battering in recent months amid worries that some borrowers have overstretched themselves and rental increases have failed to keep pace with increased mortgage costs" But sorry, rents were soaring! maybe not! Look at the Primelocation link
US import price index
Market Oracle: China Now Exporting Inflation Abroad
Most of us have been waiting for higher inflation to erupt on the scene for some time. Government statisticians have been able to avoid the reality of market place. How many million words have been written on these web sites on nonsense of core inflation? Simplistic nature of that measure, which ignores developments in prices for oil and Agri-Food, is about to come back to haunt those policy makers that have hidden behind it.
Report out at long last,. Prices down, stock unsold up
Primelocation: April houseprice report
At long last - a nice read from the highest of the asking price surveys
Crash is good news
Spectator: The truth is that the house price crash is, overall, good news
Rod Liddle says that our pursuit of property as investment has been the most repulsive and soul-destroying aspect of contemporary British culture.
US M3 Money Supply
You Tube: ShadowStats.com founder John Williams
John Williams talks about US M3 growth and predicts a depression
More newspeak
yahoo: Smith gets rough ride
"The need to keep mortgages and the cost of living under control - and that includes your mortgages and your families' cost of living as well. "At a time when families are feeling the pinch, I know how important it is to restore stability and confidence into discussions on your pay." Errrmmm, so high mortgage costs are now an excuse NOT to pay people properly? Nice one NuLabour
Double digit falls predicted for 2008 and 2009
Times Online: House prices will fall 7% in 'uncertain' market
Conditions in the UK housing market will "get worse before they get better", with mortgage lending expected to fall by 21 per cent this year while house prices will decline by 7 per cent. "...it is looking ever more possible that house prices will suffer double-digit falls both this year and in 2009"
Down it goes
Independent: George Soros: Credit crisis is the worst since the Great Depression
Soros' makes a few pertinent comments on UK house prices
Inflation v Deflation???
The Telegraph: Has the Fed really flooded the world with dollars?
So let me throw it open to any readers who have a view: do we really face galloping inflation in the Atlantic and Japanese economies (still almost 60pc of world GDP), or is deflation lying in wait?
Lessons to be leant from the Germans?
BBC World Service: Germany seems to be doing well.
At a time of gloom in many of the major western economies, Germany seems to be doing well. Damien McGuiness asks why the credit crunch hasn't hit Germany as hard as other countries.
Interview with best performing fund manager...
Times: How Invesco Perpetual's top manager keeps ahead of the market - and his rivals
Key quotes:- ''...I am convinced that the UK economy is going into recession ...we have had huge growth in [consumer] consumption, funded by rising levels of debt, but the party is over for this type of debt-fuelled consumption...''
In a language the average BTL/Assetz employee might understand
Childrens BBC Newsround: Are you counting the pennies?
Check out what the little darlings are saying: "I don't get pocket money, as my parents need it for bills and stuff. So, I've got myself a paper round, which pays £10 a week. I only used to get £10 a month in pocket money before!" Heather, 13, Sheffield, England
A conservative estimate, but no-one really knows
BBC News: CML predicts 7% house price fall
''...The Council of Mortgage Lenders (CML) has predicted a 7% drop in UK house prices during 2008. The CML expects there to be 35% fewer property transactions in England and Wales this year than in 2007. ...''
Not a news article - but great fun
Youtube: Rory Bremner 'Who wants to be a millionaire?'
Rory Bremner as Chris Tarrant on "Who wants to be a millionaire?" Place these following banks in ascending order of what they've lost on sub-prime mortgages A: Barclays Capital B: Citigroup C: UBS D: Merrill Lynch
Traders share a laugh in the crude oil options pit of the New York Mercantile Exchange, where the price of oil futures swept toward $130 a barrel. The record-shattering run-up in energy and food prices has prompted Congress to consider taking action again
la times: Are commodity traders bidding up food, fuel prices?
The record-shattering run-up in energy and food prices has put investors who buy and sell such things on the hot seat -- so hot that some in Congress on Tuesday threatened action.
The illusory recovery
MoneyWeek: The illusory recovery
Credit markets may have rallied recently, but the worst is yet to come. And that will mean real pain for everyone, not just financiers...
Short article....but highlights much between the lines
Reuters: CML predicts 7 pct drop in 2008 house prices
The Council of Mortgage Lenders (CML) predicted there will be 770,000 property transactions in England and Wales this year, down from 1.18 million in 2007. The CML's last forecast in October had predicted a 1 percent rise in house prices and a 14 percent drop in transactions. So 410,000 less transactions - that's a lot of lost business for EA's and solicitors! Depending on through put 410,000 equates to a lot of EA closures.......no sale no fee - SH@T, that was a crap business model.
House prices: the 10 most recession proof counties
Times Online: Original news blog
The Times says there are still 10 places where the property market is still going from strength to strength...
Now it looks like we'll always be bailed out by the Central Banks, let's try this trick again!
FT: HBOS returns to mortgage-backed bond market
HBOS, the UK’s largest mortgage lender, has sold £500m of mortgage-backed bonds in the first such deal for any mainstream European issuer since the credit crisis struck last summer. The bank’s first deal since July 2007 will lift hopes that mortgage securitisation markets, which have been in effect shut for months, could begin to re-open and that other lenders may now be encouraged to test the waters.
In - out - in - out - shake it all about - you do the hokey cokey and you turn around....that's what it's all about!
The Times: First Direct resumes mortgage lending
When they pulled out 7 weeks ago their two year fixed rate was 4.75%, now their new rates are 5.76%. If the BoE raised interest rates by 1% there would be a riot!
Long article - but worth the read
The Times: Gordon Brown - is that all there is?
Here is a man who had his lifetime ambition snatched from under his nose by his best buddy and who spent the better part of the next 13 years plotting, scheming, agitating, conspiring, hustling and conniving to snatch it back. And when he finally gets his hands on the shiny keys of No 10, what does he find? That the job was not everything he had so fondly imagined. His current difficulties, I would suggest, are not so much a function of ineptitude as of existential confusion.
Holiday Home USA
BullionVault: Holiday Home USA
Fanny Mae, the US-government backed mortgage lender, is urging British holiday-makers to take unsold stock of its hands. "Affordable housing opportunities," says the ad. "Find a holiday home in America..."
Beyond farce
BBC: UBS's real loss
Swiss bank UBS is selling $22billion of its sub-prime mortgage assets to the private group Black Rock for a knockdown price of $15billion - a 32% loss. Not only that, but UBS is actually financing the deal themselves, lending Black Rock the money to buy the assets from itself. Huh?
Still ramping? How quaint
Independent: Escape the rental trap
Haven't seen one of these articles for a few months. The Independent tells you how to "escape the rental trap" by putting forward such splendid options as shared ownership, buying a new-build, adding your parents to your mortgage, and clubbing together with friends to buy a property. I thought the writers of these kind of articles had given up the fight long ago. Strange to see one still battling on, like the Japanese soldiers after the end of WWII. 'Kato Harris, 28, a teacher, bought a one-bed flat in Lee, London. "I had a 103 per cent mortgage because everyone told me that if I didn't buy now, I would never get on the property ladder. But because Lee is cheap, I feel it'll be one of the last places to be hit by the slump." '
Mass redundancies loom for housebuilders
Bloomberg.com: U.K. Homebuilding Industry to Cut Tens of Thousands of Jobs
``I've never seen a downturn escalate as quickly as this,'' the chairman said. Trying to compare it with previous downturns ``is like comparing apples and oranges.''
Four notches lower
FT: Moody’s error gave top ratings to debt products
Moody’s awarded incorrect triple-A ratings to billions of dollars worth of a type of complex debt product due to a bug in its computer models
The RBA has raised interest rates twice this year to stem inflation. The benchmark overnight cash rate target is at a 12-year high of 7.25%.
the age: The Reserve Bank's strategy of inflation targeting may lead to a "disaster'', a Nobel Prize-winning US economist has warned, adding it was "absurd'' for the RBA to think it could dampen global food and energy prices.
The RBA has raised interest rates twice this year to stem inflation. The benchmark overnight cash rate target is at a 12-year high of 7.25%.
CONSUMER sentiment improved slightly in May thanks to a post-budget bounce, but remains "disturbingly low", a survey says.
AUSTRALIAN: Consumer sentiment 'disturbingly' low
The Westpac-Melbourne Institute index of consumer sentiment, released today, rose by 2.7 per cent in May to 89.8 index points, from 87.4 points the previous month.
Housing affordability at record low
AUSTRALIAN: The Housing Industry Association/Commonwealth Bank first home buyer affordability index slumped by 3.5 per cent in the three months to the end of March. This is the worst result since the series began in 1984.
The latest index also was 10 per cent lower compared with the March quarter of 2007. The March quarter housing affordability index fall was double the December quarter's 1.7 per cent slide.
Taxpayers' money tied up in Northern Rock is more at risk than first thought, the nationalised lender's chairman, Ron Sandler, has conceded, as the credit crisis threatens to undermine its restructuring.
TELEGRAPH UK: Rock billions 'at risk in a downturn'
The key risks are what is happening in the wider economy. If we suffer a downturn and this leads to higher levels of unemployment, then this would place considerable strain on the ability of the company to deliver the plan."
Informal survey of housing costs
MoneySavingExpert: How much of your after-tax income goes on accommodation?
Vaguely interesting stats. Most people pay about the same proportion of their incomes on rent as on mortgages. Only 12% mortgage-free, surprisingly.
She planned it!!
The Press association: Flint taunted over house prices
Housing Minister Caroline Flint faced Liberal Democrat taunts in the Commons after accidentally revealing details of a likely fall in house prices............Doesnt sound like anything staged at all...........not
Two million British citizens have left the UK in a decade, the greatest exodus from this country in almost a century, new figures will show.
TELEGRAPH UK: Two million Britons emigrate in 10 years
The Office for National Statistics (ONS) will release figures showing that more than 200,000 Britons emigrated during 2006. That will take the total number who left the country between 1997 and 2006 to 1.97 million.
Tuesday, May 20, 2008
Hold On For Your Hats The Ride In The Dow Has Just Started So Get Selling And Beat The Crowds
cncb: LOOKING FOR A BIG DROP IN THE Dow Jones Industrial Average
Nicole Elliott from Mizuho Corporate Bank takes a technical look at the Dow Jones Transportation Index, the Dow Jones Utilities Index and Dow Jones Industrial Average.
Oil hit another intra-day high today before settling just under $130 a barrel. Walter Zimmermann, of United Energy and Mark Waggoner, of Excel Futures, share their insight.
CNBC: Crude Speculation
Oil hit another intra-day high today before settling just under $130 a barrel. Walter Zimmermann, of United Energy and Mark Waggoner, of Excel Futures, share their insight.
Covering all bases, is captain darling tipping a nod and a wink to possible higher rates
CNN Money: UK Darling: Inflation Poses 'Threat' To Economic Stability
In a speech to leading business lobby group, the Confederation of British Industry, Darling said "inflation, while at low levels compared to the peaks we have seen in the past, remains a threat to economic stability." "The Government fully supports the Monetary Policy Committee...in the difficult decisions it faces as it balances the upside risk to inflation in the short term from global price shocks, against the longer term downside risk to growth and inflation," he said, according to a text of the speech. Both remarks signal a shift in language from Darling. MWWWHAHAHAHAAAAA and this clown and his mates run the country, as for the housing market, it cant possibly end any other way..they're doomed, doomed I tell ya!!
