December 2008 Archive
Tuesday, December 30, 2008 
The Eurozone is so much better placed - strong fundamentals and diverse economies:O)
Bloomberg: ECB Pressured to Cut Rates by Weaker Sales, Lending
“The ECB will have to go further,” said Gilles Moec, an economist at Bank of America Corp. in London and a former Bank of France official. The euro region faces “a severe and protracted recession.”.......and yet the euro continues its stratospheric climb against sterling and is predicted to break 1.50 against the dollar. Time to short the euro methinks.
pound parity - don't you love alliteration
Bloomberg: Pound Breaches 98 Pence per Euro for First Time on Rate Bets
"Bank of England policy makers voted unanimously this month to cut the benchmark rate to 2 percent and refrained from a bigger reduction on concern it may prompt an “excessive” drop in the pound, according to the minutes of the Dec. 4 decision."......since the 4th December sterling has dropped 17% against the euro. What exactly is the BoE's definition of 'excessive'?
We paid top dollar for a house in the desert! What were we thinking?
BBC News: Mood amongst US consumers worsens
House prices in Las Vegas fell 31.7% last year, beating the average for the 20 metropolitan areas surveyed which was a 18.04% fall. Of course we won't get a second year of house price crashes over here as we have sound fundamentals and a well placed economy.
Belt-tightening is required by all, including US government.
WSJ: There's No Pain-Free Cure for Recession
"It would be irresponsible in the extreme for an individual to forestall a personal recession by taking out newer, bigger loans when the old loans can't be repaid. However, this is precisely what we are planning on a national level" Peter Schiff
A$$
Telegraph: The Housing Market Will Come Back To Life Next Year
Assetz Predictz
Rightmove & RICS make last ditch bid for king of comedy club 2008
FT: 2009 earmarked as best year to get into property
Buying a bigger property in 2009 will be more viable than ever for homeowners already on the property ladder, according to Rightmove. Although first time buyers are largely still unable to enter the market due to the lack of mortgages and the requirement for large deposits, those wishing to upgrade their property will see many opportunities to do so in 2009. David Dalby, residential faculty director, Rics, said: "Because we have slumped so quickly the likelihood is the recovery will be very quick as well and the great danger is people being left behind, waiting that bit too long and suddenly finding prices are starting to move up again and being left behind, particularly first time buyers.”
Now they say it took everyone by surprise
Telegraph: Definitive proof that the Bank of England saw the financial crisis coming
Looking back in our archives I came across a rather important article. It dates from 2006, when the credit crisis was a mere apple in the financial system's eye and the City was enjoying one of its biggest booms in history. It reports on the BoE's Financial Stability Report, and shows that the Bank of England knew precisely what risk was posed by the dangerous build-up of debt which was brewing in the economy. As we reported that day, "The City could face a financial meltdown if the debt bubble bursts. The Bank is issuing a stark warning about the potential damage a credit crunch and a collapse in asset prices could cause to the economy and financial system.
Credit crunch hits Indian house prices
Rediff (India): Wait! Property prices to fall further!
Residential property prices crashed in the mid-1990s, and it took till 2002-03 for them to start rising again. When they did, however, the progress was rapid. Within a short span of time, the prices had risen so much that the budget buyer, who comprises the bulk of the market, was left out in the cold. For homebuyers though, things are getting better. A correction in property prices is already underway. [ALSO: See first comment for bad news about the Indian jobs market too.]
Debt awareness kicks in at last
Daily Mail: Borrowers in rush to cut card debts as job security disappears
The next two weeks will be the busiest time of the year for applications for new credit cards, with cash-strapped borrowers keen to shift debts so they can start 2009 on a strong financial footing. A mixture of Christmas overspending, stubbornly high mortgage costs as a result of the credit crunch and the growing number of redundancies are putting households under increasing strain. Half of all workers say job security will be their biggest concern in 2009.
Remind me again why the Euro is so strong?
New York Times: Germany Suffers as U.S. Buys Less From China
The United States, with its credit-driven economy, has long ensured that others, notably China, Germany and Japan, have been able to pile up trade surpluses. That dynamic has shifted, with Americans paring purchases at a ferocious rate. “As the American consumer now capitulates, the export bubble is the next to go,” the chairman of Morgan Stanley in Asia, Stephen Roach, said. “Export-led economies around the world are in for a very tough rebalancing.” There is a strong correlation between Chinese exports to the United States and German exports to China.
Monthly -1.9%, annual -12.2%
Land Registry: November 2008 Results
The data for November shows an annual house price change of -12.2 per cent and a monthly change of -1.9 per cent. This is the teenth month in a row where annual price change has decreased. This month's data continues the strong downward trend in house prices. The average house price in England and Wales now stands at £161,883, similar to February 2006 levels. Sales volumes have continued to decrease, with the number of sales averaging 48,599 per month in the months June to September 2008.
It May Be A Lagging Index, But It's Catching Up!
BBC News: Housing market sees another fall
House prices fell by a further 1.9% in November as activity in the market dropped again, says the Land Registry.This pushed the annual drop in property prices in England and Wales to 12.2% - the 15th consecutive monthly decrease, the figures show.
UK Inflation Forecast 2009
The Market Oracle: UK CPI Inflation, RPI Deflation Forecast 2009
UK is heading for deflation during 2009, which gives opportunities to investors to scale into investments.
Shhhhh.....
Daily Mail: Sterling's silent devaluation
The scale of the collapse of the pound has barely been recognised. With retailers falling over like ninepins, house prices in freefall and daily warnings of surging unemployment, it has been below the radar. But now it is a matter of when, not if, the pound will reach parity with the euro. Sterling has plummeted 32% against the euro so far this year, and 17% this month alone. It has also fallen 30% against the dollar from a peak of $2.11 to $1.46. In past decades a currency crisis on this scale would have threatened governments. But the latest fall in the currency ought to be helpful for exports to Europe. Euroland economies are fragmenting, and the entry of Slovakia into the euro on Jan 1st will not inspire confidence in the currency [WHO KNEW SLOVAKIA WAS JOINING THE EURO???]
Monday, December 29, 2008
Should this be RetailCrash.co.uk?
Reuters: UK retailer USC calls in administrators
Another retailer bites the dust: British designer fashion retailer USC has appointed administrators after falling prey to the consumer downturn. The chain's remaining stores, which employee 300 people, over half of whom work part time, are in the hands of the administrators.
Houses not selling
BBC 'News': 'Stagnation' hits property market
One in five properties in some areas of the UK has been on the market for over a year, according to research from property website Globrix. The picture of a stagnated market is most critical in the north of England. Rochdale in Lancashire topped the chart, with 26% of homes for sale remaining on the market for the whole of 2008. Globrix chief executive Daniel Lee said "Property prices are now very tempting and I am sure many buyers, having delayed for so long, will be closer to making their move."
December 2008 Comedy Club Classic featured in today's FT
FT: 2009 house price bounce could be as steep as fall: NAEA
House prices could bounce back over the next 12 months just as strongly as the dramatic falls seen in recent months, the National Association of Estate Agents (NAEA) has predicted. Chief executive Peter Bolton King said strong market recovery in certain sectors could be seen during 2009, but only if three critical indicators occurred. These include major lenders beginning to make money available to potential buyers, lenders passing cuts in interest rates on to the market and consumers regaining confidence in the state of the housing market if the market is to bounce back.
Even though homeowners have been helped by steep interest rate cuts, a total of 77% think they will
Guardian: Nine out of 10 shoppers plan to cut spending in new year
Britain is preparing for a bleak new year of spending cutbacks, job insecurity and prolonged recession, according to a Guardian/ICM poll published today. It shows consumer confidence has dropped sharply in the last month as the reality of the economic downturn hits home. The poll, carried out just before Christmas, finds near universal gloom about Britain's economic prospects: 86% say they plan to make cutbacks and live more cheaply in 2009 — only 13% expect to spend as much as they did last year.
Expatriates were lambs to the slaughter
Reuters: Sterling extends losses vs euro, falls beyond 97 pence
LONDON, Dec 29 (Reuters) - Sterling extended losses against the euro on Monday, falling beyond 97 pence to a record low and edging closer to parity with the single European currency. The euro rose as high as 97.10 pence by 0908 GMT, according to Reuters data, hitting its strongest level since the euro zone currency was introduced in 1999.
Chaos of 2008 causes havoc for predictions - Um, it didn't for HPC'ers but it stumped you eh, David
Times: Chaos of 2008 causes havoc for predictions
'Instead, things turned out gloomier than even the pessimists expected.' - Um, no they didn't we spotted the coming tsunami with unnerving accuracy! 'Forecasters always find it difficult to predict turning points in economic activity but there were other reasons why 2008 was an unusually hard year to pin down.' Mmm, not really if you have a brain! 'So any economist getting it right during 2008 would have required mystical powers of prediction. Small wonder, as I look at my annual forecasting league table, most got it wrong.' Again, we didn't David and I would guess none of us at HPC are professional economists. David Smith really is an embarrasment.
Housing cash machine demands money back
BBC News: Equity 'going back into property'
The net effect is that people are paying back their mortgage debts. Peak to trough so far from £17.1bn borrowed and spent in Q4 2004 to £5.6bn paid back in Q3 this year is a swing of £22.7bn. This reversal has happened far faster than following the '89 crash.
Can you hear that hissing sound of a deflating economy?
Press Association: Store price cuts likely to continue
BRC spokesman Richard Dodd said: "They have to be able to make an acceptable margin on what they sell in order to be able to cover their costs."
Property finder think -12% for 2009 but "worst is over". ho ho ho
The Times: Propertyfinder.com puts number on 2009 price falls
"House prices will fall by a further 12 per cent next year, according to Britain's longest-established property website, adding to the gloom for the nation's struggling homeowners. " "In spite of its apparently bleak prognosis, based on net mortgage lending to finance purchases reaching £40 billion next year, propertyfinder.com insisted that the worst was over in terms of the level of home sales. " Lets see - with many more about to be unemployed, commercial market dead, imported inflation, banks with more losses to declare - how do you think it won't be worse?
Hometrack predicts 12% drop in '09
The Telegraph: House prices to fall by 12 per cent next year, says Hometrack
Another dire prediction...
Hometrack: -8.7%YoY, -0.9%MoM
Reuters: House prices fall 8.7 percent in 2008
House prices will fall by 12% next year, wiping around £20,000 off the average value, it is claimed today. Research by industry analysts Hometrack records a fall of 8.7% this year and warns of a further drop in 2009, with profound effects on families and the wider economy. Consumer confidence will take a hammering from the fall in the 'bricks and mortar' wealth of the nation, which will bring lower spending on the High Street. This year's house sales will be down 45% compared with 2007, with worse expected over the next 12 months.
Gordon Brown
Guardian: Next year, Gordon Brown will be on another planet
I foresee a busy time ahead for all our political leaders. Especially the prime minister who, of course, will be saving the universe
Sunday, December 28, 2008
One for our occasional series on property prices
Telegraph: UK banks face £70bn property bombshell
A fall in commercial property prices could (ie will) lead to more loan writedowns for the banks
City traders bet on 46% drop in prices
independent Newspaper: Few signs of light in gloomy house market
Who can you trust in the next year on predictions for house prices? Certainly not those who have vested interest in them going up, stabilising or going down for that matte!. However, when people 'put their money where there mouth is', you should take notice. The Independent newspaper reports that the median average for city traders betting on housing derivatives is a 46% drop peak to trough. Whilst this may seem a staggering amount, this only takes us back to 2002 levels quarter 1/2 (as per the Nationwide price calculator). I remember having talks in 2002 when people thought the market was starting to bubble then, so this may not at all be an unrealistic scenario, given that we wouldn't have factored in the worst recession since the war and a credit crunch at the same time.