Is this a thaw ?
Bloomberg: HBOS Sells First U.K. Mortgage-Backed Bonds This Year
"HBOS Plc, Britain's biggest mortgage bank, sold £500 million of bonds secured by U.K. mortgages, the first public sale of the debt since credit markets seized up last year".
They are lining up to get Gordo
SKY: 'UK Economy Is In Serious Trouble'
Speaking on the Jeff Randall Live programme is one of Britain's best-known entrepreneurs Theo Paphitis. He tells Michael Wilson the British economy is in serious trouble - and believes Government intervention is not helping.
Tuesday evening comedy club routine - "top of the bill" - Stuart Law
mortgagestrategy: No sign of housing market crash, says Assetz
Following on from the Express headline today :- There is no evidence of a housing market crash despite average house prices remaining flat, says the May edition of the Assetz House-Price Watch. The firm bases its statement on the five major UK house price indices that reveal an average of 1.7% annualised growth for the 12 months prior to April 2008. This is a 9.7% decrease from the April 2007 annual growth rate of 11.4% ................but in the long term....“The effect of this release of demand back into the purchase sector will probably surprise many, supporting house prices and even causing them to grow again in due course."
Is this because they'll be arrested for fraud if the don't go ?
BBC News website: Top bankers 'leaving US for Asia
Wonder when the UK exodus starts.
Life on the verge of financial disaster
BBC News: Thousands given mortgage warning
Homeowners in Scotland could be living one pay packet away from a housing crisis, Shelter Scotland has warned.
Bye Bye 2nd Property
guardian.co.uk: 60,000 second homes could be sold off in slump
Demand for second homes in Britain will "plummet" over the next two years as up to 25% of those with more than one property sell up in response to falling property prices, according to a report out today. A study by Capital Economics, a forecasting and consultancy group, said almost 60,000 homes could be placed on the market in England alone, adding to the downward pressure on prices. The south west would be hardest hit with the Midlands the least affected part of the country. Now that the housing market correction is underway, expectations of house price growth have deteriorated significantly and the incentives to own a second home will fade.
Well, would you believe it?
The London Paper: Bogus London estate agent jailed for fraud
A bogus estate agent who sweet-talked would-be tenants out of thousands of pounds each was jailed for eight months today.
George said...
Times: George Soros: Crunch will bite deeper in UK
“In the UK we’ve had a housing bubble that in terms of price increases has been greater than in the United States. “That’s also now going to be corrected - it is taking longer than in the States because you haven’t had over-building like in America."
Megabubble Soon To Burst
MarketWatch: Numbers Racket Exposes Potential Disaster For Economy
If Washington's harping on weapons of mass destruction was essential to buoy public support for the invasion of Iraq, the use of deceptive statistics has played its own vital role in convincing many Americans that the U.S. economy is stronger, fairer, more productive, more dominant, and richer with opportunity than it really is. The corruption has tainted the very measures that most shape public perception of the economy, especially three key numbers, CPI, GDP and monthly unemployment statistics
Pant wetting losses
Times: Slump pushes British Land into £1.6bn loss
British Land, Britain's second largest commercial property company, has written down the value of its shops and offices by £1.9 billion as it slumped to a £1.6 billion loss and gave warning of a further decline in property values for the year ahead. The decline in its holdings - £1.59 billion from its directly owned property and a £354 million decline in its share of joint ventures - drove the group into a pre-tax loss of £1.6 billion compared with profits of £1.2 billion a year ago.
how long before it hits the UK consumer
CNN: America's Money: Gas crunch hits home
The record-high price of gasoline is putting a strain on American motorists - and spurring some to shift their habits. Here are their stories. Will British people change habits? or stop going to work because they can no longer afford petorl, sounds like a plan go on the dole because i cannot afford to drive to work anymore, well done Brown...
Governments Pre-planned Disclaimer Comes to Fruition
Bloomberg: Northern Rock Says Housing Decline May Hurt Debt Plan
``If house price were to decline 5, 10 or 15 percent, that would seriously impede fulfilling the plan,'' said Sandler, at a hearing of Parliament's Treasury Committee in London today. ``In the present housing climate, if things remain as they are, the plan can and will be delivered.'' And we all know which of the 2 is most likely dont we, and so does the government!!!
Read between the lines, there is only one possible outcome
Forbes: U.K. Faces Housing Crisis
"While the U.K. economy remains remarkably strong and home-price falls are currently modest, signs are emerging of significant slowdown and pointing to a prolonged period of falling home prices. Moreover, contraction of equity withdrawal, falling new construction and the prospect that rising mortgage defaults could prolong the credit crisis may dampen further GDP growth" Listen, in the absence of a major global upcycle that would benefit the UK disproportionally (is it just me? but I do not see it) how do you keep this inflated prices up? The only other way is to shave an additional 20 to 30% off Pound.
Merryn tells it like it is
Moneyweek: No oil or housing shortage, just a lack of common sense
We have such a vast oversupply of houses in the UK that Gordon Brown is proposing to spend £200m to buy up some of the excess. There is a nice irony in seeing the government, whose tax and easy-money policies drove the buy-to-let bubble, backed into becoming a buy-to-let investor itself just as everyone else rushes for the exit. This seemingly sudden surplus of new houses throws light on the nonsense that has been used to rationalise the housing bubble over the past decade. The thing in short supply was never houses. No, it was common sense.
sky-rocketing oil prices, are merely accelerating a descent into the abyss
Online Journal: There is more than meets the eye about the world food crisis
On 2 April, World Bank President Robert Zoellick told a meeting in Washington that there are 33 countries where price hikes could cause widespread social unrest. The UN World Food Programme called the crisis the silent tsunami, with wheat prices almost doubling in the past year alone, and stocks falling to the lowest level since the perilous post-WWII days. One billion people live on less than $1 a day. Some 850 million are starving. Meanwhile, world food production increased a mere 1 per cent in 2006, and, with increasing amounts of output going to biofuels, per capita consumption is declining.
Iceland's nasty financial hangover
MoneyWeek: Why Iceland is suffering a nasty financial hangover
"Banks all over the world have spent much of the few years bingeing on cheap money, but Iceland's taken the whole thing to quite an extreme." "Joining the Euro would mean offering up a decent chunk of sovereignty at the the EU’s altar. But then, given that interest rates in Iceland are running at 15.5% and that in the Eurozone they remain at 4%, it might also offer the suffering Icelanders the hair of the dog they really need right now."
Inflation 70s style on its way?
FT: Insight: Life won’t be easy in the ‘nasty decade’
From yesterday's FT. Suggests that there is no reason, given very low interest rates, that inflation won't take off as in the 1970s. Also suggests that property is one a the few assets to make real returns under these conditions. Not in the early 70s.
Secondary effects taking hold in middle America
BBC News: Taking the pulse of Culpeper
Very interesting series of films, showing how the secondary effects of the downturn are taking hold. The US is roughly 9 months ahead of us into the downturn - this is UK next winter..
Ambrose Evans-Pritchard - aka Mr Bear
The Telegraph: ECB’s Trichet calls crisis 'very serious'as troubles reach Europe
The European Central Bank has warned that the world economy is still in the grip of a "very serious market correction" and risks repeating the inflation debacle of the early 1970s if global authorities respond by slashing interest rates too soon.
Bit of (West London landlord) anecdotal evidence here + bit of BBC op-ed there = Factual news
BBC "News": 'Rents rise' as house prices fall
With typically lopsided reporting panache, the BBC claims it to be fact that rent prices everywhere are rising. Widespread oversupply of new build flats is given a cursory nod, then dismissed as "niche market". This is breathtakingly biased reporting. Why have the BBC chosen to only interview West London landlords only? Why have they chosen to dismiss the rest of the country? All questions that should be answered by any credible state media - if only we had one. There is no comments section in the BBC media, and Have Your Say is heavily censored.
Credit Crunch meteor causes mass extinction....
The Scotsman: Estate agents facing the future as an endangered species
But Matthew Gray, property services director at Pagan Osborne in Edinburgh, said the better agents would survive. “Estate agents with genuine expertise and experience will continue to play a very valuable role. Due to a shortage of housing UK-wide, this is a market place that demands expertise, especially now. The best will adapt and prove their worth, with the survivors growing in size.”
With NO-profits!
The Scotsman: Standard Life rules out £100m with-profits fund
STANDARD Life has rejected a call to divert £100 million a year from its profits to fund a decade-long programme to fill the firm's endowment policy "black hole". The plea to bolster the fund, set aside to cover shortfalls in with-profits mortgage endowments, came at the company's annual general meeting in Edinburgh yesterday. Guess Brown and Darling won't loose any sleep over this issue.....! Think I'll change my blog name to 'who stole my endowment'!
What to expect from a discredited government
ThisIsMoney: £10bn lost in tax credit mistakes
"Fraud and error in the tax credit system has cost the taxpayer £10bn over just four years. The amount is enough to pay for the 2012 Olympics or equal to just over 3p on income tax. The overpayment crisis runs alongside a growing controversy over the way tax credits favour single parents at the expense of couples. Researchers have shown that some couples would be £100 a week better off if they split up thanks to the effect of tax credits" This is the beginning of the collapse of the Labour social policies as we know them! long overdue!
Pay buy-to-let with benefit money!
Times: Councils culpable as benefits fraudsters steal £140 million from taxpayers
With 6m people on benefits, £140m of fraud is a clear understatement. "A tenant who claimed benefits for homelessness and was given a tenancy had actually bought two homes in different London boroughs and was renting out both" what a surprise!! if you suspect or hear about these abuses report them to your Council and the DWP Hotline 0800 854 440
More of the same but...
BBC News: Food price rises 'to hit UK hard'
As mentioned, this is more of the same inflation news. what makes this interesting is the final couple of paragraphs. Ernst & Young are seriously suggesting removing Food and Fuel from the inflation measures. I mean - what's the point of monitoring the cost of living and removing the essentials of living. I can't eat HD TVs. "Inflation's getting out of control... we need a way to control the rise in food and fuel prices. Any ideas?" "Stop measuring the food and fuel prices?" Also - the fairyland tale rate of 1.7% inflation from food and fuel? Please.
House prices won't crash!
Times: Citigroup shuts UK call centre and 49 branches
Citigroup announced plans yesterday to extricate itself completely from new sub-prime lending in Britain, with the loss of up to 700 jobs. The American bank is closing down Future Mortgages, its mortgage operation, and CitiFinancial, its unsecured loans business.
Food for thought
Market Oracle: Grain Markets Panic Buying, Export Controls, and Food Riots
Last month Taylor delivered some bad news. He pegs the odds of a major drought at 1 in 3, about double the usual risk. "There is a significant chance of drought," he said. At Iowa State , Taylor seeks to put the reams of weather data into historical context. A major drought typically strikes the Midwest every 18 or 19 years, and the last one hit in 1988. Taylor noted the average length of time between major Midwest droughts is 18.6 years. "The longest gap between major droughts in 800 years is 23 years, so if we don't have one by 2011, we'll break an 800 year-old record," Taylor said "We're overdue," he noted.