State of the Housing Market
BBC 4: Money Box 27/12/08
Too meny VI but worth to hear
Even the church recognises how Labour has ruined the country by creating the house price bubble
ITN News: Bishops slam 'morally corrupt' Government
Five senior figures from the Church of England warned that the country was suffering from an addiction to debt and a growing gap between rich and poor. Dr Rowan Williams said Gordon Brown's plans to spend more in order to tackle the recession were like an "addict returning to the drug". The Rt Rev Nigel McCulloch criticised Labour for encouraging people to get further into debt. "The Government has acted scandalously. This is not just an economic issue, but a moral one"
I have been waiting for this - read if you have a strong stomach
Guardian: Brown: we need Dunkirk spirit in 2009
A few quotes from Mr Brown; 'he and his government will be the "rock of stability" ', 'It will be my unwavering focus to make the right decisions', with 'the failure of British governments in previous downturns was to succumb to political expediency'. Somehow that fact that all this germinated and grew under his watch is lost on the man.
10, 9, 8, countdown begin
Times Online: Clothing chain Adams cut down by retail wipeout
THE retail crisis claimed another victim this weekend with childrenswear chain Adams, which has 260 stores in the UK and 116 overseas, poised to go into administration. Adams, which makes clothes for Boots as well as trading through its own outlets, employs about 2,000 staff. It is expected to appoint accountants Price Waterhouse Coopers as administrator this week.
David Smith is back
The Times: Chaos of 2008 causes havoc for predictions
What a horrible year that was. A full-blown credit crunch, of the kind I have never witnessed before, alongside a nasty commodity-price shock. Economists, unsurprisingly, found it a tough year to predict. That was partly because of the nature of the crunch itself. Things turned out gloomier than even the pessimists expected. Any economist getting it right during 2008 would have required mystical powers of prediction. A year ago, just about the gloomiest forecast for house prices you could find among economists was for a fall of 5% in 2008. Data from the main lenders, Halifax and Nationwide, point to a fall about three times that. I always argued that you needed a big economic shock to produce a fall in house prices, and I was right.
Saturday, December 27, 2008
Slowly the odds are stacking against BTL
the times online: Lenders tighten grip on buy-to-let
Britain’s biggest lenders are tightening their criteria on buy-to-let mortgages, depriving would-be investors of the chance to take advantage of plummeting prices and record-low interest rates. Nationwide-owned The Mortgage Works, the market-leading buy-to-lender, said this month it will refuse applications from “property developers” — cutting off thousands of landlords from remortgage deals next year.
A Story That Deserves Maximum Exposure
MailOnline: Council official evicted elderly tenants from bungalows... then moved in herself
As a council official with responsibility for helping the homeless, Kristine Reeves knows how much people value their homes. Which makes it difficult to explain how she came to play a key role in evicting frail and elderly tenants from their bungalows - then moved into one with her partner. The £52,000-a-year head of neighbourhood and strategic housing was just one of 18 council employees who took up residence in former sheltered accommodation at the Greyhound Opening site in Norwich. She also benefited from the rent at the one-bedroom bungalow she took over two months ago being reduced from £69 a week to £47. Similar properties in the area cost between £350 and £750 a month.
There´s just no more justice
Bloomberg: California Crisis May Crunch $3.8 Billion of Jobs in Slowdown
Just $5 million of work is needed to complete a new California Court of Appeals building in Santa Ana. The state may not have the money, and come July judges may be writing opinions in their living rooms.
got this from rightmove today
Rightmove: buy 75% own 100
more junk to try and get us to buy
Anne Ashworth flogging a dead horse
Times: Mortgage supply is key to continuing house price decline
I beg to disagree with Anne Ashworth. The prime cause of falling prices is that houses became massively overpriced compared to rents, earnings or any other yardstick you care to name. It will take BOTH improved mortgage availability AND realistic house prices compared to these measures before the fall abates. We are a long way away from the latter even after a cumulative 20% fall from the peak, and when I see the current predictions for a further 10% fall then a levelling-off, I think, "and the rest". Who in their right mind would want to take a highly leveraged position in a single large illiquid asset that is falling in value 1-2% a month?
Comedy at Christmas
TimesOnline: Mortgage supply is key to continuing house price decline
Homeowners who still have considerable equity in their properties can be relatively sanguine about the housing market’s weakness. For them, 2009 will be another year of staying put. For the more adventurous among this group, lower prices will be an opportunity to snap up, say, a second home in the South West, where values are 12.7 per cent down this year. Whatever location these buyers opt for, they will be eager to move before it is generally acknowledged that a recovery has set in. HAHAHAHA!!!!!
Here's a wild idea - attract savings deposits to fund lending instead of bailing borrowers
Independent: British banks may face second credit crunch in the New Year
The Governor of the Bank of England has said getting banks lending is the most important task for combating the recession and has not ruled out full nationalisation of the sector.
See the rewards that value for money can bring!
Scotsman: Mamma Mia, online retailer Amazon defies downturn
ONLINE retail heavyweight Amazon yesterday said that this year's festive season had been its "best ever," with some 6.3 million items ordered and 5.6 million units shipped during its peak day on 15 December.
Not at thease prices
this is money: House prices: Will your home sell in 2009?
House prices dived in 2008 as the property market had a terrible year, but will 2009 be any better? Each year This is Money's property editor Simon Lambert rounds up the major house price forecasts, takes a look back at who got the past year right and runs the rule over next year's suggestions.
2009 looks far gloomier
FT: Retailers braced for ‘horrible’ year
Islington is a special case. House prices in the north London borough have fallen more sharply than in most places, while many residents of its ritzier parts make their living in the City.
None of the banks provided specific answers
CBS: Where'd The Bailout Money Go? Shhhh, It's A Secret
It's something any bank would demand to know before handing out a loan: Where's the money going? "We've lent some of it. We've not lent some of it. We've not given any accounting of, 'Here's how we're doing it,'" said Thomas Kelly, a spokesman for JPMorgan Chase, which received $25 billion in emergency bailout money. "We have not disclosed that to the public. We're declining to."
Then again, they may not
Express: HOUSE PRICES MAY PICK UP NEXT YEAR SAY ESTATE AGENTS
The New Year promises a new dawn for property owners and first-time home buyers, according to estate agents. After a year of gloom for owners with values down by a fifth, 2009 is likely to be the year the recovery begins as interest rates are cut again and the fall in property prices levels out. Mr Bolton King, chairman of the National Association of Estate Agents, said that in some markets, the bounce back could be as dramatic as the fall.
Friday, December 26, 2008
Will the last agent out the door please turn off the light
Daily Telegraph: Estate agent numbers plunge
Armageddon days for everyone's favorite villains
Seasonal cheer
FT: Brick by brick, the market crumbled
It seems incredible that just 12 months ago experts were predicting that 2008 would bring house price growth of 5 per cent. Amid what now appears to be the worst housing slump for more than 50 years, lenders, brokers and agents say the severity of the decline in house prices has come as a surprise to everyone. The widely-held belief was that the economy would provide sufficient support to prevent a crash. The latest figures from Halifax and Nationwide record an annual average price fall of 17 per cent and 14 per cent respectively. House prices are experiencing their sharpest annual decline for 25 years. No location or sector has emerged unscathed.
Oops!
The Telegraph: Families turning to insurance fraud to beat credit crunch
Insurers have seen an 80 per cent increase since last year in the number of bogus household and vehicle claims, many of which are being made by middle-class families struggling to pay their bills. Typical scams include householders hiding their valuables and staging a burglary in an attempt to claim thousands of pounds in cash, or dropping their old television down the stairs so they can claim for a new flatscreen model.
UK economy to contract by 2.9% in 2009
BBC: Gloomy prediction for UK economy
The Centre for Economics and Business Research (CEBR) predicts the economy will shrink by 2.9% in 2009 - more than at any time since the 1940s.
Interesting; too light on the important stuff though.
BBC News: Who was to blame for UK slowdown?
"Blame it on the Yanks and the banks." That - according to Westminster watchers - was the way ministers were told to deal with questions about the economic crisis. Dodgy US mortgage lending led to a crisis of confidence in the global banking system and now a savage economic downturn in most highly developed countries.
We must refight the battles of the 1970s
Telegraph: We must refight the battles of the 1970s
We are facing a crisis as bad, if not worse, than that of the 1970s. The lights might not be going out and our dead are being buried, but don't be fooled. Our economy and most public institutions are, in Whitehall-speak, not fit for purpose. Unless Britain has a radical change of direction, prepare yourself for an era of decline.
Wednesday, December 24, 2008
Japan needs to start a "Marshall Plan" to aid America
Bloomberg: Japan Should Scrap U.S. Debt; Dollar May Plummet, Mikuni Says
"Japan should also invest in U.S. roads and bridges to support personal spending and secure demand for its goods as a global recession crimps trade, Mikuni said... Combining debt waivers with infrastructure spending would be similar to the Marshall Plan that helped Europe rebuild after the destruction of World War II, Mikuni said... Japan will also have to accept that a stronger yen is good for the country in order to reduce excessive trade surpluses and deficits, he said...The dollar may lose as much as 40 percent of its value to 50 yen or 60 yen from the current spot rate of 90.40 today in Tokyo unless Japan takes “drastic measures” to help bail out the U.S. economy, Mikuni said. "
Merry Christmas all
Santa Clause: Thank you for your advice, patience and brilliance
This is my fav Christmas song and video for you all youve heard it a million times before......may you all have a wonderful day. Lots of Love Titanic Captain and family..........
ERM anyone??
Bloomberg: Pound Falls Versus Euro After Report Says House Prices May Drop
“It’s a thin market and there are one or two players out there that are trying to chase this move to parity,” Yu said. .... perhaps a Mr G Brown and Mr Soros, and please stop telling me the fundamentals are all that is driving this devaluation. Its a case of driving the market down as far as possible for as high a personal gain as possible in as short a time as possible. It would be nice if HMG did something to protect the value of sterling.
Some Chrimbo Fun to Cheer Us Up
Daily Mash: IT'S A HORRIBLE LIFE
GORDON Brown sat on the railing of the old iron bridge that takes people in and out of the small town of Bedford Falls and stared at the freezing water.
Not in the UK, we have "sound fundamentals"
Bloomberg: U.S. Economy: Home Prices Fall Near Depression Pace
"Sales of single-family houses in the U.S. dropped in November by the most in two decades and resale prices collapsed at a pace reminiscent of the Great Depression, dashing speculation the market was close to a bottom. The figures were worse than economists had forecast and signal that the battered housing market that led the economy into a recession may be taking another lurch down".
City watchdog's fines at record
BBC: Quick, shut that stable door
"The City watchdog handed down fines of £22m in 2008 as it clamped down on cases of mortgage fraud and loan insurance mis-selling. The Financial Services Authority (FSA) issued a record 48 fines for breaches that also included pressure selling, pension transfers and market abuse. "
Bleed the World
the independant: Do they know it's Christmas in the City?
For a new take on the Feed the World charity appeal song, have a look at www.Bleedtheworld.com, with its appeal for cash for disadvantaged bankers. The chorus is great: "And there won't be City bonuses this Christmas time, the only thing they'll get this year is fired, no strippers or cocaine, just anger, hate and blame."
27% Drop to Date
guardian News Paper: House Prices to Fall by 10% in 2009
The article reports by BAA the actual average loan for a house purcahse during 2007 and November 2008, see below, which suggest a drop of 27% in price to date and not the numbers being reported by other sources. This is the most reliable figure I have seen so far In November, the average loan for a house purchase was £116,700 - a drop of almost £12,000 since October and well below the average of £159,600 last June, when the market was near its peak.
Financial district in east London STILL GROWING?
Reuters via yahoo: Canary Wharf to pay 150 million towards Crossrail
Canary Wharf Group (CWG) is to contribute 150 million pounds towards Crossrail, a rail line set to link Heathrow airport in west London with the still-growing financial district in east London CWG will design and build a Crossrail station near its office complex on the Isle of Dogs for a fixed price of 500 million pounds, its parent company Songbird Estates Plc said in a statement on Wednesday.
The lack of confidence is total," Miguel Angel Fernandez Ordonez said in an interview
Associated Free Press Yahoo: World faces "total" financial meltdown: Bank of Spain chef (seasonal quip)
"The inter-bank (lending) market is not functioning and this is generating vicious cycles: consumers are not consuming, businessmen are not taking on workers, investors are not investing and the banks are not lending.