Headline trying to stop a crash...
Express [Who else?]: HOUSE PRICES WON’T CRASH
''...HOME owners received a double dose of good news yesterday as experts dismissed predictions of a property crash – and Britain’s biggest mortgage lender cut its rates. Despite doom-mongers’ gloomy forecasts, house prices remain up on last year with annual growth at 1.7 per cent last month....''
Crisis continues to build..........
Telegraph: Mortgage debt fears hit banks' shares
''...Bradford & Bingley's (B&B) shares slumped to a record low amid fresh fears about the mortgage market. Jitters about a potential increase in bad debts also hit other UK banks, including HBOS, owner of Halifax and Bank of Scotland, and Royal Bank of Scotland. The further slide in banking shares came as investors focused on problems that could lie ahead for the UK's banks. ...''
This latest result is the first Roy Morgan Consumer Confidence Rating since September 1993 to be less than 100.0 points. Gary Morgan says
marshallplace: The May Roy Morgan Consumer Confidence Rating is 97.1, down 3 points from April and a massive 25.4 points below the May 2007 result of122.5
"The large jump in Australians who expect their family to be in a worse financial situation in a year's time shows Australians are beginning to worry that the downturn in economic conditions is likely to affect them and their families."The Reserve Bank, which finally noticed the distress in the community and did not again raise interest rates at its meeting earlier this week, May 6, should be dropping interest rates at its next meeting in June before the Australian economy enters a recession Australians don't need."
The recent surge in crude oil, gold and copper prices to record highs has reignited the stock market.
herald: A collapse of the commodity bull run would have a disastrous impact on the Australian stock market and the country's economic growth.
This is the first time resources has dominated the market since the 1980s.
Hold on tight, because it's about to hit hard. The great mortgage meltdown is coming.
ninemsn: Already record numbers of Australian homebuyers are going to the wall.
it set off a chain reaction that's now being felt all around the world. Including, right here in Australia Already record numbers of Australian homebuyers are going to the wall
Get informed.
Revolver Entertainment: Taking the Liberties
Think that you may want to protest at some point against the theft of our wealth from monetising the debt? From bailing out international financiers with our money? From being priced out of having a home and family by the banks for the past decade? Think again. Good O'l Mr Blair took away that liberty from you. Watch "TAKING THE LIBERTY" to see what you don't read in the newspapers. It is a shocking but hilarious polemic documentary that charts the destruction of all your Basic Liberties under 10 Years of New Labour. Released to coincide with Tony Blair's departure, the film and the book follow the stories of normal people who's lives have been turned upside down by injustice - from being arrested for holding a placard outside parliament to being tortured in Guantanamo Bay.
Feeling compfortable?
The Times: ‘Big Brother’ database for phones and e-mails
A massive government database holding details of every phone call, e-mail and time spent on the internet by the public is being planned as part of the fight against crime and terrorism. Internet service providers (ISPs) and telecoms companies would hand over the records to the Home Office under plans put forward by officials..................Off topic again I know but this isnt funny
Monday, May 19, 2008
Sound the air raid siren - things are getting desperate!!
Money Supermarket: BRADFORD & BINGLEY - High Life 2-in-1 Saver Issue 2 - 8%!!!!!!
Northern Rock sequel with or without bank bailout!
Ztuart's at it again
Press Association: House price inflation flatlines
House price inflation continued to flatline in April but there remained no evidence of a market crash, new figures show. The latest House Price Watch by property firm Assetz recorded annual growth at 1.7% last month. Despite a slump since the beginning of the year, house prices are still showing annual increases - suggesting that the market is levelling out rather than heading towards a bust. Stuart Law, chief executive of Assetz, said the figures indicate that doomsayers' predictions of a market crash were misplaced.
Plenty of money to take our civil liberties away
The Independent: Firms await verdict on £2bn ID cards project
The technology industry will next week learn who the Government has awarded contracts to supply the £2bn biometric identity card programme, the last and among the most secretive of the recent crop of major public-sector IT schemes.............Off topic I know but its good to see where our taxes go....The Orwellian state
Another one bites the dust (with the loss of 400 jobs in Sunderland)
mortgagestrategy: Future Mortgages to close
Future Mortgages is closing down for new business as of Wednesday May 21. The lender says it is advising brokers and packagers of the news and that it is honouring all pipeline business. A spokesman for the lender says: "With effect from Wednesday we are closing down for new business. This will be a controlled shutdown." Citigroup, future's owner, will also stop new lending through its CitiFinancial personal loans business.
Ding Ding Round Two!
Guardian: C&G pulls its entire mortgage range
C&G pull there entire mortgage range. The new range will be 0.25% higher.
The statistics also suggest that the Bank of England's attempt to manage the economy through the base rate is failing in spectacular style.
mail: Lenders push up cost of personal loans despite Bank of England cutting rates three times
Banks are pushing up the cost of personal loans - boosting profit margins - despite the Bank of England's decision to cut the base rate three times
American downturn to be short-lived
Bloomberg.com: U.S. Economy: Leading Economic Indicators Index Rose in April
The index of leading U.S. economic indicators rose in April for a second month, the first back-to- back gain since October 2006, signaling that the current slowdown will be short-lived. The Conference Board's gauge increased 0.1 percent, better than forecast and matching the gain in March, the New York-based research group said today. The measure points to the direction of the economy over the next three to six months.
One of Thatcher's many legacies
Times: 100,000-plus face endowment shortfall
I have endownments with Standard Life - and feel like I am handing money over to a gambling addict - in the hope he will one day get a big win. FSA?, Financial Ombudsman?....don't get me started!
One of the MPC's saner members quits. Little hope for a sane replacement
Telegraph: Rachel Lomax to leave Bank of England, sparking Treasury row
I wonder if the people in government will choose a dove or a hawk at this crucial time? Prudence or profilgacy? Hmmm. Sensible high borrowing costs or "'to hell with it all' keep the cheap money coming!" mentality needed right now ...
Eye watering figures at the bottom of article
Bloomberg: Banks Keep $35 Billion Markdown Off Income Statements
Banks and securities firms, reeling from record losses resulting from the collapse of the mortgage securities market, are failing to acknowledge in their income statements at least $35 billion of additional writedowns included in their balance sheets, regulatory filings show.
Bradford & Bungle
Bloomberg: Bradford & Bingley Plunges on U.K. Mortgage Outlook
Bradford & Bingley dropped 16 percent to 112 pence, the lowest close since its initial public offering in December 2000, valuing the bank at 692 million pounds ($1.3 billion). Edinburgh- based HBOS Plc, Britain's biggest mortgage lender, dropped 1.4 percent, and Leicester-based Alliance & Leicester declined 2.4 percent in London trading.
Downfall
Bloomberg: UBS $100 Billion Wager Prompted $24 Billion Loss in Nine Months
"In the nine months ended on March 31, UBS lost 25.4 billion Swiss francs ($24.3 billion), more than any other bank caught in the worldwide credit crunch. Shareholders say Chairman Ospel and his fellow managers took a profitable Swiss bank and wrecked it on the shoals of structured finance and subprime mortgages".
Bradford & Bingley Plunges on U.K. Mortgage Outlook
Bloomberg: Bradford & Bingley Plunges on U.K. Mortgage Outlook
Bradford & Bingley Plc, the U.K.'s biggest lender to landlords, fell to an all-time low as Panmure Gordon & Co. said the economic outlook worsened ``significantly.'' Bradford & Bingley dropped 16 percent to 112 pence, the lowest close since its initial public offering in December 2000, valuing the bank at 692 million pounds ($1.3 billion). Edinburgh- based HBOS Plc, Britain's biggest mortgage lender, dropped 1.4 percent, and Leicester-based Alliance & Leicester declined 2.4 percent in London trading.
BTL investors under more financial pressure
MortgageSolutions: BTL deals above a ‘psychological’ 6%
Mortgages for Business, the specialist buy-to-let mortgage broker, has warned landlords almost all buy-to-let products in the marketplace are now priced above a ‘psychological’ 6% - a trend they expect to continue for the foreseeable future. The firm noted Cheltenham and Gloucester last week withdrew its 5.89% five year fixed mortgage replacing it with a 6.29% five year fixed rate. Jonathan Moore, head of marketing at Mortgages for Business comments: “Other than a few exclusives available for a limited period, all mortgages on our sourcing system, which searches the market, are priced above 6%. This is first time we have seen this situation this year and certainly for several years. Lenders with mortgage products below 6% have been flooded with applications and have been forced to withdraw
Monday evening at The Comedy Club - Paragon’s latest buy-to-let (BTL) index.
FT Adviser: Rental incomes rise 14 per cent
Rents continued to rise in April as tenant demand for private rented properties grew. Rents have risen nearly 14 per cent over the last year to stand at an average annual income of £12,048 in April, having broken the £1,000 a month barrier in March.Paragon also revealed that the buoyancy in the private rented sector has been spurred on by the fact people in their thirties and forties still cannot afford to get on the property ladder and are having to rent instead.
The tax & spend days of Labour are coming to an end
Mail: Cameron calls for Government to 'live within its means' in return to Thatcherite values
''...David Cameron today echoed Margaret Thatcher by promising "good housekeeping" to purge waste from government and - eventually - deliver tax cuts. In a keynote speech he promised that a future Conservative government will use the saved funds for "essentials" and to ease the tax burden on families. ...''
The lie that is CPI.....
Mail: Food prices rising at the fastest rate since records began 10 years ago
''...Food prices are rising at their fastest rate since records began more than a decade ago, according to devastating figures published today. The cost of 'basic' food from flour to eggs and beef mince to cheese have soared to prices never seen before. The figures, from the Office for National Statistics, highlight the crippling impact on families struggling to afford their weekly shopping bill. ...''
Guess who voted for a cut
Reuters: BoE minutes expected to show 8:1 vote to hold rates
Minutes of the Bank of England's May 7 policy meeting on Wednesday are expected to show only arch-dove David Blanchflower voted for an interest rate cut this month. Minutes of last month's meeting revealed a three-way split on the nine-member monetary policy committee. Blanchflower voted to cut rates by 50 basis points, two others voted to leave rates on hold and the remaining 6 voted to cut rates by a quarter-point.
The next building bust
CNN: The next building bust
Nonresidential construction held up as housing slumped. But a slowdown for offices, hotels and malls is looming, which could be another jolt to the economy.
the new homeless
CNN: The new homeless 3:21
Scroll down videos and watch the one about the new homeless in the states...
"Bluffers" guide to property surveys
BBC Working Lunch: Housing Price Surveys
Analysis of what's happening in the housing market, as the Royal Institution of Chartered Surveyors warns of a 40% fall this year, while property website Rightmove says asking prices are actually up over 2% last year. This part of the programme starts at 6 mins into the show.
Why you should sell this May and go away
MoneyWeek: Why you should sell this May and go away
The FTSE 100 is riding high despite six months of financial turmoil. But with more credit-crunch fallout to come and commodities ripe for a correction, it’s now time to sell up.
Buying off plan - then plan to be ripped off!
Independent: How much will a new build cost if you fall for a freebie?