The 2008 Property Industry Lamest Excuse Award goes to ...
Reuters: Mortgage approvals slump 61 percent
BBA statistics director David Dooks blamed part of the drop on banks and prospective home-buyers pausing to take stock after the Bank slashed interest rates by 1.5 percentage points in November.
Miracle Economy
Mail: Jobless total 'heading for record 3.5million'
The number of jobless will almost double to 3.5million over the next two years, a leading economist warns today. That would take unemployment to the highest-ever since official records began in 1971. Today's total of 1.86million is already an 11-year high. The prediction by the consultancy Capital Economics is a sign of the dire problems facing the economy over the next two years.
Gordon Brown's legacy
BBC NEWS: Spending Christmas without a home
"Homeless charities' Christmas campaigns are under way, amid fears the new year could see homelessness surge as people struggle to keep up with their mortgage payments." "Cat Wood's Salford home is immaculate. The tree is dressed and the presents are wrapped for Christmas." But once the decorations come down she and her nine-year-old daughter will be forced to move out. "There's so many empty houses that are available, yet I'm on the housing list and they just turned around and said I'm not guaranteed a house before February," she said.......I know alot of the article wont find much sympathy with many here but this woman's story is repeated all over the u.k.................and next year it will be worse.alot worse....
BREAKING NEWS New born Rabbit is more accurate at predicting housing market than RICS
BBC NEWS: House prices 'will fall further'
"House prices will probably fall by another 10% in the coming year, predicts the Royal Institution of Chartered Surveyors (Rics)."......ok add another 25% and I think they could be spot on............dont forget that RICS said that house prices would only fall 5% this year.........
Tuesday, December 23, 2008
California back to 2002 levels
Bloomberg: California home sales rise 82%, prices fall
House prices in California are now back to 2002 levels. They recorded a 42% drop last year! The reason why sales are up is because sales are being made on repossessed homes: The only market in town. According to Wikipedia if California were an independent economy it would be the 10th largest economy in the World. In the UK we are officially only back to July 2005 levels. Any ideas of how much further house prices would have to drop in the UK to be back to 2002 levels? Remember in 2003 Capital Economics were stating that house prices were 20% overvalued and that a crash was imminent! And the scary thing! House prices in California haven't stopped dropping. They are still crashing.
My patience is wearing thin
The Times: Bailiffs get power to use force on debtors
The government, which wants to crack down on people who evade debts, says the new powers would be overseen by a robust industry watchdog. However, the laws are being criticised as the latest erosion of the rights of the householder in his own home.
Cartoon Time for Gordon
The Times: Morten Morland has just won the Low Trophy for Cartoonist of the Year. It was awarded by the Political Cartoon Society
er emm oh, well * just take a look * more fun than Woolworths
Not quite as bearish as Capital Economics
This Is Money: 'House price fall will be 35% before a rise'
George Buckley, chief UK economist of Deutsche Bank, said the slump in prices that began last autumn had only run a third of its course. He warned the property market collapse still has two years to run and will not bottom out until prices are 35% below their peak. By the end of 2010 prices will be back to levels last seen in spring 2003, putting millions of owners into negative equity. His prediction is in contrast to some property market professionals who say that the market will bottom out next summer. Stuart Law of Assetz said prices would only fall 'modestly' in the first half of 2009, hitting bottom after the summer. But Marsh & Parsons estate agents said average completion prices in Kensington and Chelsea were already down 24% in sterling, or 42% in euro terms.
Ongoing downturn hammers new builds
mail online: Ongoing downturn hammers new builds
He has told the agent that he is still interested in buying six flats. But his maximum is half the asking price - an average £180,000 for the two-bedroom flats that were originally on offer for £360,000. Still the agent is saying no. But Geoff has been told that the property company is so desperate to offload its unsold apartments it will accept a discount of somewhere north of 40 per cent.
Another -35% prodiction yipee
this is money: House price fall 'will be 35% before rising'
The property market collapse still has two years to run and will not bottom out until prices are 35% below their peak, a leading City forecaster warned today.
"new home prices look almost certain to fall much further"
Mortgage Solutions: New-build prices to fall 40-45%: Capital Economics
Gloomy analyst Capital Economics has predicted the underlying value of new-build properties will experience a peak to trough fall of 40-45%, up to 10% more than the wider market. The firm highlighted that as house-builders’ operational survival directly depends on their ability to sell their properties, they may be more willing to drop property prices than existing homeowners will be. Capital Economics said it believed the credit squeeze has affected demand for new-build homes more than it has affected demand for second-hand homes as lending criteria have been particularly tightened for first-time buyers and buy-to-let investors, the two buyer groups who have the strongest preference for new properties.
Looks like time to turn up the HPI heat again
Evening Standard: Found: flats where prices are actually on the rise
This is the second article in this paper today ramping the market, obviously preparing for the widely expected New Year bounce, bloody great, just when vendors were beginning to see sense. Looks like we all have a little longer to wait before we can actually be allowed to buy an affordable property, especially in the gold paved capital.
Comedy club chief in festive spirit
Mortgage Solutions: Assetz forecasts mid-2009 bottom of the market
Assetz has published its 2009 housing market forecast, predicting house prices will continue to fall modestly in the first half of next year with the bottom of the market likely to begin forming after the summer. In a positive set of predictions, the firm suggested there will be substantial increases in property sales compared to figures for the second half of 2008, while interest base rates will continue falling into the early part of next year - to 1% at the January Monetary Policy Committee meeting and possibly to as low as 0% by spring 2009. The firm also predicted bank lending levels will increase in 2009 with a flurry of announcements from banks in the first three months of the year.
Another lamb to the slaughter
Evening Standard: How the credit crunch saved me £50k
I was shattered when my offer on a 2-bedroom Ladbroke Grove flat was rejected. Now, a year later, the property has sold for £50k less than I offered. It is clearly time to start ferreting for a property again. Last year I had no problem getting a mortgage for £250,000, despite my low income of £23,000. Now I have a deposit of £60k, and am looking at properties around £300,000. But on my income I can only borrow £130,000,which leaves a big deficit. I have cajoled my father into acting as a guarantor. My mortgage advisor recommends an interest only fixed-rate deal, with monthly payments of £1,000. My take-home pay is £1,463 but if I take in a lodger at £600 a month, my payments will be less than I am paying in rent. I can change to capital repayment when my situation changes - God willing!
Oil to surge in late 2009 onwards
Market Oracle: Crude Oil Price Deflation Most Oversold Since the Great Depression
Most financial commentators, even the well-known and respected ones, just don't get it. They don't understand what's happening in macro-conditions because they fail to accept the understanding that sentiment, as measured by speculator betting practices in the various options markets populating the landscape, is the single most important driver of prices in our mature fiat currency based financial markets
Pound falls as UK economy contracts
Financial Times: Pound falls as UK economy contracts
The pound came under further pressure on Tuesday as data showed the UK economy contracted by more than expected in the third quarter. Final figures from the Office for National Statistics showed UK gross domestic product shrank by 0.6 per cent in the three months to September. This was greater than the 0.5 per cent drop expected and the largest fall since the fourth quarter of 1990. Adding further pressure on sterling were figures showing mortgages approved for UK house purchases mortgage sank to just 17,773 in November from 20,767 in October, the lowest since the series started in 1997.
BBC - Mortgage lending 'shrinks again'
BBC: Mortgage lending 'shrinks again'
UK mortgage lending by the major banks has fallen sharply, with approvals for house purchases 60% lower than a year ago, figures show. The number of mortgage approvals for house purchases fell by 14% in November to a new low of 17,773, according to the British Bankers' Association (BBA). People remained worried about the effect of the slowing economy on their personal finances, the BBA said. As a result, the amount consumers are borrowing also remained subdued.
FT Alphaville - Great (British Pound) Expecations
FT Alphaville: Great (British Pound) Expecations
Is GBP oversold and ready to bounce back? - "A glimmer of light on the horizon for the Great British Krona — currently suffering from record lows on a trade-weighted basis? Bank of America seems to think so, at least relative to the USD... The 2-year swap rate differential suggests a GBP/USD rate closer to 1.60 than the current rate under 1.48" GBP may be oversold because there is still uncertainty about whether the BoE goes into Quantitative Easing or not.
HP's to fall 10% - A rather optimistic assessment from Daily Mail
Mail: House prices set to fall a further 10 per cent and 140,000 families 'will lose their homes'
''Around 140,000 families will be evicted from their homes over the next two years, a grim forecast warned yesterday. It predicts that 70,000 families will be evicted next year - and the same number will lose their homes in 2010. This means the number of repossessions will be close to the highest level recorded in Britain in a 24-month period. The forecast, from the property information firm Hometrack, also raises fears that the housing market meltdown will worsen next year. Its data shows prices have fallen 9 per cent this year, with a further 10 per cent fall expected in 2009. In 2010, they will drop a further 3 per cent.''
Monday, December 22, 2008
Throwing out tax money down the drain
MoneyWeek: When stimulus just stifles
Cut our taxes, don't bail out every failing company that bleats loud enough. The article doesn't suggest tax cuts, actually, but if the government is determined to rack up as much debt as possible, at least they could give te cash back to the people and companies that earned it in the first place! How about a tax holiday? Now THAT would create a bit of feel-good-factor! And it would reward work and those companies that are doing ok (i.e showing a profit). At the moment our marvellous rulers are rewarding failure, and those who borrowed recklessly. The argument against this is that people and companies might just use the cash to pay down debt, or save it. But surely need to reduce debt and get the savings ratio in this busted flush of an economy back up above its current Zero??
(Citywire) Gordon Brown and the emperor's new clothes
Citywire: Gordon Brown and the emperor's new clothes
Suddenly the ‘Saviour of The World’ is being criticised by his peers for indiscriminately throwing money (OUR MONEY) at a problem he doesn’t understand. Not another emperor without clothes! Perhaps he ought to take a leaf out of the book of one of the Roman emperors who used to have a chap standing behind him and who had to keep reminding said emperor that he was human.'A sound banker, alas, is not one who foresees danger and avoids it, but one who, when he is ruined, is ruined in a conventional way along with his fellows, so that no one can really blame him,' said economist John Maynard Keynes.
I've got loadsamoney!
Telegraph: Gordon Brown: I'll create extra 100,000 jobs
Government spending programmes brought forward to soften the effects of the economic crisis will provide at least 100,000 jobs, Gordon Brown said.
Just Some Merriment for the Festive Season
Daily Mash: Economy Not Our Strong Point Admits Bank of England
Ok, so I know I'm not renowned for posting sensible debatable topics relating to the current turbulence in the economy and housing market but I sometimes wonder just how 'on the ball' these Daily Mash folks are! ;o) Oh, and there is the small fact that I just like a good chortle every now and then.
When the dust settles Gordon Brown will face the music
FT Blog: The Brown bubble and Brown bust
Some interesting manipulation regarding the extent of Brown's boom and bust, followed by some interesting comments. A flurry of redundancy announcements in the New Year will see the resurgence of Brown bashing and rightly so IMHO.
Very Smart
Housepricecrash .co.uk: Newlook Website
I would just like to congratulate the webmasters on a great looking new site for 2009
So specultaing on currencies isn't a problem??
bloomberg: Bonuses of Currency Traders Fall Least on Wall Street
To everyone who has had a go at me whenever I have even hinted that the problems with sterling (and others) are due, in part, to traders driving it into the ground for personal gain, please explain these huge bonuses and why it is OK for these guys/ gals to make huge gains while the populations of the countries whose currencies is attacked should lose 30% of their purchasing power?? Happy Christmas everyone.
The death of capitalism?