With mortgage lenders cautious about anything less than two years old, Laura Howard finds developers resorting to desperate measures to attract buyers
"When sorrows come, they come not single spies, but in battalions".
Independent: Plan to oust Brown as MPs claim he has lost support
Not directly related to HPC - but may reset hpwatcher's countdown....
Fun with numbers
FT: House sales to decline by third, says Rics
8 out of 10 owners say their cat thinks prices will fall sort of thing. The site marks this as a duplicate article, but I can't find it in the listings so I'll post anyway. "For 2009, Rics envisages further weakness in the early part of the year, followed by an improvement in market conditions." That's what they said in '92.
More nails in the coffin?
Guardian: Agents axe free home pack offers
'We had one client a few weeks ago who was having problems paying her mortgage and wanted to put her home on the market,' said Daniel Carter, managing director of Jonathan Hunt, an estate agent in Ware, Hertfordshire. 'She couldn't afford the upfront cost of the Hip and couldn't defer payment because of problems with her credit record.'
Number of transactions could fall by 40%
FT: House sales to decline by third, says Rics
The number of house sales could slide by more than a third this year unless economic circumstances improve, according to the Royal Institution of Chartered Surveyors. House prices are set to fall by 5 per cent, the professional body will predict on Monday, but the most striking impact of the credit squeeze will be on the number of transactions, which could drop by up to 40 per cent.
Another take on Broon's housing policy
Daily Mash: Government to give your neighbour's house to junkies
"Junkies are finding it increasingly difficult to get onto the housing ladder as they deal with the combined pressures of taking crack, swearing at each other as loudly as they can and throwing their rubbish over the garden fence."
Hear from the man who is ultimately setting the UK base rate
Times: Jean Claude Trichet warns of 'very significant market correction'
"acting to restrain rampant inflationary growth was the best way to ensure stability and job security. “Price stability and credibility in price stability in the medium term is the best way to have a high level of sustainable growth and sustainable job creation,” he told the BBC"
A&L and B&B fall on short selling
Citywire: Bradford & Bingley plummets on bad debt worries
Shares in embattled lender Bradford & Bingley fell more than 9% on Monday morning on worries over bad debts. Its FTSE 100 rival Alliance & Leicester was also trading down over 3% after Goldman Sachs cut its price target from 438p to 350p. A&L is being watched closely for a decision on a rights issue to shore up its own capital base after announcing worse than expected write downs of £192 million last week.
"if the government were expecting housing market salvation to come from the Old Lady of Threadneedle Street they were backing the wrong horse"
BBC: Will Bank of England's rescue plan work?
When the Bank of England launched its Special Liquidity Scheme, the Bank and the government had rather different ideas about what would count as a success. Four weeks on, the Bank thinks the £50bn-plus official bank lending scheme has done what it was asked to do, though it is still early days. The government is less enthused. I'm told that Number Ten advisors have been calling in City experts to explain why the programme has not had more impact. (Stephanie FlandersEconomics editor, BBC News)
So called middle class under huge debt pressure
Firstrung: Middle class debt stretching agencies to limit
As the cost of credit rises, and fixed rate mortgage deals end, middle class people who took out loans when money was cheap are turning to advice agencies who used to see mainly benefit claimants and social housing tenants...Transact member Community Money Advice (CMA), which supports money advice services across the UK and Ireland, says one of its centres in Haywards Heath has had to close its doors to new cases because of the dramatic increase in demand.
Money, CPI, and bubbles
Zeal LLC: Money Inflation
It is ironic that the surges in money never go into the sector the Fed is trying to bail out. The tech-stock bailout attempt went into housing. And the housing bail out is already starting to flow into commodities. This is a serious problem for the Fed. When monetary inflation hit tech stocks and housing, people saw it as good. But when monetary inflation hits commodities, most folks aren’t going to be thrilled.
Starring Brown, Boom and Bust. Misdirected by Prudence
Telegraph: UK economic hangover set to worsen after 16 years of plenty
"After all, the fall in house prices has only just begun. When you look at the scale of over-valuation in the housing market (about which I have been banging on for years) and the scale of the coming squeeze on bank lending (about which I have been banging on for the last few months) you have to imagine that house prices have much further to fall."
Are we too dim to save?
MoneyWeek: Are we too dim to save?
"...an awful lot of people in the UK don’t save not because they are too dim to open a bank account, but because they get paid the minimum wage. After paying all Gordon Brown’s rapacious taxes, their out-of-control mortgage or rent, buying a few bus tickets and eating, they’re lucky not to be bankrupt. Saving is a distant dream."
Is UK CPI 'adjusted' too?
Dailyreckoning: Consumer Price Indexes May Lie
The IMF, for example, says food prices rose 43% last year. Yet, after the feds waved their wands, US food costs were up only 5.1%. And import costs rose 15% year to year – according to the numbers when they first got off the boat. But by the time the Labor Department statisticians had finished ‘adjusting’ them, they were down to only 0.2%. “Inflation may be worse than the consumer price index shows,” reports a suspicious USA Today.
Young_mark bypasses HPC site
BBC News: PM launching online question time
Gordon Brown is seeking to embrace the digital age by launching an online version of prime minister's questions. In an introductory video on the Downing Street YouTube site, Mr Brown says the online question and answer sessions will be a "regular event" and offers to answer questions on globalisation, climate change, housing, jobs and public services. "Politicians get a chance in prime minister's question time and other question times - I think it's time the public had a chance," he says.
surveyors warn of home sales fall of 40%
bbc: surveyors warn of home sales fall
sheer panic in the market imo.....this is just the lull before the fall and prices I believe will fall for 5-10 years
The failure of two home builders is a serious jolt and the worry if that it is a sign of things to come .
afr: Australian Housing collapses ring alarm bells
Australian Housing collapses ring alarm bells The failure of two home builders is a serious jolt and the worry if that it is a sign of things to come . The largest project home builder in NSW BBeechwood Homes , collapsed this week throwing hundreds of home buyers and sub contractors into limbo
An alternative reality.....
Express: HOUSE PRICES UP £3,000
''...Peter Bolton King, chief executive of the National Association of Estate Agents, said: “There is no housing crisis. We do not have a credit crisis. If anything, we have only a crisis of confidence. Property in Scotland is selling, as are homes across the UK’s university towns, for example....''
Such a fall would threaten a wider recession as furniture and carpet stores and firms selling fridges, washing machines and other household products all suffer the knock-on effects
mail: House sales set to plummet by 'up to 40 per cent', warn experts
Others to feel the pain would include estate agents, where thousands are already being made redundant, and solicitors specialising in conveyancing. RICS warned that the number of home sales could plunge by around 400,000 to approximately 600,000 and said the second half of the year would be a "difficult period for the housing market".
Debt advice centres in middle-class areas have seen increases of up to 500 per cent in the numbers of people pleading for help. There are even fears of suicides prompted by despair and shame.
mail: Now desperate middle class families face huge debt crisis as more and more professionals plunge into the red
Middle Britain has been hit by a devastating debt crisis, experts said yesterday. Even apparently well-off people with good jobs have plunged into the red.
Newspeak - Relevant today, as ever.
george-orwell.org: 1984 - George Orwell
For discussion purposes. Much of the VI nonsense about house prices is ominously similar to George Orwell's Newspeak language, which cuts out words that do not match the aims of Big Brother. The basic idea behind Newspeak is to remove all shades of meaning from language, leaving simple dichotomies which reinforce the total dominance of the State. The underlying theory of Newspeak is that if something can't be said, then it can't be thought. Generically, Newspeak has come to mean any attempt to restrict disapproved language by a government or other powerful entity. - I'll start off. The use of statistics like CPI deflecting attention from monetary expansion. Negative price growth, eliminating the phrase: price falls. The national socialist dichotomy of blaming immigrants for high prices.
Asking prices up 1.2% - but Shipside turns bear!
Rightmove: Wrong tactics for market recovery [pdf]
Average asking price up 1.2% in May, marking a record high of £242,500. Figures are skewed by "discretionary" selling of expensive properties in the South. In 6 out of ten regions, there are year-on-year falls. Miles Shipside, commercial director of Rightmove comments: “New sellers can see the storm clouds overhead but seem to believe it’s only raining on other people. The reality is it started raining last September, and has reached storm force in the last month. Sellers who are hanging out to achieve last year’s prices need to accept that the market has fallen and that they will end up being punished in the long-run.
Cry for help from Judy Heywood's career advisor
Times Online: Cry for help from debt-ridden middle class
The article starts off sensibly enough in the leading few paragraphs, but then as soon as she has everyone's attention, she starts spouting rubbish. She stoops to desperately talking up rental prices (thereby trying to talk up yields for property "investors"- and wait for the logic - according to Hometrack rents must be increasing, because people are not buying. This non-sequitur casually ignores the fact that there is a vast smelly throng of buy-to-let landlords being hammered by rising mortgage costs and falling rents. When the price of apples goes down, the price of oranges can only go up ... rright?
Sunday, May 18, 2008
Government cornered as the House Price Economy and Its Finances go pear shaped
thisismoney: 'Big tax rises' on way after 10p debacle
Experts are predicting big tax rises next spring to help bail out the Government at the ultimate expense of the Mortgage and Debt burdoned British Taxpayer so it looks like were in for a re-run of the 1970's again, but without any sound undergarments this time.
I wish that we had a politician making these statements. He could be a HPC blogger!
Ron Paul Blog: Big Government Responsible for Housing Bubble
"many in Washington fail to realize it was government intervention that brought on the current economic malaise in the first place." "The solution is for government to stop micromanaging the economy and let the market adjust, as painful as that will be for some. We should not force taxpayers, including renters and more frugal homeowners, to switch places with the speculators and take on those same risks that bankrupted them."
Starts crash as builders down tools
Firstrung: House building crashes by 21% inside the past three months
House building crashes by 21% inside the past three months The latest national statistics on house building were released under the auspices of the UK Statistics Authority on 15 May 2008...Statistics in this release present figures on new build housing starts and completions in England. Figures for the UK and constituent countries are also available in the accompanying tables. The latest statistics report on the period January to March 2008 and update those previously released on 14 February 2008. Key points from the latest release are: There were an estimated 32,100 seasonally adjusted housing starts for all dwellings in England in the March quarter 2008, down by 21 per cent on the previous quarter and 24 per cent lower than the March quarter 2007.
How long before they're taking 'Giros' off people like in the 80's?
Firstrung: Pay day loans see increase of fifty five percent since September 2007
With the prices of the essentials of life such as basic foods and petrol continuing to spiral out of control, a record number of Brits are turning to payday loans to help tide them over financially... Research from price comparison site moneysupermarket.com shows the take-up of short-term payday loans has seen a massive upswing, increasing by over 55 per cent since September.
Express continues their propaganda run
Sunday Express: Bargain Britain for Shoppers
Still no new developments on either the Princess Diana or Madeline McCann stories, so the Daily Express continues to tell us how wonderful the economy is, this time by reporting on the exceptionally low inflation we are experiencing at the moment.
more of the same
Orange News: credit crunch
A debt advice charity says it cannot cope with demands for help in some of the most affluent parts of the country. Transact said the increase was most dramatic among the middle classes, with many professionals and homeowners unable to cope with their debts.