Telegraph: Protectionist dominoes are beginning to tumble across the world
The riots have begun. Civil protest is breaking out in cities across Russia, China, and beyond. Greece has been in turmoil for 11 days. The mood seems to have turned "pre-insurrectionary" in parts of Athens - to borrow from the Marxist handbook. This is a foretaste of what the world may face as the "crisis of capitalism" starts to turn two hundred million lives upside down. We are advancing to the political stage of this global train wreck. Regimes are being tested. Those relying on perma-boom to mask a lack of legitimacy may resort to the usual methods: trade barriers, sabre-rattling, and barbed wire. This crisis has already brought us a monetary revolution as interest rates approach zero across the G10. It may overturn the "New World Order" as well, unless we move with great care.
The MPC stooges are the real culprits
Times: Bank failed to spot crisis despite 'crazy borrowing'
Sir John Gieve tells the BBC that the Bank was aware that a bubble was developing in the housing market, as well as in the price of other assets, and that it was being fuelled by “crazy borrowing”. Sir John also raised questions over whether taxpayers would get back all of the money the government has now invested in the banking sector.
Margin Call
This is Money: Repossession threat for couple who never missed a payment
A couple have been threatened with repossession even though they have never missed a payment on their mortgage. Peter and Marian Addyman say NatWest has given them a week to repay the £226,000 loan or face losing their home. They bought their home for £250,000 in 2004. Two years ago they took out a second mortgage for another £100,000 to consolidate their debts. They insist they were entirely open with NatWest about this. When their fixed rate deal with NatWest ran out at the beginning of this year, they took out an interest-only tracker at 0.04% above base rate. NatWest has written to them stating after 'reviewing' their arrangement it was withdrawing the mortgage. They had 30 days in which to secure a new loan or it would begin recovery action and inform credit rating agencies.
Bail-outs are bad news for investors
MoneyWeek: Bail-outs are bad news for investors
"...the longer we try to resist change, the longer this slump will go on. In the meantime, it will become ever harder for investors to work out where to put their money. When a company's success depends on political whim, rather than demand for its products, it's anyone's guess as to who will stand or fall."
Dear Bank of England, Resign. Yours Sincerely, The British People
Guardian: Financial crisis: Bank of England 'did not understand problem'
Explaining why the Bank did not raise interest rates to curb the lending and house price boom, Gieve says: "If we'd used interest rates to try and address this asset-price credit growth, we would have been holding down the level of activity elsewhere in the economy, in manufacturing, in other services, holding down the level of employment at a time when consumer price inflation and earnings were stable and reasonably low. And people would have said, you know, 'this is a wilful reduction in the prosperity of the country'."
Spreadsheet system for calculating whether you should buy or rent
ExcelExperts.com: Buy Or Rent Calculator
This is a calculator aimed at helping you to make the right financial decision on whether to buy or rent. It allows you to enter your personal circumstances, and assumptions on market price changes, and shows you how your wealth will change over time. FREE to download and use
MSN aren't afraid of making predictions
MSN UK: Property prices set to fall further in 2009
No good news for the property tycoons here. Half way through he is talking about a 2/3rd drop. His eventual conclusion is a mere 20% drop. The original link to this article is straight from the MSN home page (which is the default for Internet Explorer), so I would expect quite a few people to see it
The government failed to heed the warnings so this recession could now last 10 years
Telegraph: Japan plans record spending to prevent slump
"This could be the start of a global version of the 'lost decade' that Japan endured in the 1990s," said Professor Hama. "It took us 10 years to recover after our bubble burst and it looks to me as if that 10-year timeline is a benchmark for these crises."
Back to 3.5x earnings says L&G
Telegraph: UK house prices won't recover for a decade
"It will be at least 10 years before we see prices return to their 2007 peak levels," he said. LGIM, part of the insurance giant Legal & General, has been remarkably accurate with other economic predictions in the past year. and best of all "...Mr Drayson: "Banks will not price off affordability in future. It has been a mistake of the last several years to price off interest rates, which can move monthly. They are more likely to return to more cautious income multiples." ....." "...the market will only recover as incomes rise..."
Criticism will lose you your job!
Telegraph: ArchB of Canterbury warns Britain must learn lessons from Nazi Germany
Dr Rowan Williams risks causing a new controversy by inviting a comparison between Gordon Brown's response to the economic downturn and the Third Reich. Williams later quotes Marx. He then denounced Mr Brown's plans to increase debt, saying: "I worry about that because it seems a little bit like the addict returning to the drug.
Tough new year predicted
independent.co.uk: Britain's job 'bloodbath'
''Cabinet minister issues stark warning of carnage for private and public sectors as employers delay huge redundancies until the new year. Britain faces an unemployment "bloodbath" in the new year with many tens of thousands of jobs axed in the public and private sectors, according to a cabinet minister. ''
Bank failed to spot elephant in room
BBC: Bank 'did not understand crisis'
"The Bank of England did not understand the severity of economic problems before the current financial crisis, its deputy governor says. Sir John Gieve told the BBC that the Bank knew "crazy borrowing" was taking place and the price of houses and other assets was rising unsustainably. But the Bank thought this problem was less serious than it turned out to be, he said in an interview for Panorama. The Bank relies too much on interest rates to control the economy, he added."
Payment times cut to keep contractors solvent
times: Race to save Olympic firms from crash
Race to save Olympic firms from crash Olympic chiefs are being forced to cut payment times to contractors to avoid small businesses supplying the project going bust.
Demand over supply......ha ha
BBC News: UK 'must act' to fill empty homes
"Government action is needed to free up more than 750,000 empty houses for homeless people, says the Royal Institution of Chartered Surveyors.".......we need to bulid more houses
“The more houses built the more walls that needed our paintings.crash of Western property market
nytimes: China to the Rescue? Not! devastated by the bursting of the U.S. housing bubble
“American property owners and hotels were usually the biggest consumers of Dafen’s works,” Zhou Xiaohong, deputy head of the Art Industry Association of Dafen, told Hong Kong’s Sunday Morning Post. “The more houses built in the United States, the more walls that needed our paintings. Now our business has frozen following the crash of the Western property market.” In China, for instance, to buy a home you have to put at least 20 percent down, and the average is 40 percent. If you try to walk away from the mortgage, the bank will come after your personal assets. Moreover, China can’t just shift production from the U.S. market to its own consumers.
Loadsamoney!!!
Daily Express: WHAT RECESSION? £6.4BN BONUSES FOR CITY BANKERS
BANKERS at four City firms have collected bonuses of more than £6.4billion this year, despite the worst financial crisis since 1929, it emerged yesterday. While the rest of the country struggles under the ravages of the recession, London-based traders at Goldman Sachs, Morgan Stanley, Merrill Lynch and Dresdner Kleinwort have been notified of their bumper payouts. They come despite the banks having reported a dramatic fall in profits and the Government bail-out of the banking sector.
After 30 Years, Economic Perils on China’s Path
nytimes: Global demand for Chinese goods has slumped, unrest is on the rise in the industrial heartland, and China is scrambling for a new formula to preserve stability and ensure growth.
The downturn is so swift — exports fell last month for the first time in seven years — that Beijing is being forced to abruptly shift priorities. Until recently, Mr. Hu had been trying to curb excesses like rampant pollution and income inequality that posed environmental and social challenges to long-term development. Now, those priorities seem eclipsed.
The surge in bankruptcies and layoffs has led to an increase in labor arbitration cases in Guangzhou
wsj: China Faces Unrest as Economy Falters
As China's economy stalls, rising public unrest has bubbled up in a series of labor strikes across the country. In an unusual response, authorities -- facing a delicate task in tamping down disquiet -- have been allowing the protests and staging high-profile meetings with strike leaders to talk over concessions.
Millions v billions
FT: Tata agrees to cash boost for Jaguar
Mandelson has appointed KPMG, the accountancy firm, and NM Rothschild, the investment bank, to advise him on the Indian group’s complex finances.
Sunday, December 21, 2008
TV Anthea's court short
the sun: TV Anthea's court short
CREDIT crunch victim Anthea Turner was reeling last night after losing her fight to keep a £500,000 tennis court built without permission.
Selected quotes
Telegraph: Germany is already collapsing
The German economy is on the "brink of the abyss". We are reaching depression levels here. This is an industrial melt-down.
How to lose all your friends - sell them a BTL...
Sunday Times: Buy-to-let scandal spreads nationwide
"They were so impressed by its apparent professionalism that not only did they engage to buy seven properties over the next few months but Geoff Morris, 62, agreed to become an agent for the company. On top of his investments, he was an agent on the sale of 15 properties and was looking at a paper profit of £50,000 in commission. The scheme looked so attractive he gave up his job as a salesman for a software firm to concentrate on the venture. He even persuaded his two children and four family friends to invest in it." And now he's lost all his money and presumably his friends, like the rest of them, he is trying to blame someone else...
LIBOR Set to explode
Bloomberg: Libor Risks ‘Re-Explosion’ Within 6 Months, ING Says
The London interbank offered rate, or Libor, may suffer a “re-explosion” by June should the financial crisis worsen. If this happens then armageddon is upon us.
HPC.co.uk having an impact -- Times picks up on topic debated here last week
Times: Council pays out £90,000 a year in rent to mother of four
Article looking into Local Housing Allowance, which pays landlords up to 100,000 pounds a year in central London to house families on benefits.
Outlook for house prices is getting darker by the day
Telegraph.co.uk: IMF head warns of UK's 'disturbing' debt
The IMF chief told BBC Radio 4's World This Weekend: "I'm specially concerned by the fact that our forecast, already very dark... will be even darker if not enough fiscal stimulus is implemented."
World Socialists article discussing the UK's brushed under the carpet Pension Crisis
WSWS: Britain: Financial crisis threatens pensions and retirement plans
A little discussed aspect of the global financial crisis is the devastating impact it is having on pensions. This is particularly acute in Britain. State provision is poor and successive governments have forced workers to rely on occupational pensions, on which half of all British workers depend, private pensions and annuities, and the value of their homes to finance their retirement.
Never mind the b*****ks, bring in the Garda?
Independent.i.e.: Don't
Gene Kerrigan gives incredibly short shrift to the Irish government's plans to bail out the banks, specifically Anglo Irish and ex boss "gobsh1te" Sean FitzPatrick. I can't see Robert Peston being this direct......
French ex-pats not doing any better than the Spanish
Guardian: Britons who fled in search of French idyll feel the pain of the pound's fall
The expatriate community has become the latest casualty of recession, with a ruinous exchange rate biting into the rural idylls of the French countryside just as it has in the "Little England" retirement enclaves of Spain and Portugal. "Cheaper" France is vanishing as the pound slips closer to the rising euro, raising food, wine and energy costs, while devaluing the incomes of those getting wages or pensions from the UK. "We're all doomed," said Linda Norton, who lives near Cherbourg in Normandy. "If we can't grow it, we won't be eating it next year."
HPC.co.uk makes The Times!
The Times: Website homes in on the crash
FOUND, at last – a property business that has had a successful 2008. It’s name? Housepricecrash.co.uk. When 25-year-old Brendan McLoughlin bought the obscure website three years ago the only visitors were a few doomsayers warning that the end was nigh for the house-price boom. Now, as property values nosedive, the controversial news and discussion website is attracting 50,000 hits a day and revenue of more than £300,000 from advertisers including Sky, Virgin and BT.
Its That Time of Year!
Telegraph: Spenderella: A pantomime for serious times
The cast: Spenderella: a former City high-flyer, now fallen on hard times. Baron Hardup; her father, a depressed estate agent ...plus all your favourites...
US mortgage rates falling, HP dead-cat bounce coming IMO
John Mauldin via Market Oracle: Fed Targeting Long-term Interest Rates to Force Mortgage Rates Lower
John Mauldin "Letters" are always a good read. The relevant part to this is half-way down "Some Good News for Borrowers". "Remember that ARMs (Adjustable Rate Mortgage) reset problem I was writing about late last year? Resetting the rates has been a problem up until now. However, that may no longer be a problem in the near future. The large majority of ARMs are linked to either 1-year LIBOR or 1-year Treasuries. 1-year Treasuries are 0.39%, and 1-year LIBOR is 2.09. Both were at 4.5% in 2006. Those going to reset in the near future are actually going to catch a break and see their payments go lower! Mish Shedlock writes that he has an interest-only mortgage tied to 1-month LIBOR, and his annual rate is going to drop to 1.75%" - [Fixing the ARM reset problem would be very significant]
Its all going wrong for the housing market
TimesOnline: The party's over if deflation grips the economy
The most recent guide to what deflation might mean for UK investors is to look at what happened in Japan in the 1990s, writes Mark Atherton. When Japan's property and stock market bubble burst with a vengeance in the early 1990s, the country experienced a prolonged period of deflation.