Sinking ships and rats?
Independent: Treasury on back foot as deputy Governor quits
Considered to be a brilliant administrator, Ms Lomax spent her early career at the Treasury, where she was private secretary to Nigel Lawson, then Chancellor, in the mid-1980s. In a recent speech, Ms Lomax described the credit crunch as the "largest-ever peacetime liquidity crisis" and conceded there were many uncertainties facing the markets. She will have helped draw up the Bank's special liquidity scheme, launched a few weeks ago, which injected £50bn into the market by allowing banks to swap their mortgage securities for gilts.
All the way down!
Independent: Commercial market heading for 30% slump, warn property gurus
Key stat from the article, commercial property is down 20% already compare to a year ago. Can anybody guess what logic the VIs will come up with to explain why this won't happen to residential?
CPI is Orwellian Newspeak
Mises: What you should know about inflation
I just found the whole book online! Wikepidea ROCKS!! From: http://en.wikipedia.org/wiki/Henry_Hazlitt Anybody who wants to understand houseprice inflation, oil inflation, any inflation, MUST read this genius.
Credit Crunch Over????
Times: Credit crunch fails to produce the feared economic catastrophe
So what next?? The central bans are pumping money in and banks now have cash ... and are making profits from oil etc etc. Is this it now then - what of all the govt debt. My next door neighbour is an ex bank manager for Barclays and now an IFA for SME's, he says that this was only a liquidity problem and the bank bailout was right. He says now back to business and the credit boom can carry on???
No-One Is Safe
Transact: Middle class debt stretching agencies to limit
"As the cost of credit rises, and fixed rate mortgage deals end, middle class people who took out loans when money was cheap are turning to advice agencies who used to see mainly benefit claimants and social housing tenants. Transact member Community Money Advice (CMA), which supports money advice services across the UK and Ireland, says one of its centres in Haywards Heath has had to close its doors to new cases because of the dramatic increase in demand." The combination of increased taxes, increased costs and runaway credit have made life unaffordable even for the relatively wealthy.
Economic evolution - are we heading for a 'mass extinction'?
ABC Radio: Lessons from financial history - Professor Niall Ferguson
A long but interesting programme worth a listen - it draws parallels between evolution and economics and discusses are we heading for a 'great dying' in our financial and economic institutions as a result of the credit crunch.
The real reason why property prices are so high manifests itself...
Guardian - The Observer: Epidemic of debt spreads to Britain's middle class
Easy money, borrowed to pay for extras and luxuries, is a big contributor to the problem, says Richard Blake, from Meridian Money Advice in Greenwich. 'Many of the people we are seeing borrowed money over the past couple of years simply because they could. I had a young semi-professional in last week who owns her home and had borrowed £25,000. When I asked her what she had borrowed the money for, she couldn't tell me. We never saw this kind of thing until recently,' he says.
Hot US property market!
Guardian: Fire sale
It may be an extreme way to kiss goodbye to a dream home – but a growing number of Americans are torching their properties when they find themselves overwhelmed by sub-prime mortgages.
The Fruit of Greed
The Times: Is Britain's love affair with the property market finally over?
The “fishing stories” about houses you wish you’d bought, the buy-to-let plans, the fantasies of gains on foreign properties – these conversations diminish as the mood becomes more chastening. Meanwhile, the people facing repossession – and perhaps also the general public – have learnt the value of suspicion. “Don’t trust banks an inch,” says Sir Charles Wolseley. “They’ll force lending on you in fine weather and claw it back when it’s stormy.”
Saturday, May 17, 2008
This is called 'Progress'
THE INDEPENDENT: Prices up, profits up: businesses pass on cost of economic crunch to the consumer
Concern is rising that consumers rather than businesses are bearing the full cost of the credit and raw material crunches that are destabilising the world economy and threatening to plunge some countries, including Britain, into recession. One step forward Two steps back !
Housing crisis in full swing
Standard: Town halls fear two million families will need social housing
Councils are struggling to cope with the flood of people turning to them for housing because of soaring mortgage costs, high property prices - particularly in London and the South-East - and more repossessions. Experts have already predicted that young middle-class people face having to live in council houses because they will be unable to buy or rent a private property." Tell me, how are prices and rents going to rise if people can't afford them?
Cartoon
Telegraph: Cost of Living
Cartoon on the cost of living and press previous for one on Gordons re-launch
The Bank is not blameless
John Redwood: Why has the government and the Bank of England failed us on inflation?
John asks the BoE ten questions. Long article and I suspect some will dissagree with some of what he says.
4.6 million households without fulltime employment
chennel4: 4.6 million households without fulltime employment
shows more of the crash gordon b*****cks of employment....on benefits more like of credit cards
Uh oh
FT: Inflation figures damp hopes of ease on lending
"Borrowers should brace themselves for yet more increases to mortgage rates as the latest jump in inflation and a bleak economic picture renew the pressure on lenders." Dear oh dear.
Just the excuse than Banks need to hike mortgages rates to cover their forthcoming losses
Times Online: Prospects of cheaper loans hit as inflation forecast sends Libor soaring
Two-year swap rates, a key benchmark for fixed-rate mortgages, have leapt from 5.27 per cent to 5.63 per cent in the space of a week. Darren Cook, of Moneyfacts, said: “We’ll see a bit of a lag and then fixed-rate mortgage rates are going to go up again.”
Please buy a house
bloomberg: Fannie Mae Bows to Pressure on Down Payment Standard
Fannie Mae, backing down from pressure from homeowner and real estate groups, will allow buyers in markets with falling home prices to purchase houses with 3 percent down payments, potentially increasing the company's risk.
Q1 2008 house price fall from the Land Registry data
BBC Property: UK House Prices
Find out the actual price fall in your region. Greater London 0.6%, South East -1.2%, South West -4.0%, East Anglia -1.5%, West Midlands -4.7%, East Midlands -4.6%, Yorks & Humber -4.9%, North West -4.4%, Wales -5.9%, Scotland -5.1%, North -3.7%. http://news.bbc.co.uk/1/shared/spl/hi/in_depth/uk_house_prices/regions/html/regions.stm NB. Contradicting to yesterdays BBC News “Scottish house prices rise again” (said by the VIs), Scottish house price has suffered from the second largest fall –5.1% according to the data.
Housing shortage? What housing shortage?
FT: Merryn Somerset Webb: It’s common sense that is in short supply
"But the best bit of all is the way this seemingly sudden surplus of new houses – houses no one wants to buy – throws light on the nonsense that has been used to rationalise the housing bubble over the past decade." Merryn shows up our dim politicians.
Shropshire - long established EA cuts back
Shropshire Star: Property firm axes branches
Well respective local EA (if there is such a thing) cuts back.......watch this space for me as the housing market unfolds. If the longer established firms are closing, what about the flash newcomers in their company Smart cars?
B&B - Analysts advise shareholders to sell
The ft: Analysts say sell B&B
B&B mortgage bank - 55% buy-to-let, 22% sefl certified with no proof of income. Oh dear, not good for B&B shareholders.
HBOS makes the rightmove
Independent: HBOS sells 13 per cent stake in Rightmove as agents feel the heat
Who better than HBOS would know where the housing market is heading?
EAs close down
Times: Top estate agents firm close to collapse after credit crunch
One of Britain's largest estate agents has fallen victim to the slowdown in the housing market, prompting fears for thousands of jobs around the country. Shares trading was suspended in Humberts, which has 80 branches from Central London to Hampshire, amid doubts about its viability. Other companies, including Connells, the second-largest chain, have started to raise their fees in an effort to keep afloat as they struggle with an average 40 per cent decline in the volume of business since the new year
There are lies, damned lies and then there are statistics
Daily Reckoning: Consumer Price Indexes May Lie
In April, in the US, petrol prices fell 2% says the Fed. Do you remember petrol prices going down in April? We don’t. As we recall, oil prices were soaring…and so was the price of petrol. Something smells funny in the air…a rat. It was largely thanks to this reported drop in prices at the pump that the Consumer Price Index registered a scant 0.2%. We checked the records found the price actually rose 12% in April. How come the Feds put it down as minus 2%? Turns out, they made a ‘seasonal adjustment.’ But turning plus 12 into minus 2 sounds like more than an adjustment; it sounds like either magic or major surgery…like turning a prince into a frog or a fat man into a slim woman. And its not the only prices that the Fed adjusted! Expect to see the same here soon!
Endless ramping yes but of interest rates!
Daily Reckoning: LIBOR Says It Isn’t Over
The Libor rate has increased by 0.08% over the last two days. Now with all that money from the BoE you would expect it to drop. However, it appears the banks want 90,000,000,000 and not the 50,000,000,000 that the BoE offered! When Libor goes up so do our IR. I wonder if we will soon see mortgage IR rates calculated using the old rule of thumb formula i.e. IR = BoE rate + Inflation + Bank's Profit. This will be eye watering!
Endless ramping
Express: New hope for end to slump
THE country began its recovery from the credit crunch last night as the economy showed the first significant signs of improving.
here was further welcome news for the housing market, a day after the Daily Express revealed that major lenders were finally beginning to cut their loan rates.
Figures to be released on Monday are likely to show that the average asking price for new properties increased by 1.2 per cent last month, up by £2,879 to a new record of £242,500.
One estate agent is so confident the housing market will bounce back he has offered to refund buyers if their home falls in value.
Friday, May 16, 2008
Gaaazuuunder!
Bloomberg: `Gazunderers' Thrive as Deals Fail in U.K. Home Slump
``I've just gazundered a 70-year-old lady who is undergoing a hip replacement,'' said Blavier, 39. ``You can't get a scenario to make you feel more guilty. But this is not my hobby. It's what helps me make a living.''
500,000 UK construction jobs could go ....
Times: Kier warns start of public sector slowdown
Kier, one of Britain's biggest construction and house building companies, today gave warning of a slowdown in public sector spending across the country. When asked by Times Online whether it was possible that up to half a million jobs could go across the entire housebuilding and construction sector - in a repeat of the early 1990s job losses, Chief Executive, John Dodds said: "Yes. We are looking at that [scenario]."
Is it different in Scotland?
BBC News Scotland: Scottish house prices rise again
I hope you'll forgive me for this slightly mischievous posting but I cannot help wondering what this story is about. I found this bit amusing: "The Edinburgh & Lothians Property Group (ELPG,) which brings together property solicitors, welcomed the figures. Steve Spence, senior partner at ELPG member-firm Neilsons, said they underline the message that Scotland has a distinct property market that is largely immune from the peaks and troughs that affect English homeowners." Kinda reminds you of arrogant estate agents perhaps?
By 'prevent', they mean 'cause'
Landlord Expert: Buy to let will prevent a housing crash
Strong rental demand will underpin the buy-to-let market and help the country avoid a more painful housing crash. "All our anecdotal feedback is that significant landlords... are absolutely seeing the current market environment as an ideal opportunity for them either to continue to expand their portfolio or to start expanding them again," said Jeremy Law, head of buy-to-let at [f'cked] mortgage lender Bradford & Bingley. Like other banks, B&B says the fundamental drivers behind buy-to-let -- immigration, fewer people per household, a more mobile workforce, first-time-buyers unable to get on the property ladder -- remain, and are driving rents higher. Rising rental yields in turn mean landlords are able to pass on the impact of rising mortgage rates straight to tenants.