Are we on HPC fascists ?
David Smith Economics Blog: Transmission mechanism stuck in reverse
David Smith and HPC statements are diametrically opposite. Here on HPC we would like to see an end to reckless borrowing and asset prices return to sensible 3.5 x earnings levels. David Smith would like to see reckless lending and unsustainable asset prices here to stay....
Buyers' Strike Leads To New Savills Alert
sunday express: Original News Article Title
Upmarket estate agent Savills yesterday sounded its second profits warning in two months after a buyers’ strike, triggered by the turmoil in financial markets and recession, escalated.
Change the C to an R to make Ireland
Times Online: Banks to get €7bn lifeline
So much for the celtic tiger.
Something is rotten....
FT: Hedge funds gain access to $200bn Fed aid
Hedge funds will be allowed to borrow from the Federal Reserve for the first time under a landmark $200bn programme intended to support consumer credit.
Saturday, December 20, 2008
!!
Telegraph: Lord Mandelson's spokesmen are curiously silent about Jaguar boss Ratan Tata
As Lord Mandelson decides whether to give taxpayers' money to Jaguar Land Rover, the tycoon who bought the firm with a £2 billion bridging loan will no doubt hope that their personal rapport proves decisive.
!
Times: Taxpayers to stump up Jaguar loan
The SMMT has asked the government to stimulate demand by making cheap loans available to carmakers’ finance arms. “What is really killing demand at the moment is that nobody can borrow money to buy a car – the loan companies are simply not interested in doing business because they can’t get the funding themselves,” the chief executive said. Senior motor-industry sources said yesterday that an outline loan proposal from the government was sent to Tata, headed by Ratan Tata, in recent days, and that a decision to proceed could be reached shortly
Buy-to-tragedy
Times: Buy-to-let scandal spreads nationwide
Part II of the post below. "more than 1m other British investors". "They were so impressed by its apparent professionalism that not only did they engage to buy seven properties over the next few months but Geoff Morris, 62, agreed to become an agent for the company. On top of his investments, he was an agent on the sale of 15 properties and was looking at a paper profit of £50,000 in commission" Tulips anyone??
Aw diddums
Times: Buy-to-Let fraud hits millions
Detectives are investigating one of Britain’s biggest buy-to-let schemes in which large numbers of investors have seen their savings wiped out. The Serious Fraud Office (SFO) is investigating alleged scams that have cost banks such as Northern Rock millions of pounds on loans that should never have been made. At the centre of one of the biggest investigations is Morris Properties. Morris lured investors with promises of substantial discounts on properties that were overvalued, and rental figures that were widely overestimated. Investors, drawn in by the mirage of ever-increasing house prices, were easy prey. With property prices now falling in some areas by as much as 50%, many of those investors are facing ruin.
Knowing when to keep your mouth shut
Guardian: Lenders ditch house price predictions
Volatility is the excuse for abandoning their forecasts, but is it because they cannot bear to predict big falls, or that they are always wrong anyway?
Suprise, suprise. They know how dire it is going to be in 2009 & 2010
Telegraph.co.uk: Halifax and Nationwide decide not to publish annual house price forecasts
Halifax and Nationwide publish house price surveys every month, which both lenders said they would continue to provide. But neither is going ahead with their annual predictions for next year.
Set Your Video
Panorama: The year Britain's bubble burst
The last 12 months have seen house prices tumble and repossessions rise, with banks needing billion-pound bailouts. Such has been the speed of the economic crisis that the notion of the credit crunch has been replaced by the very real prospect of a recession. Throughout this period the country has looked to one man to keep them up to date on what is going on - the BBC's business editor Robert Peston. Now, in The year Britain's bubble burst, Robert looks back across the twists and turns of the past 12 months to tell the untold story of the crisis and just how close we came to financial meltdown.
The truth of how bad things will get is slowly eaking out
Google.com.hostednews: Global economy seen sinking into 'severe' 2009 recession: report
Charles Dallara, managing director of the IIF -- which represents more than 375 of the world's major banks and financial institutions -- called it "the most severe, globally synchronised recession in modern economic history".
Out of control
MailOnline: Darling's last roll of the dice and the spectre of wheelbarrows of banknotes
This week it became clear that both Alistair Darling and Gordon Brown are beginning to lose control of the British economy. Their attempt to end the crisis by bailing out the banks with £37 billion of taxpayers’ money in October has failed. Official quarterly unemployment figures have recorded their biggest leap since 1991, and the number looks set to rise well beyond three million
Predicting next years bounce
Which Elliott 4th Wave Are We In Currently?: afraidtotrade.com
One for Techieman. "There’s a rather large debate currently brewing among Ellioticians regarding exactly which Elliott 4th Wave we are experiencing - though there’s widespread agreement we are in a 4th Wave Counter-rally. Let’s look briefly at both sides of the argument, and what it might mean for the near future."
There is no doubt house prices are crashing
Theage.com: Golden Gate to nowhere
Home prices in the San Francisco Bay Area in the United States plunged a record 44% in November and the median fell to the lowest since September 2000 as foreclosure sales pushed down values
As soon as house prices have dropped
BBC: 'No recovery soon' in bank credit
"As soon as asset prices stabilise, then we will see the financial economy recover. And when will that occur? That will occur some time over the course of the next 18 months," Why not just say 'when house prices have dropped' - it would get the message out to the sheeple more effectively.
Good to see Housepricecrash in there
Times Online: Ten people who preducted the Financial Meltdown
Just found the link to this from the previous post. Nine other people there with some common sense as well.
House prices predicted to fall further
Times: Ten amazing statistics from the credit crunch
See stats #5: "... the Centre for Economics and Business Research (CEBR) ..... predicts that average prices will fall by 25 per cent and not return to their peak until 2013. The average home in the UK, which hit £200,000 in August 2007, will fall to £149,000 by 2009 .... Capital Economics, the consultancy, has said that prices could fall by 35 per cent..."
I'm starting to feel rather sorry for these people
Daily Mail: End of the Eldorado dream: A plunging pound and property crash have left thousands of expat Britons on the breadline
All along the coast, from Alicante on the Costa Blanca to Marbella on the Costa del Sol, a very middle-class dream is crumbling. The aim was to escape a life in Britain where crime was rampant, the weather miserable and the cost of living high. Now, in Spain, a legion of pensioners finds itself trapped by rising prices, a property market that has completely collapsed and a pound that has fallen almost 20 per cent against the euro.
"half a million are relying solely on rising property values"
Guardian: Pay-back times for the interest-only mortgage
Next year could be a challenging one for many thousands of people with "interest-only" mortgages. Research by friendly society Liverpool Victoria shows that more than half a million have no specified investment vehicle in place to pay back the loan, and are relying solely on rising property values and cashing in equity to see them through. But for some, this strategy may have been derailed by current and predicted future falls in house prices. Anyone relying solely on an increase in the value of their property to repay their mortgage is taking a risk. Even over the long-term, when it is reasonable to assume house prices will go up sufficiently, this strategy always commits you to trading down price-wise in later life to make it work.
Sign of things to come? Part 2
Daily Mail online: Exclusive homeowners will find they paid up to £1m too much for their houses, says Knight Frank
"One in four homes will be worth less than their owners paid for them when the market reaches the bottom next year, research revealed today. The worst hit, those who bought exclusive homes in the South, will find they paid up to £1 million too much for their homes. Liam Bailey, head of residential research, warned the 'peak to trough' house price fall will be 30 per cent.... Mr Bailey said he expects the trough to be in "the second half of next year", but he warned that his forecast may be far too optimistic". Lets hope so. Maybe Knight Frank's predictions can take over from Halifax and Nationwide.
World in shock as Gordon Brown actually does something right!!
The Times: Gordon Brown ignores CBI's call for help for British car manufacturers
"Gordon Brown ignored renewed calls from business leaders to save the car industry yesterday, just as America’s ailing automotive giants were offered a $17.4 billion (£11.6 billion) bailout"..............at last some sense
Worth a look
BBC NEWS: Peston: The New Capitalism, Part 2
What do you lot think of this?
Grandson, can you spare me £32,000 ?
Telegraph: The biggest Ponzi scheme: Bernard Madoff's or the British Government's?
Public sector gold-plated pension schemes are either inadequately funded or completely unfunded – that is, having insufficient or no money set aside to pay pensions in future – children who have not yet been born will have to pay more tax decades hence to deliver promises already made to people on the public payroll now. Just as Bernard Madoff is alleged to have relied on payments in from new investors to pay out returns and promote a $50 billion (£33 billion) fund that scarcely existed, our Government continues to issue promises which it hopes future generations will honour. If the whole bill for public sector pension rights already accrued fell on today's taxpayers, it would amount to £32,000 per person.
Friday, December 19, 2008
How well-endowed are you?
Telegraph: Endowment mortgages: Red alert for policyholders
Tens of thousands more mortgage endowment policyholders will soon discover that their policy is no longer on target to pay off their home loan. Standard Life, which has more than 800,000 policyholders, said it expected the number of maturing policies that will be insufficient to repay the mortgage to increase in 2009 because of poor investment conditions. [An endowment mortgage is one where, instead of making monthly interest payments, you invest monthly into the stockmarket. After 25 years the returns from the stockmarket should be enough to pay off your mortgage. Except when there's a massive stockmarket crash, in which case you land in negative equity....]
Imported inflation here we come
Reuters: Brown says targets inflation, not sterling
Prime Minister Gordon Brown stated today that the country's economic policy was aimed solely at targeting inflation rather than the level of sterling and added that "The day to day movements of the currency and of the pound are not something I think is worth give a running commentary on".
Why didn't Gordon think of this to pay our pensioners!
BBC: Worthless assets used for bonuses
About 2,000 investment bankers will have their payouts linked to assets with a notional value of 5bn Swiss francs ($4.6bn; £3.1bn). The leveraged loans and debt based on commercial mortgages in the fund currently have little market value.
Quantitative easing - don't be fooled by the marketing hype
FT.com: Quantitative easing: Lessons from Japan
One of the lessons of this episode for policymakers is that while quantitative easing may help to solve the short-run liquidity problems that arise in times of extreme financial duress, it is not a substitute for some of the harder choices governments must make.
Trapped
USAtoday.com: Owners find themselves trapped underwater
It's a problem that's only expected to get worse for legions of homeowners across the USA. Nearly one in seven homeowners is underwater, owing more on their mortgages than their homes are worth. That's about 12 million homeowners, nearly double the number underwater at the end of 2007, according to Moody's Economy.com.
Celtic Tiger? Yeah, right. put out of its misery
FT: Anglo Irish chiefs quit in loans scandal
David Drumm, chief executive of Anglo Irish Bank, followed chairman Sean FitzPatrick out of the door on Friday, leaving the lender’s senior ranks severely depleted in the wake of a loans scandal. Shares in the bank lost more than one-fifth of their value after the resignations, which came after the revelation that Mr FitzPatrick had temporarily transferred loans to the Irish Nationwide Building Society prior to the group’s year-end over an eight-year period.
Thanks Gordon
Telegraph: Sterling slide is worst since 1931
The fall is sharper than the devaluations in 1992, after leaving the Exchange Rate Mechanism, 1976, when the International Monetary Fund was forced to intervene, and 1949, when a host of countries slumped against the dollar. The devaluation is only matched by the moment in 1931 when, under Ramsay MacDonald, the UK was forced to abandon the gold standard, plunging by more than 24pc against the dollar.
I guess you wouldn't have to worry about the chocolate cereal bar crunch thing if you got lucky!
Timesonline: Spanish rush for £2.1 billion 'Fat One' lottery
Encarnacion Ramirez spent half an hour queuing on a freezing morning before she got her chance to buy a ticket for Spain’s biggest lottery, El Gordo (The Fat One). “I arrived early because they said people have been queuing up for two hours,” said the housewife from Madrid. As Spain gears up for its traditional bid to win one of the biggest lottery jackpots in the world – with €2.3 billion (£2.1 billion) in prizes - the same scene is being repeated across the country.
Sarah says buy, what are these 'experts' worth?
Channel 4 News: Sarah Beeny, House Price Crash
Should I Buy Now? Sarah says: ‘Yes, definitely. If you’re looking to move house and if it’s the right time in your life to move on, you should go for it. If you need a bigger home or need to downsize, move now.’ ‘Life just isn’t long enough to be hanging around five or 10 years waiting for the property market to recover. Although, of course, you must make sure you can afford the mortgage repayments.’
Anyone else need some dosh? We've got plenty!
CNC: GM and Chrysler to Receive Up to $17.4 Billion in Loans
General Motors and Chrysler will receive up to $17.4 billion in short-term loans from the US government as part of an aid package to the troubled auto industry. President Bush announced the agreement at the White House. CNBC.com Big 3 Bailout -------------------------------------------------------------------------------- According to details of the plan made availabl;e to CNBC.com. the package involves $13.4 billion in short-term financing from the TARP, with an additional $4 billion available in February—contingent upon drawing down the second tranche of TARP funds.
Spring it is then!
Telegraph: A local take on house price predictions
Im not sure what I feel about this article, I would like to think that with a fair wind Winkworths have it right and that we are nearing the bottom. The sooner we do the better, then maybe I will start to earn some money on my savings again and perhaps my son (43) will move out of his single bedroom and take the plunge with the savings he has put by since waiting for this crash in the ninties. Living with his parents has'nt done much for either of our love lives, better not say to much as he is on this site all day every day!!
Thants all it takes, "a can do attitude." Just like we talked ourselves into a recession!
BBC News: Brown promises 'can-do attitude'
Gordon Brown has said a "can-do attitude" will help the British economy get through the current downturn and prepare for future recovery. In his final press conference of 2008, Mr Brown said he regretted the fact that the UK had not been "unaffected" by the global downturn.
Nationwide and Halifax refuse to make house price forecasts for 2009
BBC News: Lenders axe house price forecast
I guess they believe fear is going to be dribing the market and that predictions of further big falls may become a self-fulfilling prophecy, undermining the confidence of potential buyers who might be afraid of a fall in the value of their homes.
Why Britain is a raging ‘sell’
MoneyWeek: Why Britain is a raging ‘sell’
Savers in Britain are already suffering. Their stocks have been smashed, their bank interest is being slashed, and they can’t even afford to go abroad to get away from it all. But when investors from abroad finally pull the plug, we really are sunk.
A research group says 344 hedge funds were liquidated in the third quarter - a significant increase
CNN: Hedge fund graveyard: 693 and counting
A record number of hedge funds went bust during the third quarter, a report showed Thursday, as shaky markets and tight credit drove investors away from risky investments. Hedge Fund Research, a Chicago-based information company, said the number of hedge funds liquidated in the third quarter rose to 344, which is more than three times the 105 liquidations in the third quarter of 2007. It's also 77 more than the previous record of 267 liquidations in the fourth quarter of 2006.
is superdrug the next woolies?
Daily Mail: Superdrug leads discount war with sale cuts of 90 per cent
Extreme sale discounts look set to sweep stores as Superdrug today announced it will slash prices by up to 90 per cent from Boxing Day.
Utter Bs
bbc: UK consumer confidence 'improves'
people are only buying for xmas, wait until jan then what maxed out cards, no money, no job, full blown recession..........
Who said rents would rise in a HPC?
Evening Standard: Rents falling faster than house prices as sellers turn landlord
RENTS have plummeted even faster than house prices in central London, a survey shows today. Three- and four-bedroom homes - until recently seen as the safest bet in the market - have been hit particularly hard because of the glut of properties available, as thousands of would-be sellers become "forced landlords" because they cannot find buyers. Houses that would have fetched £1,000 a week are now only making £750 to £800, according to agents.
Optimistism from Winkworths - if you are a foreign buyer
Findaproperty: Winkworth's Property Predictions For 2009
"Coupled with this, as interest rates fall and Government borrowing increases, sterling will fall, making already low property prices even more attractive to overseas buyers."........"Secondly, confidence is creeping back as buyers realise that they can get a property 2 per cent cheaper than summer 2007, and at these prices, the future effects of the recession are already 'priced in' to the market.".....Ian Fraser, Franchisee at Winkworth in Islington. Now how will they buy if their own economies are tanking????.....and I hope that is a typo!!!!!!!!!!.......and "already 'priced-in', interesting idea, in the same way that BoE rate cuts are 'already 'priced-in' to the exchange rate!!!!!!!????..'cos that's stopped the fall.
AUSTRALIAN households have lost a quarter of their wealth since the global financial crisis began la
smh: Household wealth crashes
Business confidence fell to its lowest level since the 1990 recession. "We believe there is enough information available which points to the need for further interest rate reductions," said the chamber's Greg Evans.
Russia's oil-fired economic miracle is unraveling as industry shrinks and job losses mount. Now the
wsj: Oil's Crash Stirs Unrest in Russia as Slump Hits Home
Gloom deepened over the outlook for oil-export revenue, Russia's main earner, as prices plunged Thursday despite OPEC's move this week to deeply cut production. Oil hit a 4½ year low on anxiety about falling global demand, with crude closing at $36.22 a barrel in New York, down $3.84. This could spell trouble for Russia, which has pegged its 2009 budget on much higher oil prices, meaning it will have to trim spending.
The world economy will contract next year for the first time in almost half a century, according to
bloomberg: “The GE downgrade is another sign the world economy is in big trouble,” said Joe Capurso, a currency strategist in Sydney at Commonwealth Bank of Australia Ltd. “For a small, open economy like Australia, our fortunes are tied to what happens overseas.
The Australian and New Zealand dollars dropped as equities fell after General Electric Co’s debt-rating outlook was changed to negative, prompting investors to shun higher-yielding assets
Moral outrage hits the masses
Daily Express: Banks punish savers
Banks are today accused of penalising careful savers by slashing interest rates by up to 4 per cent. They are using Bank of England rate cuts as a “smokescreen” to chop the interest on savings accounts, said one critic. Retired people who rely on savings growth to top up their pensions are suffering as a result. Some 76 banks and building societies have slashed interest rates on 150 savings products since the start of December. Critics say the banks are hurting pensioners who have worked hard to build up retirement nest eggs. They fear that low savings rates will discourage younger people from putting money aside for a rainy day. 
And yet they just keep on spending
Telegraph: UK public finances slump to worst state in 15 years as borrowing soars
The Government borrowed £16bn in November, the most since records began 15 years ago, underlining the dire state of the public finances as the economy enters recession. The figure was higher than economists had expected and took borrowing in the first eight months of the year to £56.1bn - almost DOUBLE the level at the same time last year. The November figures do not even take into account the £20bn fiscal stimulus package announced by the Chancellor Alistair Darling at the pre-Budget report last month. The VAT cut, which will cost the Government an estimated £12.4bn, was not introduced until December.
"A toxic mix of high debt and deflation. An economy can handle one at a time, but not both."
Telegraph: Federal Reserve is damned either way as it battles debt and deflation
Lombard Street Research have come up with some disturbing figures. US household debt is now $13.9 trillion, down just 1pc from its peak last year. Meanwhile household wealth has fallen 14pc as property crashes, a loss of $6.67 trillion. The debt-to-wealth ratio is rocketing. The obvious conclusion is that the Fed should print money to purchase private sector assets so as to drive up their price. Put bluntly, the Fed is deliberately stoking inflation. At some point it will succeed. Then the risk flips quickly to spiralling inflation as the elastic snaps back. There will be a second point of danger: the bond markets could go into free fall. The Fed is flying by the seat of its pants. It should never have let debt grow to such grotesque levels in the first place.
Cutting back spending is easy - cutting back gas usage is harder
The Oil Drum: Will the UK Face a Natural Gas Crisis this Winter?
"In recent years, the UK has become increasingly dependent on natural gas as its primary energy source. This strategy may soon be found to be based upon poor assumptions/perceptions regarding development of domestic and neighbouring natural gas reserves and, in general, regional and global supply capabilities. Here, I present the results of simulations of the UK natural gas supply and demand situation for the remainder of this heating season. The results of these simulations are quite alarming: it appears that there is a significant chance that the UK will run short of natural gas in storage before the end of winter."
Dog-house price crash
Times: Seasonal stray-dog crisis comes early as families abandon pets to save cash
Dog charities have reported an unprecedented number of stray animals after the credit crunch, with families forsaking their pets to save money. Battersea Dogs & Cats Home announced yesterday that it had almost reached capacity – for the first time – because of the high number of strays and lost animals being brought in. The Dogs Trust, the country’s largest dog welfare charity, told The Times that it was experiencing a similar trend.
Hedge fund blow-ups hit record levels as firms pushed to the brink
telegraph: Hedge funds are closing down in record numbers as disastrous returns and heavy investor redemptions continue to savage the high-rolling sector.
Liquidations in the third quarter of 2008 soared by 70pc compared to the same period last year, according to the latest figures from Chicago-based Hedge Fund Research.
Thursday, December 18, 2008
The 130+ comments are an equally good read
guardian.co.uk: Why such drastic action? The Fed is utterly petrified
When the global financial system seized up in August of 2007, we said there was a risk of an economic pandemic that might plunge the world's economy into a dangerous tailspin. This was greeted with derision. The system was robust, we were told. Economies were well-placed to withstand any problems, we were told. The problem would be contained because policymakers had matters in hand, we were assured. All of which goes to show that Schopenhauer was bang on the money when he said that truth goes through three stages. In the first stage, it is ridiculed. In the second stage, it is violently opposed. And in the third stage, which of course is where we are now, it is accepted as self-evident.
Sub Prime mortgage fiasco (part 2)
Bloomberg: Fed Loans Guided by Raters Grading Subprime Debt AAA
Federal Reserve Chairman Ben S. Bernanke is basing hundreds of billions in emergency lending on credit ratings from companies that gave AAA grades to toxic securities. The Fed has purchased $308.5 billion in commercial paper and lent $631.8 billion under eight credit programs, most of which require appraisals of short-term debt and loan collateral by “major nationally recognized statistical ratings organizations.” That, in effect, means Moody’s Investors Service, Standard & Poor’s and Fitch Ratings. It is foolhardy to rely on the three New York-based companies, said Keith Allman, chief executive officer of Enstruct Corp.
About a boy shot by police? Or breakdown of order in a country with a crumbling economy?
BBC News: New clashes break out in Greece
The headlines cite the police shooting, but the below article by a commentator in Greece paints a picture of social breakdown, with the proleariat ignoring laws, and looting shops and banks. Coming to a city near you? http://news.bbc.co.uk/1/hi/world/europe/7774304.stm
No way out - the crash is well under way
TimesOnline: Lenders fail to pass on cheaper borrowing costs
Mortgage experts accused lenders of boosting profit margins at the expense of borrowers who are struggling to find competitive deals amidst a chronic mortgage drought. The total number of mortgages on the market has fallen by almost three-quarters since the beginning of the year.
A bonus according to merit!
BBC News: Worthless assets used for bonuses
Credit Suisse is introducing a new bonus system based on the illiquid assets that were at the heart of the credit crunch. About 2,000 investment bankers will have their payouts linked to assets with a notional value of 5bn Swiss francs ($4.6bn; £3.1bn). The leveraged loans and debt based on commercial mortgages in the fund currently have little market value. The idea is if they develop value in coming years the bankers will get paid.
Savings shafted!!!!