Taking the rough with the smooth - and squealing all the way
New York Times: For Wall Street Workers, Ax Falls Quietly
People on Wall Street seem to be vanishing overnight.
Thousands are losing their jobs as hard-pressed banks cut deep. But while layoffs are nothing new in the financial industry (they come with almost every downturn), this round seems different: it is eerily quiet.
No pity
MSN: Pity the estate agents
The International Monetary Fund said last month the UK has experienced one of the world's largest "unexplained" increases in house prices over the past decade, which has left prices here 30% too high, compared with just 10% over-value in the US. That could mean an average British home, now costing £196,000, might be worth just £137,000. The OECD, in a report last year reached a similar conclusion
You'd have been better off renting love.
New York Times: Collateral Foreclosure Damage for Condo Owners
Barbara Sanz has never missed a mortgage payment, but the plunge in real estate is punishing condominium owners like her anyway. Four years ago, she bought her first condo in a glassy new Miami tower when the building was filling up. Now nearly one in six residents in the 43-story building is battling foreclosure and their contributions to the building association are shrinking. Each of the remaining owners has had to chip in an extra $1,000 assessment and $50 more a month for cable and Internet. That is on top of Ms. Sanz’s $450 monthly maintenance fee.
Inflation is 2.5%. The PM says so.
New York Times: For Europe’s Middle-Class, Stagnant Wages Stunt Lifestyle
“In France, when you can’t afford a baguette anymore, you know you’re in trouble,” Ms. Renard said one recent evening in her kitchen, as her partner measured powdered milk for their 13-month-old son, Vincent. “The French Revolution started with bread riots.” “The problem is that if your salary rises more slowly than the cost of products you buy on a daily basis, you feel poorer every day.” “When I started working at 23, I earned almost the same wage that I earn now,” said María Salgado, a 37-year-old director of television documentaries living in Madrid. Fourteen years ago, her monthly salary of about 1,200 euros ($1,873), bankrolled a full social life. No longer. “The well-to-do middle class has become the tight middle class,” she said. “I’m surprised we haven’t started a
Good news blog article from Hilary Osborne
The Guardian: I've had my fill of Kirsty and Phil
The problem is that Phil's crash pad is my first-time buyer home - and in helping "successful barristers James and Zoe pursue their dream of rural life", or whatever the mission is that week, the Relocation team are turning another property into a second home. And when the buyers are planning to spend half the week in their "sprawling family home in the country", the effort seems particularly misplaced. From April - but I agree whole-heartedly - 'say no to property porn!!!'
Thought we all needed something for the weekend
mysinglefriend: mysinglefriend® is the brainchild of TV presenter Sarah Beeny and her childhood friend, Amanda Christie.
Slight diversion - but I think with all the dire news this week, we all need a little bit of Beeny... Came across this - no not literally www.mysinglefriend.com
More EA job cuts
Property Week: Eighty jobs go at Crest Nicholson
Developer Crest Nicholson is cutting 10% of its workforce because of the severe downturn in the housing market.
If Carlsberg did a rights issue it would probably be the best rights issue in the world
Times online: Carlsberg launches £3bn rights issue for S&N
Bit off message - but if the banks can do - why no everyone else. Think I'll launch a rights issue - go to my local pub and say unless they give money I won't drink there anymore....
Aux grands maux les grands remèdes.
Times: Eurozone growth fails to halt fear of effects from global downturn
The French/German view that at the centre of Europe they are safe from the 'US excesses' prove wrong! Watch this space.
Panic on the streets of Belfast.....
Belfast Telegraph: Developer to pay first-time buyers' deposit
"One of the province's top residential property developers today threw a much-needed lifeline to beleaguered first-time buyers by offering to pay a 5% deposit and stamp duty." Mr Fraser explained the offer would relate exclusively to the development's remaining Phase 4 homes. "Our view at the moment is that there are many potential home buyers out there who are being hindered from getting on to the property ladder by the recent changes to lending criteria by many banks here and in Great Britain which we feel is rather unfair," he said. PHONE NUMBER AND EVERYTHING - WHY IS THIS BLATANT ADVERT BEING RUN AS A NEWS STORY?
'Selling house is all about fear ' {from Sold the ITV comedy series}
The Guardian: Ghost sales deception comes back to haunt estate agent
From Tuesday 13th May An estate agent's novel way of coping with the property slowdown cost him rather more than he expected, a court heard yesterday. Mark Halls put up "sold" signs on carefully chosen empty properties which had nothing to do with him and had never been on the market, to give the impression that his firm was the one to watch.
Time to grasp fundamentals: Property is overpriced and EAs too weak to tell Vendors. Result: Collapse on the cards.
The TImes: Humberts shares suspended over financial fears
"In February the group reported a £17 million post-tax loss and gave the first warning about its future. At the time Humberts blamed the slowing property market for its financial woes and said that it was in urgent talks to raise cash without which there was a “material uncertainty” about its future." If estate agents can tell their customers (the vendors) to price realistically, then people will be able to afford the mortgages and comission can come in. Come on EAs - stop the lunacy. Bramptons in Beaconsfield are an example of some crazy pricing. A house valued at about £475k off-plan (it was being gutted, extended and rebuilt) in April 2007 goes on the market for £675k. Apparently the buyer didn't go with EA advice. Sure. Property taken on anyway. Craziness like this causes woe.
Utterly twisted logic!
BBC: CPI target to 'crucify' consumers
Consumers will be "crucified" unless the government changes its inflation target, a leading economist has warned. Peter Spencer from the influential Ernst & Young Item Club is urging ministers to change the 2% inflation target used by the Bank of England. He warned that interest rates would have to stay at 5% if inflation is to be brought down to 2%. He added that keeping interest rates at their current level would hurt hard-pressed households. With annual inflation at 3%, the Bank has little room to cut borrowing. March's 0.8% monthly rise in consumer prices was the steepest for nearly seven years. He called for the Bank of England's remit to change so it focused on "core inflation", a measure that excludes food and energy prices and is used in the US.
Snouts in the trough
BBC: Open secrets: MPs in High Court blow
MPs have lost the latest round in their battle to keep secret the full details of what they have been spending on their second home. In its decision issued today the High Court has backed the earlier Information Tribunal ruling that receipt-by-receipt details should be published. Due to other freedom of information requests the House of Commons authorities has already been forced to concede the publication of the amount spent under sub-headings such as mortgages, cleaning and groceries. This decision would take that much further into the release of individual invoices and receipts for spending for the 14 MPs involved in this case. The decision is a huge embarrassment for the Commons authorities.
Has hpwatcher set his countdown going yet?
The Economist: Gordon Brown's woes - A flimsy fightback
WHEN Gordon Brown became prime minister last June, few doubted that it was his commanding performance in ten years as chancellor of the exchequer that made him the uncontested candidate. Yet in his astonishing fall from grace of the past few months, economic and fiscal stumbles have featured large. A haunting precedent is the short-lived administration of Anthony Eden, famed as a diplomat, who was felled by his mishandling of foreign policy in the Suez crisis of 1956.
UK house prices to follow US lead?
Moneyweek: Don’t buy into this sucker’s rally
American house price falls, the malaise that started the crisis, will continue. They are deflating at a 32% annual rate now, up from 8% six months ago, and with 4.6 million homes on the market – almost double the average inventory in pre-bubble days – the outlook is grim...
Blame it on the fatties!
BBC News: Obese blamed for the worlld's ills
Obese people are contributing to the world food crisis and climate change, experts say. They are also responsible for using more fuel, which has an environmental impact and drives up food prices as transport and agriculture both use oil.
Bank of England buys more junk with our money
FT.com: Banks eye £90bn in mortgage asset swaps
You thought BoE were swapping just £50bn of 'mortgage-backed assets' for your hard-earned cash. But already it looks like we're up to £90bn of the stuff. Good job it's all AAA rated.
Looks as if even Rightmove is feeling the pinch
Times Online: Rightmove stuns market with fund raising plan
Investors dumped stock in Rightmove today as the property website announced plans to raise funds through a share placing, weeks after warning that rising estate agent closures would have an "adverse impact" on the business.
Suggestion to dump inflation target is what would really hurt the poor
MoneyWeek: Forget scrapping the 10p tax band: here’s how Gordon could really hurt the poor
"If you really want to rob the poor, Mr Brown, forget about scrapping 10p tax bands. Dump your inflation target, and watch as the pensioners, the low paid, and those who saved their money in the mistaken belief they were being responsible citizens, slide into penury as their fixed incomes utterly fail to keep up with living costs. But then, all those buy-to-let investors will vote for you, so who knows – it might be worth it."
Lots of hoo-har from the politicians so thought I'd look it up.
Metropolitan Home Ownership: Housing Options
Just thought I'd post this website - in case you needed some reading material to see out Friday afternoon.
Lame security risk excuse for secrecy not bought by judge
Reuters UK: MPs lose bid to keep second home expenses secret
LONDON (Reuters) - Members of Parliament must disclose details of expenses claimed for second homes and their location, the High Court ruled on Friday. House of Commons authorities had sought to block the publication of second-home expense claims for 14 current and former MPs -- including Tony Blair and Gordon Brown -- requested under the Freedom of Information Act.
Could It Happen Here?
Houston Chronicle: Electricity Retailer Won't Honor Fixed Price Contracts
With pressures mounting on disposable income, and monthly household mortgage costs escalating, the more sensible fraternity may have locked in their utility accounts to avoid cost increases in gas and electricity supply. But as the US' National Power Co. is demonstrating - companies are already frantically looking for ways to extricate themselves from such deals. One to keep an eye on; if only because it clearly indicates where they think energy prices are going.
May 16th
BBC News: US lists polar bear as threatened
Well, S2R, contrary to your own view of ethics, today has given the world a huge indicator that your underlying idea is correct. America, today, protected the Polar Bear. From here on in, ANY Federal or State policy likely to unjustifiably exacerbate global warming IS legally challengable. Note that law and power are required to achieve this type of ethics. The press seem to be in denial. It hasn't hit the front page of American papers or the BBC! href="http://www.nationalpost.com/opinion/columnists/story.html?id=517956" id=u-AFrqEzezHIR5SlxaC7FAGMArRJqbxseIRg:r-0_1211934549>Will Canada deem the polar bear - Clearly, there is a knock on effect. We merely need to await the results of the first legal challenge to a climate negative policy to see implementation of the change.
how thin?
CNN: World economy on thin ice - U.N.
UNITED NATIONS (AP) -- The U.N. says the world economy is "teetering on the brink" of a severe downturn and will grow by only 1.8 percent in 2008. That's down from a global growth rate of 3.8 percent in 2007. The U.N.'s mid-year economic projections released Thursday blamed the downturn on further deterioration in the U.S. housing and financial sectors in the first quarter.
Home Expenses - Freedom Of Information
BBC News: Commons loses MPs' expenses fight
The House of Commons has lost its High Court battle over an information watchdog's decision to force disclosure of MPs' expenses.
Rightmove are short of cash...