Timesonline: Sterling hits new low of 95p against the euro
"Of course it's not good news for our UK friends but why don't you join the euro? If the markets were certain the £ merged into the euro soon with the fixing of a rate of 85p /€1, the £ would stop falling and the ECB could help the BoE defend that rate BUT that means dropping the pound .ugh pascal-pierre, Dinan, Brittany, France" ..taken from comments. What is the possibility of HMG actually shafting every prudent person in the UK to the extent this person is suggesting (85p/1euro exchange rate at inclusion into the eurozone)?? If this happens I will have lost 60% of my savings since summer 2007 and 15% from parity, barely bares thinking about, but I must. This is driving me nuts, you try to be sensible and plan for the future of your family and those people "that matter' tear it away.
Its only just started folks - into the bunkers
U.S.News.com: Nouriel Roubini: The $700 Billion Bailout Isn’t Enough
So there is a risk of something like a Japanese-style, multiyear economic stagnation. I would not rule it out, but it is not my benchmark scenario. I think there is a one-third probability it will end up that way, but a two-thirds probability that we will end up in a severe, two-year-long recession. And that would be by any standard the worst recession that the U.S. has experienced in the last 60 years.
How many!!!!!
Daily Express: 3 MILLION TO SEEK MORTGAGE BREAK
UP TO three million struggling homeowners are thinking about freezing their mortgage payments or not paying at all while they struggle through the recession. But property experts warn such breaks could push up overall monthly repayment increase total interest once the payments resume, according to research by price comparison website uSwitch. uSwitch said “Unfortunately, today’s financial climate is pushing three million more consumers down this road just to keep up with the cost of living or to cover holiday costs. However, 1.4 million consumers think the interest is frozen during this holiday and six per cent think it’s completely free so it’s unlikely that people fully understand the long-term financial implications.”
House prices will crash in 2009 for sure
Telegraph.co.uk: Repossessions to reach 75,000 in 2009, says CML
The CML refused to say how many people would avoid reposession because of the Government's mortgage holiday idea, but said it had kept its forecast at 75,000 because the economy had worsened so much in recent weeks.
How many !!!!!!
mortgagestrategy: Two million planning mortgage payment holiday
Research from uSwitch.com reveals more than two million borrowers are considering taking a mortgage payment holiday.uSwitch.com believes collectively this could push their monthly repayments up by £54m and increase their total interest by £7.2bn. Despite the government's recent announcement to offer cash strapped mortgage customers a two-year freeze on interest repayments, 729,054 people claim they are considering or have already taken a holiday because they are expecting to be made redundant.
Divine intervention
The Times: Archbishop of Canterbury welcomes credit crunch 'reality check'
"The archbishop told BBC Radio 4's Today programme that the country had been “going in the wrong direction” for decades by relying on financial speculation to generate wealth quickly rather than “making things”.".............I think we could see the churches filling back up with this kind of sense coming from the church.............. "Dr Williams admitted that he was likely to face criticism for giving economists “advice” on how to tackle the crisis."..........I would listen to an owl on acid before most economists... "In an outspoken interview with the BBC, Dr Rowan Williams said that the credit crunch was a welcome “reality check” for a society that had become driven by unsustainable greed. "....does this guy blog on here?.......
Banks will lend to anyone, but only the most reckless would borrow in this environment
Times: Alistair Darling aims to guarantee business lending
The Chancellor is considering a national lending scheme under which the Government would guarantee new lending to businesses of all sizes as one of his leading options. If past loan schemes are followed, the Government would cover most of the risk on each loan, possibly up to 80 per cent, and the bank would bear the rest. The taxpayer could be faced with a big bill if companies defaulted, as some certainly would. The default rate of firms involved in government loan schemes since 1981 is 28 per cent. [CalculatedRisk says: The problem is partially that banks have tightened standards, but also that loan demand has fallen sharply (not many companies are looking to expand or invest right now). Guaranteeing lending might loosen standards, but I fail to see how it encourages companies to borrow]
Anatole again, getting desperate, printing money and forcing people to spend it.
Times Online: Forget hard choices. We need pampering
Can it get any worse than this ? "If there were doubts over whether private citizens would spend the newly-minted dollars, the Fed could agree with the Government on a programme of direct public spending financed by free electronic money, instead of taxes or bond issues. The Fed can literally guarantee that any new money created by this “ultra- Keynesian” approach will increase economic activity and employment. But such certainty comes at a cost."
Why 0% interest rates are dangerous
MoneyWeek: 0% interest rates are dangerous. Here's why
With US interest rates as low as they can go, the Fed has little more room to manoeuvre. Plan B is to print more money. But that's a dangerous game, and we will all be paying for it for a long time.
Fed unleashes greatest bubble of all
Reuters: Fed unleashes greatest bubble of all
"..the Fed's decision to cut interest rates to between zero and 0.25 percent, coupled with a promise to keep them there for an extended period, and the threat to conduct even more unconventional operations in the longer-dated Treasury market risks the biggest bubble of all, this time in the U.S. government debt"
Can't say it better than Dr Williams
Telegraph: Gordon Brown's spending plan like 'drug addiction'
"Rowan Williams also said the credit crunch was a welcome "reality check" for a society that has become driven by unsustainable greed". Not just Germany thinking we're "crass"...
Surveys by home sellers
HIP-Consultant.co.uk: Return of the Home Condition report (HCR)?
After the press release by Magaret Beckett on HIPs. Most focussed on the property questionnaire, however there is reference in the statement to a home survey returning to the table. Could this be the case?
Woe betide those greedy enough to invest in hedge funds when times were booming...
Private Equity Wire: Barbarians at the hedge fund gates
The 'Barbarians beseigeing the hedge fund gates' are hedge fund investors who simply want their own money back. But of course if that happens then hedgies will be out of jobs. So to avoid 'having to liquidate assets in a declining market', this article details all manner of schemes to prevent investors taking their money back. Of course, the fund values could just continue to decline further, in which case hedge fund investors will lose everything, having to watch their wealth disappear. Choosing to put my cash in an HSBC instant access current account looks like a more inspired move by the day.
It's not all bad news.This will make you feel better
Mail: Recession? Not in the public sector where state workers are unscathed
Private sector workers are losing their jobs in record numbers but the public sector is still booming, official figures revealed yesterday. The number of private sector workers plunged 128,000 in just three months, the biggest fall ever recorded. But workers in the public sector emerged unscathed from the worst economic meltdown since the First World War.
Hmmmm?
Timesonline: Retail sales unexpectedly rise 1.5% in November
Official figures this morning showed an unexpected rise of 1.5 per cent in retail sales in the UK last month. British retail sales rose 0.3 per cent in November, and are up 1.5 per cent on last year, according to the Office for National Statistics. A 3.9 per cent rise in sales of household goods, the biggest monthly increase since July 2007, fuelled the growth. Food sales were up 0.2 per cent, but clothing and footwear sales dropped 0.5 per cent.
More repossession porn
BBC: Mortgage arrears to reach 500,000
Mortgage lenders predict the recession will lead to a huge rise in arrears among their borrowers in 2009. The Council of Mortgage Lenders (CML) said the number of households more than three months behind with their repayments would reach 500,000. That will be more than double this year's expected figure of 210,000. The CML said 2009 would be "very tough" because the recession would drive up unemployment and lead to 75,000 repossessions among borrowers.
But retail sales rose in November
Bloomberg: U.K. Pound Sinks to Record 94 Pence per Euro Before Retail Data
"The pound fell to 94 pence per euro for the first time on speculation a report forecast to show a drop in retail sales",........and yet the retail figures rose 0.3% and the pound still drops and the IFO in Germany drops to the lowest level since the 1980's. Speculation, as with commodities earlier in the year, is controlling the pace of the sterling fall rather than the widely touted 'fundamentals'. Banks, traders and HMG (IMHO) etc. are building positions and forcing sterling lower, Happy Christmas Forex. Most economists say that the downside is already 'priced-in', what does this mean when sterling continues to drop? To those of you out there who defend these violent moves down please explain this so that I can begin to understand the thinking in the Forex game.
How Madoff ripped off the Elite
Wall Street Journal: The Impressionable Elites Get Snookered
For most of this century, con men and hucksters preyed on the uneducated and the elderly who couldn't read the fine print. But now we learn that the real mother lode for con artists is the Impressionable Elites* of country clubs, and the rarefied hedge fund managers of Wall Street and Greenwich. Bernard Madoff proves the point. no one questioned his numbers. He sold himself to people on the basis of brand. Historically, elites have behaved like this. They follow a path from being the founders of new nations to the dupes who stand by as their piece of civilization is sacked and pillaged.
Why doesn't the BoE try this?? rather than cutting rates???
Bloomberg: ECB May Cut Deposit Rate to Revive Bank Lending, Economists Say
"The European Central Bank may cut its deposit rate as soon as today in an effort to jolt banks into lending more to each other, economists said." ..in answer to my alternative headline...."because they don't have Danny "slash and burn' Blanchflower calling the shots." Its no wonder the ECB have a stronger currency.
The Very Very Great Depression........................... est arrivé
Leap 2020: Global systemic crisis – New tipping point in March 2009
LEAP/E2020 anticipates that the unfolding global systemic crisis will experience in March 2009 a new tipping point of similar magnitude to the September 2008 one. The crisis will continue, in particular in the US and UK, and in all the countries depending on their economy, were the duration could approximate a decade. In fact these countries should not expect any real return to growth before 2018.
Where are your "sound fundamentals" now, Crash Gordon?
BBC News: Unemployment increases by 137,000 [in three months]
The number of people out of work in the UK rose by 137,000 to 1.86 million in the three months to October - the highest level since 1997. "I think what's interesting is the scale of job losses this early in the cycle," said George Buckley, an economist at Deutsche Bank. "Unemployment is normally a lagging indicator so to see so many job losses this early in the cycle is extremely worrying." "The latest unemployment figures are bleak and herald a return to the dark days of mass joblessness we hoped had gone forever." Managers are expected to be hit hard by job cuts, with the Management Consultancies Association forecasting up to 360,000 will lose their jobs by 2010. The Prince's Trust has also warned that young people have so far borne the brunt of job losses.
Hitting the mainstream
Telegraph: Free money coming your way!
The financial crisis is so bad that governments are ready to print money to stop the economy seizing up. Not only did the Fed cut interest rates to as low as zero, it indicated that it would hold them there and that it will pull out the big guns – in other words ready the printing presses – to fight the worsening crisis. A day later the Bank of England minutes revealed the committee had considered cutting by more than one per cent this month. The Western world is now in recession, at a scale few of us have experienced. Even so, the fact that Bernanke and the Fed are advocating helicopter drops of cash is startling. This has alarming precedents: it was the printing presses that did for Weimar Germany, and sparked Zimbabwean hyperinflation.
Bit by bit, the world's great economic engine shuts down
Sky News: Chrysler Shuts Down All Factories
Chrysler said Wednesday that it will idle all of its manufacturing operations starting this Friday through at least January 19 in an effort to keep inventories more aligned with plunging U.S. demand for new cars and trucks. "As a result of the financial crisis, the automotive market remains depressed due to the continued lack of consumer credit for potential buyers," the firm said in a statement. "Last week several automakers announced significant downward adjustments in production for the first quarter of 2009," it said. "To make sure our inventory remains aligned with market demand, Chrysler will also extend the holiday shutdown already in place." All operations "will be idled at the end of the shift on Friday", said the statement. [Nothing to do with house prices, sorry.]
Wednesday, December 17, 2008
Here we go again, or do we????
findaproperty.com: The Return Of The 95 Per Cent Mortgage
Louise Cuming, head of mortgages at moneysupermarket.com, said:"However, the dangers of high loan to value mortgages remain. With projections of further falls in house prices, a 95 per cent mortgage could easily land borrowers in negative equity. As such those looking for high LTV mortgages must go into these deals with their eyes open and be comfortable with the idea of potentially living in negative equity." .....some sense at least, but what are the income multiples and will these be available to the BTL brigade. Although it says this LTV is only available to existing customers, for how long????