Martin Wolf lays it down
FT: Britain must not cut loose its anchor
The lesson of the 1970s was simple: letting inflation rip, to avoid pain in the short run, greatly increased pain in the long run. The UK must not repeat that error. Today, the combination of a devaluation with tight monetary policy gives it the best chance of escaping from its predicament. It enjoys this option because it decided, rightly, not to join the eurozone. But the country must have the will to make that option work. There is no sane alternative.
Bad news for UK and USA - debt junkies of the world
BBC News: Exports bolster Japan's economy
With news yesterday that German economic growth is robust and exports strong, now Japan looks to be weathering the 'storm' of the credit crunch. I think the UK and USA have put spin out there that the present economic troubles is truly global, however the situation looks far, far worse for us. Can anyone else think of a 'leading' nation in a worse position economically than the UK going forward ?
Be positive, sell newspapers......
Express: HOORAY! CHEAPER HOME LOANS
First we get: ''...Home owners were given the best news for months yesterday when the second major lender in a week cut its mortgage rates...'' then we get: ''...Admittedly, the Abbey cuts of 0.05 per cent on flexible and tracker loans and 0.17 per cent on fixed-rate deals are small...''
Watch mining shares drop and gold prices go up?
Reuters: Venezuaea stops open pits and gold mines
Environment Minister Yuviri Ortega said the South American country will not give permits for any open-pit mines and will not allow companies to look for gold in its vast Imataca Forest Reserve. "Venezuela will deny environmental permits for the open-pit mine exploitation," Ortega told Reuters in an interview. "Neither private or public companies will for now explore Imataca's gold." Is this Chavez turning all green on us, or just trying to boost the value of his gold reserves, or thirdly sees America is struggling and has decided to twist the knife
Smoke and mirrors
BBC News: '1m more' on housing waiting list
About 4m people are now waiting for a council or housing association home, and the Local Government Association expects this to reach 5m by 2010.
Well, who wudda thunk it!
FT: Banks eye £90bn in mortgage asset swaps
Love this bit...the European Central Bank on Thursday voiced its “high concern” at growing evidence that banks are exploiting its efforts to unblock the frozen funding markets by using its liquidity scheme to offload more risky assets than it envisaged. Yves Mersch, a governing council member, said the ECB was now “looking very hard at whether there is not a specific deterioration of collateral” that the central bank is accepting in return for funds. He was speaking amid signs of some banks creating low-rated assets specifically so they can be traded for Treasuries at the ECB.
Coming here soon
BBC News: Property slump in Spain
House prices in Spain are in freefall, with estate agents telling customers that prices are falling by up to thirty percent. Brian O'Hanraha-hanrahan reports.
If you don't like the game, change the rules
Telegraph: Bank of England 'must abandon inflation target or crucify consumer'
'The Bank of England will "crucify" consumers unless the Treasury lets it abandon its inflation target, one of Britain's leading economic authorities has warned. The Government must consider re-writing the Monetary Policy Committee's remit or leave the UK to face an unnecessarily deep and painful economic slump, according to Peter Spencer, chief economist of Ernst & Young Item Club.' Perhaps house prices are shortly going to be considered for inclusion in CPI?
How many considered this scenario when they took on their mortgage?
Telegraph: Housing crisis: Mortgage rates at 8-year high
The average rate for a two-year loan, the most popular mortgage, have reached 6.64 per cent. This is the highest rate since 2000 and compares to an average rate of 4.34 per cent two years ago.
Thursday, May 15, 2008
Home Truths
Times: Q&A: Why house auctions are hitting the headlines
Cheerleader Senior First Officer Judith Heywood is facing the hard reality of the forced sales. And property has stopped shfting even in the auction room! "And even the Government, which likes to talk up the market, now believes that the best case scenario is a fall of 5 to 10 per cent this year - a projection revealed inadvertently by Caroline Flint, the Housing Minister" And now even the Times, which likes to talk up too, is confronted with the humiliation of repossessions! "So why are buyers not biting?" Laugh, laugh...
Last ditch attempt at proping up ailing market
Yahoo: Is There Still Hope For House Prices?
With the amount of scary property statistics being quoted everywhere just lately, you could be forgiven for thinking that (in the words of Dad's Army's Private Fraser) we're all doomed. Stories warning of a 1990s-style housing crash have become almost permanent fixtures in the media this year. And, given our national obsession with house prices, the mere whisper of a crisis is enough to send British blood pressure through the roof. Apparently there are reasons for being cheerful - but they do make me laugh and put my head in my hands as I worry about the author's now tainted reputation.
The Great House Price Crash...ehm ops sorry it's dated 2005 !!
BBC News: The Great House Price Crash
I think house prices will fall from peak to trough by around 20% Roger Bootle, Capital Economics 03/03/2005 !!!!
Fiddling and Rome burning comes to mind....
Times: Brown announces rescue plan for first-time buyers
Anyone earning less than £60,000 will now be eligible for the Government's shared ownership schemes. So let me get this straight - even people in the top tax bracket will be eligible? Bloody hell - house prices must be too high!
CCCCCCrash
Times: New housing starts plunge by a quarter
The Department of Communities and Local Government today said the number of new house builds fell by 24.4 per cent to 32,144 in January to March on the first quarter last year, and shrank by 21.5 per cent compared to the final three months of 2007.
Bradford & Bungle
Telegraph: Bradford & Bingley chief must go to restore trust after rights denial
On april 13 The Sunday 'Torygraph' revealed to an unsuspecting world that Bradford & Bingley was plotting a rights issue and that it had asked Citigroup to work on the plans. The ripples continue......Barclays next?
Libor going up again
ThisIsMoney: Credit crunch fears as libor jumps
Libor - the interest rate at which banks lend to each other - rose from 5.70% to 5.84% as banks reacted to yesterday's grim quarterly Inflation Report from the Bank of England, which all but ruled out further cuts in interest rates.
Not all robbers wear masks and carry a swag bag!
FT: ‘Sale and rent back’ sector to face scrutiny
Growing criticism of companies that buy poor people’s homes at a discount and then rent them back under tough terms has triggered an inquiry by the competition watchdog.
UK Sub-prime really does exist
Moneymarketing: FSA fines Thinc Group £900,000 for sub-prime failings
The FSA has fined Thinc Group £900,000 for sub-prime record keeping failings. Thinc and two of its group companies failed to have adequate risk management and compliance systems for its sub-prime mortgage business between January 1, 2006 and September 30, 2007..................
No comment
Reuters: Resilient buy-to-let may soften housing downturn
"All our anecdotal feedback is that significant landlords... are absolutely seeing the current market environment as an ideal opportunity for them either to continue to expand their portfolio or to start expanding them again," said Jeremy Law, head of buy-to-let at mortgage lender Bradford & Bingley. "In many ways (buy-to-let) is counter-cyclical." Please remind me, what did B&B say about their rights issue? "B&B, the number two player in the buy-to-let sector, has reported strong demand and said this week it would use a £300m cash call to continue lending"
Those who are buying - are buying terraced
Property Week: More than a quarter of homes bought are terraced
According to the Nationwide's latest figures 27% of homes bought are terraced.
Connells latest cry for help
mortgagestratey: Connells slams £200m pledge for housing market
Connells Survey & Valuation says the government's pledge of £200m to help the housing market is a "distraction technique" and just grazes the surface of what is needed. Ross Bowen, managing director of Connells, says: “This £200m is a drop in the ocean in terms of housing supply. It would only purchase around 1,000 homes.
Oh dear - we can't afford gadgets anymore
Guardian: DSG to close stores and lay off staff
Struggling high street retailer DSG failed to impress the City this morning after announcing that it will close more than 75 Currys.digital stores, axe staff and slash its dividend in an attempt to turn its fortunes around in the worsening economic climate.
They are planning for worse to come
Mortgage Introducer: Treasury meeting on repossession
She continued: “We are extremely pleased to be involved in today’s meeting where we will put forward various recommendations. These include, a review of the current qualifying conditions for state supported mortgage payments, the feasibility of creating a national mortgage rescue scheme, the implementation of the early protocol on repossession action as drafted by the Civil Justice Council and an examination of the possession action taken by sub prime lenders who are not presently regulated by the Financial Services Authority.” They all know what's coming!!
This fantasy of rents going up will soon end & BTL collapse
CityWire: Rising unemployment will hit landlords in the pocket
"ARLA’s figures show that nationally rents increased by 4% for houses and 2% for flats in the three months to March 2008, in the south east rents for houses were down 2% to £1,361 and down 5% for flats to £882. landlords will have to cope with rising rent arrears as families struggle to make ends meet" Builders stop building in order to corner the market? they will just dig their grave deeper: hundreds of thousand jobs in housing and EAs will be lost; and "if they are made redundant, they won’t be able to afford to rent either" Too bad the article lacks the usual commentary by Para-gone and my Assetz
BTL my Assetz!
CityWire: Just how bad is the state of buy to let?
“Will landlords precipitate the crash of all crashes while they squeal like pigs drowning in a rough sea of schadenfreude?”
Gordon Brown: the world’s best contrarian indicator
MoneyWeek: Gordon Brown: the world’s best contrarian indicator
"When Gordon Brown sold half our gold reserves all those years ago, it almost precisely marked the end of the yellow metal’s long bear market. So it’s fitting that now the UK property boom is well and truly over, he’s decided to go out and buy some houses."
Brown trying hard
BBC News: I can save economy again - Brown
"I think I can steer this economy through difficult times". Mr Brown - we want more conviction than THINK. "The reason it's going wrong are international factors that we are going to deal with". Oh dear. If there 'international', therefore 'external', how are you going to 'deal with them'? And if they can be 'dealt with', why haven't you 'dealt with them' before? I'm not party-political: I've voted both ways in previous elections. But poor Gordon really needs a spin-doctor to sort out his soundbites. Fast.
Bank of England independence is a joke
FT: No rate cuts before 2010
... in other words, there'll be a couple of rate cuts just before the next General Election.
Bush does the right thing for once
Wall Street Journal: Democrats Face Rescue Backlash
Old news now, but I don't remember seeing this reported on this newsblog - President Bush is vowing to veto a bill the House passed last week -- with the support of 39 Republicans, about a fifth of their ranks -- that would, among other things, allow certain homeowners to refinance loans through a government agency if their lenders agree to take less than the full amount borrowed.
Completely off-topic
Conservative Home: A case for legalising cannabis
But I'll link to it anyway to show that I think about more than just house prices.
The mess Labour always seems to leave behind....
Telegraph: Financial crisis: Labour's history is repeating
''...The twilight years of Labour governments are always like this: the pound in freefall, the economy sliding towards a possible recession and the public finances out of control. And the ultimate bill left in the hands of households, blameless in every respect but for their foolish decision to vote the ministers in....''
Slightly off-topic but a good reflection of rubbish mainstream media reporting
The Telegraph: Mankind is the 'Earth's biggest threat'
Global warming is causing significant changes to the Earth's natural systems and it is highly unlikely that any force but man-made climate change can be blamed . Read the comments at the bottom; they are almost universally saying this article is garbage
End of the road for property bulls
Independent: No rate cuts for two years, King hints as inflation heads towards 4 per cent
The Bank of England indicated that there is not likely to be another cut in interest rates for two years, as it forecast that inflation will reach 4 per cent this autumn.
Dummy Voted Out
yahoo news: Support melts away for wax British PM
"By a convincing consensus he is duly voted out of Madame Tussauds, becoming the first incumbent prime minister not to be featured in the attraction for over 150 years," the London tourist magnet said.
Mervyn not very happy today!
Telegraph: Recession danger is real, warns Mervyn King
Mervyn King warned families to brace themselves for a further "squeeze" on household finances as rising energy bills and food prices continue to rise. Mr King said that inflation was set to increase sharply to about 3.7 per cent - almost double the official target. As a result most British people will feel poorer this year as pay rises fail to keep pace with rising costs. The Governor - who said that "the nice decade is behind us" - also warned homeowners that property prices would fall further and that it was impossible to predict the scale of the decline. The British economy may now be heading for recession. Keep reading for even more glum news.
This man is drinking some of the same Kool-Aid, Gordon "2.5%" Brown does
Yahoo News: The US does not torture / UK inflation is 2,5%
I actually thought that this was a satire. I really did. The scary, depressing thing is, it is not.
Auction tsunami to hit UK shores?
Los Angeles Times: Foreclosure flood: 1,000 auctions per day in California
The number of properties in California up for auction grew 44% from March to April. If the UK housing market is 12 months behind, would anyone bet on 10% monthly price drops by this time next year?
Wednesday, May 14, 2008
Brown to use £200 million of taxpayers’ money used to buy unsold homes
Times: A return to Blairism as Gordon Brown looks back to save his future
The man has had 10 years with his hands on our money to get it right and hasn't, why should he have another chance to use our money to save his political neck?
PCC, sleeping policeman of the corporate machine.
Swarnturton: The Inevitable Appearance of Bias
The Press Complaints Commission is a body created and funded by the press, adjudicates a complaint based on a Code which the press has drafted, by means of a commission on which the press is substantially represented, and where the newspaper is defended by lawyers expert in the field in circumstances where the PCC will not make an award of costs to the claimant for equivalent expert assistance, where the PCC’s sole power is to make finding that the newspaper has breached the Code (to its own commercial advantage), but no financial penalty is imposed on the newspaper, or compensation awarded to the complainant, and where there is effectively no appeal against its determination. It is funded by the Press and its stated objective is to avoid state regulation.
OOoops - Cancel That!
Bloomberg: London's Walkie-Talkie Skyscraper May Be Delayed
The London office building dubbed the Walkie-Talkie, one of six towers over 500 feet (150 meters) planned for the city's main financial district, may be delayed by the commercial property market's slump, the developer said. Land Securities Group Plc plans to construct the tower at 20 Fenchurch Street in the city's main financial district. Demolition of an existing building on the site is due to be completed in early 2009 and construction work will start once a tenant has been found, said the company.
Inflation everywhere
TELEGRAPH UK: OECD warning as stagflation goes global
Price pressures across the emerging world are reaching levels that may soon threaten stability unless governments jam on the brakes. Inflation rates have reached: Venezuela (22pc), Vietnam (21pc), Latvia (18pc), Qatar (17pc), Pakistan (17pc), Egypt (16pc) Bulgaria (15pc), The Emirates (11pc), Estonia (11pc), Turkey (9.7), Indonesia (9pc) Saudi Arabia (9.6pc), Argentina (8.9pc), Romania (8.6pc), China (8.5pc), Philippines (8.3pc), India (7.6pc).
Assetz comedy act: Buying falling assets is a long term safe investment strategy
Assetz: Now for the long term
He elaborated: "Because prices are going to be shaky for the next couple of years you are going to have to wait a long time for prices to come up; it's got to be a long-term investment. Property is a long-term investment; it's not a get rich scheme." Of course, many seem to be doing just this, such as the 46 per cent of those who were revealed in the March survey of the Association of Residential Letting Agents to be planning to expand their portfolios over the next year. With so much uncertainty in the short-term, it may be a good time to hammer home the message that long-term is the only safe way to invest.
Not Again !!!
Telegraph.co.uk: Income tax row as an extra 150,000 people move into higher rate tax bracket
Accountants claim that Mr Darling was "disingenuous" in his statement to the House of Commons because the starting point for 40 per cent tax will be lowered by twice as much as he told MPs, writes Ian Cowie An extra 150,000 people will have to pay the top rate of income tax as a result of Alistair Darling's emergency budget, accountants calculate. Those affected are currently earning more than £34,800 a year but less than £36,000 in excess of their personal allowances.
Damn Right it needs reform, its rotten to the core!
The Guardian: Steel: press watchdog needs reform
See below a repost of my look at members of the Press Complaints Commission and its selection methods. It is the group that select that is the most scary. This is a follow up from the Press Complaints Decision I received in the post earlier today, posted here earlier today.
Forget about any more UK interest rate cuts
MoneyWeek: Forget about any more UK interest rate cuts
"Forget about any more interest rate cuts. Inflation is firmly on the agenda. It looks like the pound in your pocket will be losing another hefty chunk of its purchasing power over the coming months. Meanwhile, the economy will crash and burn – but there’s nothing the Bank of England can do about it."
Tax harmonisation only way out
Australian: Darling sweats over the bill as the party ends in UK
"IT WAS fun while it lasted and everybody drank too much, but the UK plc party is over and nobody can remember who promised to pay the bill." Weird article with a number of quite incoherent threads. Has its funny moments though.
Dreams of a life in the sun - over!
BBC News: UK expats face Spanish troubles
The hundreds of thousands of Britons who have moved to Spain in search of a better life have been hit by falling property prices, sometimes with devastating consequences.
Bradford & Bingley's £300m U-turn
MoneyWeek: What does Bradford & Bingley's £300m rights issue mean for banks?
Bradford & Bingley has become the latest UK bank to whip out the begging bowl, but don’t expect it to be the last. Its business model, like Northern Rock’s, worked fine when house prices were going up and people were hungry for mortgages. Of course, this is no longer the case...
Another great idea from a morally bankrupt Broon
Times: Got a few quid for the old rich folk?
"My house is my pension"?? then sell the house and pay the bills, what s the problem
Mervyn's speech
BoE: Inflation Report presentation
A very grim picture. Mervyn is a clear doommonger. The silver lining, the weakening Pound will boost exports. Exports? He is dreaming. The weakening Pound will mean immigrants will return home compounding economic decline.
Deck chairs? Titanic?
Reuters: Brown announces housing aid and banking reforms
LONDON (Reuters) - Prime Minister Gordon Brown announced 300 million pounds of new schemes to help the troubled housing market on Wednesday and proposed a new banking law to support financial stability.
Stuatz comedy club analysis - "property market is in serious danger of continuing to stagnate or even falling to some modest degree"
mortgagestrategy: Assetz chief: Bank should cut rates
Stuart Law, chief executive of Assetz, says the Bank of England should not use yesterdays spike in inflation as an excuse to hold back interest rate cuts........“There are however much bigger issues at stake. With mortgage lending down 48% since the same time last year the property market is in serious danger of continuing to stagnate or even falling to some modest degree. “I strongly suggest the Bank of England now lowers base rates very quickly to 3.5%"
And ... there goes Australia ...
news.com.au: House bubble bursts, but whose fault is it?
HOUSE prices in some parts of Sydney have almost halved as battling borrowers struggle to keep up with increasing interest rates.
How much longer can we be fooled by inflation figures?
Firstrung: Real consumer price index is closer to 8% - Fool.co.uk
The difference between the Consumer Prices Index (CPI) and the true rate of inflation means that for many people, household income lags behind personal inflation. Unless this is tackled, consumers will increasingly find they not only have less money to put away, but they will be forced to raid savings or turn to debt to make ends meet...
Fantasy article from Agents-7 Good reasons to buy now
Urban Spaces: Reasons to buy now!
An extract of their idiot innumerate reasoning below: Let's take a £300,000 property and look at two scenarios. Scenario 1 - The prices drop by a further 10% over the year Scenario 2 - We are at the bottom and prices will stabilise. The buyer who waits, notionally will save themselves £30,000 by holding off for a year, but to rent that same product will cost them approximately £300 per week or £15,000. So in truth, their gamble by waiting would save them only £15,000 and the money they paid in rent would have been used towards mortgage repayments on the loan. What about interest on 300 k at >300 p.week? or scenario 3 where prices fall 35%?
Brits still not 'got over' the Northern Rock fiasco
Firstrung: Will my bank survive the credit turmoil? Customers worry over banks' future
As British banks write off humungous sums related to the American sub-prime mortgage fallout, customers weigh up their banks' abilities to weather the credit turmoil...
Brits can't afford to have kids, or look after them
Firstrung: Cost of living takes its toll as disposable income reaches lowest level in a decade
The choice of caring for your own children is rapidly turning into a luxury available only to those who can afford it. A new study by uSwitch.com reveals that more than 1 in 3 (38%) new parents (those with children under 2 years old) are forced to return to work to make ends meet...
See decision in comment
PCC: Planning4ACrash (name altered!) vs The Independent
This was a useless exercise except for my ability to use it here to reveal here the folly of our press complaints system. Newspapers are, as we all know, entitled to be partisan, provided that they distinguish clearly between comment, conjecture and fact. Nowhere, however, is it necessary to explain the partisan vested interests that may lie behind the story. It is up to the reader to put one and one together. It should however, in my opinion, be the "journalist's" responsibility to explain how their vested interest benefits from the slant taken, because the general public, coming from a different vested interest are, by definition, unlikely to be able to recognise the impact of the partisan view without it being clearly explained.
"The MPC must focus on bringing inflation back to the target in the medium term."
BBC News: UK inflation woe 'set to worsen'
Mr King said inflation would probably stay above the government target of 2% for two years, hampering the economy. He added that house prices were set to fall further, though no one could be certain how far they would decline. ..."We are reverting to a more sensible and prudent approach to lending and borrowing," he added.
Brown spends £2.7 billion of tax payers money clear up his own mess
Times: Gordon Brown pays £2.7 billion to end 10p tax crisis
In a move to counter a back-bench revolt the chancellor performed one of the biggest U-turns in modern times by borrowing £2.7 billion to patch up the mess created by Brown. Analysts point out that raising the £2.7 bn will have to be paid for by additional taxes or cuts in public spending. Regardless of the massive cash injection 1 million of the lowest rate tax-payers will lose out as a result of the abolition of the 10p rate. Cynics could look at the Darling's statement as the tax payer being asked to pay for Gordon Brown political survival or a sweetener in the face of the Crewe & Nantwich by-election. Alternatively the prime minister is starting to listen. Whichever way you chose to view it, the whole mess has been created by astoundingly poor decision making by the Gordon Brown
Unfortunately I haven't bought any of these items in the last 12 months and have no intention of doing so - I have bought a fair bit of food and fuel though!
Times Online: Inflation buster: the 10 items that have fallen in price most this year
With the cost of bread now above £1 a loaf and petrol at £1.12 a litre, there seems no end to rising living costs. Just this week, the Consumer Prices Index, the Government’s preferred measure of inflation, shot up to 3 per cent. But there is some good news for shoppers. Believe it or not, the price of many goods is actually falling, and by quite large amounts. Below we outline the price of ten items that have fallen the most on average over the past year and give an example of each product.