Oh dear what a mess, the bank cannot pay its debt
Daily Telegraph: Fresh credit strains in Europe as Deutsche Bank shocks markets
Deutsche Bank has refused to redeem a bond issue in an unprecedented move that has rattled Europe's credit markets. The news set off a fresh flight from European bank debt. Credit default swaps (CDS) on the iTraxx Financial index measuring stress in the sector saw the biggest jump since the Lehman Brothers crisis. Deutsche Bank, Germany's top lender, said it had chosen not to exercise a "call option" on a subordinated bond worth €1bn (£930bn), breaking an iron-fast code in the credit markets. The bank's share price fell 7pc in Frankfurt, and the default insurance on the company's debt surged. "This has never happened before," said Willem Sels, a credit strategist at Dresdner Kleinwort.
That sinking feeling
CNN.com: The growing threat of deflation
"I think the Fed's statement clearly reflected some alarm that there is a greater risk of not just deflation, but of depression," said Bernard Baumohl, executive director of The Economic Outlook Group, a Princeton, N.J. research firm.
Short summary of 2008
Daily Telegraph: Personal finance review 2008
I am surprised that they managed to keep the summary so short. They missed the bit about Flash Gordon claiming to have saved the world. Perhaps we ought to start our own summary of 2008 on the HPC Wiki and have a forecast for 2009. Will Flash save the universe?
"Intensifying solvency concerns about a number of the largest US-based and European financial instit
bbc: IMF in global 'meltdown' warning
The world financial system is teetering on the "brink of systemic meltdown", the head of the International Monetary Fund (IMF) has warned in Washington.
Bank to charge savers?
Daily Telegraph: UK needs negative interest rates, L&G warns
Negative interest rates? How does this work? Will the bank charge savers for the privilege of losing their money? The rest of the article seems rubbish, predicting that the recession will end in Q3 2009 with the FTSE at 4800! More likely we will still be getting deeper in to this mess with the FTSE at 2000. Still what does a mere mortal like me know.
Searches for HPC are up 40% year on year
Hitwise Blogs - Robin Goad: Property websites and the online house price crash
This blog post from Hitwise Intelligence shows how web users searching for "house price crash" have increased by 43% in the year to November, whereas searches for "house prices" are down 20%.
What will this do to property prices in South Kensington?
Telegraph: Sterling's slide may turn foreign bankers off 'la vie anglaise'
The French, Italians and Germans who have thronged to London's banks and bars over the past decade may look back on December 2008 as the month their love affair with "la vie anglaise" died. Sterling's slide to as little as 92p against the euro has had many of them thinking it may be time to go home. London's attractions during the boom years were manifold. It was the world's leading financial centre offering the greatest opportunities and financial rewards. What's more, those rewards were generally paid in sterling - a currency that at its height was worth €1.50. The trend was self-perpetuating. The more foreigners arrived, the more the city changed to fulfil their needs, and the more they felt at home. Even the French learned to like the UK capital.
Call from NLA for BTL investors to be included in the proposed mortgage support scheme
Citywire: Property: Dangers lie ahead for buy-to-let investors
The National Landlords’ Association is highlighting the plight of buy-to-let landlords whose investments face the double threat of oversupply in a fragile market and tenants losing their jobs. The call from the National Landlords’ Association (NLA) for buy-to-let investors to be included in the proposed mortgage support scheme is probably no more than a cheeky attempt to highlight the fact that buy-to-let landlords are struggling, too.
Beccy desperately wants the price falls to stop so calls the bottom of the market
Times Online: Dry rot at Savills
"These buyers are quietly calling the bottom of the market, even if the official figures — and Savills' profit forecasts — do not give any indication that it is anywhere within sight." - in other words ... the bottom of the market is, well, nowhere in sight then? "... the industry is pinning its hopes for recovery on cash-rich buyers. " Good luck with that one, love.
Stray That Broke The Camels Back
The Times: Opec makes largest ever cut to oil production
Over the past few weeks i have looked for the Catylst that will trigger the final nail in the UK economic coffin, i feel sorry we are there but Gordon, Badger and Mandy are amatures at the game ( if they have experienced life before maybe i missed it ), this single event will push oil towards $80 a barrel which is Opecs target, the feed through to UK inflation will be in my view collosal.
British Pound Weakens to 93 Pence per Euro for First Time
Bloomberg: British Pound Weakens to 93 Pence per Euro for First Time
By Justin Carrigan Dec. 17 (Bloomberg) -- The British pound weakened to 93 pence per euro for the first time and traded at 93.07 pence as of 5:31 p.m. in London. To contact the reporter on this story: Justin Carrigan in London at jcarrigan@bloomberg.net Last Updated: December 17, 2008 12:32 EST
Fatal economics will soon take down world economy
Reuters.com: Fed unleashes greatest bubble of all
Like the sorcerer’s apprentice, Federal Reserve Chairman Ben Bernanke and his predecessor Alan Greenspan have unleashed a series of ever-larger asset bubbles they cannot control. Now the Fed’s decision to cut interest rates to between zero and 0.25 percent, coupled with a promise to keep them there for an extended period, and the threat to conduct even more unconventional operations in the longer-dated Treasury market risks the biggest bubble of all, this time in U.S. government debt.
Just for fun (mainly)
Nestoholic: UK asking prices
This site does not show any new data, but it is an incredibly quick and easy way of comparing asking prices in two different areas of the UK. Well worth a visit.
RBS predict that people will continue to eat.
istockanalyst: We Still See Farmers As Sound Risk - RBS
McLean said RBS had actually increased its lending to agriculture during the past 12 months and farmers were still regarded as a sound risk. But he did concede that these were volatile times, even though farming and fishing were the only sectors of the economy that had not slipped into recession.
a bit too much me thinks
bbc: Brookside Close sold for £735,000
The infamous Brookside cul-de-sac that once saw its residents murdered, taken hostage and buried under a patio has sold for £735,000 at auction. An unnamed Liverpool-based buyer has snapped up all 13 properties of Brookside Close, in Liverpool's West Derby estate.
close all 807 Woolworths stores in the UK by January 5 with the loss of 27,000 jobs.
yahoo: All Woolies Stores To Be Closed
Administrators are to close all 807 Woolworths stores in the UK by January 5 with the loss of 27,000 jobs. Some 207 are to close on December 27 followed by another 200 on December 30.
2 days old, but interesting..
manchester evening news: Property investors launch legal action
A PROPERTY management and development company is facing legal action from 30 customers who fear they may lose more than £320,000 worth of deposits on apartments between them. The potential legal action against Salford-based Dylan Harvey Group is being led on the behalf of the investors by Manchester law firm Pannone.
Race to the bottom. Interesting times indeed.
Timesonline: Pound dives on prospect of steep UK rate cut
Sterling tumbled to a new low against the euro today after it emerged the Bank of England discussed making a steeper interest rate cut while analysts suggested the UK will follow the US Federal Reserve by making a sharp reduction to borrowing costs. Minutes from December's meeting between the Bank of England's Monetary Policy Committee (MPC) revealed that members considered a larger rate cut than the eventual 1 per cent but held off for fear of causing an excessive fall in the exchange rate.
more bad news daily
bloomberg: World Confidence Drops as Slump Deepens,
“It’s bad news on top of bad news,” said Lindsey Piegza, an economist at FTN Financial in New York. “People are wondering who’s going to fail next, who’s going to lie to us, and there’s just a lot of mistrust and skepticism. Confidence in the banking and financial system has been eroded.” The global crisis has cost banks almost $1 trillion so far in writedowns and losses. Citigroup Inc. announced plans to eliminate 52,000 jobs and accepted a $45 billion bailout from the U.S. government. Bernard Madoff was arrested last week for allegedly defrauding investors of $50 billion in a Ponzi scheme.
here we go again!
bloomberg: AIG Writedowns May Rise $30 Billion on Swaps Not in U.S. Rescue
“Every time I look at their statements I find something new,” said Donn Vickrey, executive vice president of Gradient Analytics in Scottsdale, Arizona. He estimated that AIG may need to take at least $28 billion in additional writedowns on swaps covering European corporate loans and prime residential mortgages, as well as collateralized loan and debt obligations.
The end of Fiat Money
Market Oracle: U.S. Federal Reserve Sets Stage for Weimar Style Hyper-inflation
The Federal Reserve has bluntly refused a request by a major US financial news service to disclose the recipients of more than $2 trillion of emergency loans from US taxpayers and to reveal the assets the central bank is accepting as collateral. Their lawyers resorted to the bizarre argument that they did so to protect ‘trade secrets.' Is the secret that the US financial system is de facto bankrupt? The latest Fed move is further indication of the degree of panic and lack of clear strategy within the highest ranks of the US financial institutions. Unprecedented Federal Reserve expansion of the Monetary Base in recent weeks sets the stage for a future Weimar-style hyperinflation perhaps before 2010
One more reflation before the collapse
Market Oracle: Government Bailouts the Ultimate Ponzi Scheme Heading for Financial Collapse
Notwithstanding the success of a 2nd American Revolution - Politicians, Bankers, Power Brokers, Lobbyists, Wall Street, and Huge Trans-National Corporate Conglomerates have collectively succeeded in delivering their subtle-monopoly deathblows to American Free Market Capitalism. In doing so, they have destroyed the constitutional fortress which once protected and kept shining the beacon of American ideals and free enterprise.
Economists discuss
FT: Central banks need a helicopter
The most direct and efficient solution to the economic and financial problems is for central banks to transfer cash directly to the household sector.
anyone know anything about this company? is it large/small etc
contract Journal: PC Harrington workers ordered to take 15% pay cut
One worker said: "I've been hereyears and resent thistreatment. Theytalked about redundancies a few weeks ago and now have come up with this pay cut. They think we're grateful still to have a job and will put up with anything."
dear jimmy your father is out of work, xmas is cancelled we have to give house to bank!
bbc: National Express to cut 750 jobs
Rail and bus firm National Express says it plans to cut up to 750 jobs to save costs over the next year.
Bank considered bigger rate cut
0% here we come: BBC:
The Bank of England's rate-setting body voted 9-0 to cut rates to 2% this month and considered a bigger move, minutes from its meeting have shown. The monetary policy committee (MPC) agreed that a cut in the Bank rate from 3% to 2% was the minimum needed. However, it avoided a deeper cut on concerns it could hit the pound and undermine confidence in the economy. The minutes are likely to reinforce expectations that UK rates will fall further in the months ahead.
Summer Election? - I bet he's already placed orders for ticker-tape, jelly and ice-cream!
Times: Brown sets summer date for British troop pullout from Iraq during Baghdad visit
"All but a handful of British troops will be home from Iraq by next summer, Gordon Brown announced on a surprise visit to Baghdad today. Mr Brown and his Iraqi counterpart, Nouri al-Maliki, said that UK forces will have "completed their tasks" in the first half of 2009 and will then leave the country." Surely this is it?
Is the dollar likely to remain the worlds reserve currenc?
Bloomberg: Dollar Declines to 13-Year Low Against Yen After Fed Rate Cut
Dec. 17 (Bloomberg) -- The dollar fell to a 13-year low against the yen and the weakest versus the euro in 11 weeks after the Federal Reserve cut its target interest rate to the lowest among the world’s industrialized nations.
But I thought Gordon Brown had saved the world with his economic genius?
Telegraph: Taxpayers face new pain as Gordon Brown's bank bail-out fails to stop credit crunch
In comments which raise the ultimate prospect of wholesale nationalisation of the British banking system, Mervyn King said that "additional measures" are now needed to solve the crisis. The £500bn rescue plan unveiled by the Prime Minister in October and since copied throughout the world is not encouraging banks to lend more to families and businesses, he said.
It is deflation! The central bankers are very worried about it.
Telegraph: US interest rates: Mr Bernanke correctly judged the risk of deflation
The sort of deflation now spreading across North America, Japan, and parts of Europe is not the benign variety of the late 19th century when prices slid gently for year after year. Debt levels are much higher today, so the deflation effect is that much more dangerous. The danger is a self-feeding downward spiral as the `real’ burden of debt keeps rising into the slump, as Irving Fisher dissected in his great opus “The Debt-Deflation Theory of Great Depressions”. US inflation was minus 1.7pc in November, and minus 1pc in October. This entirely vindicates the brave decision by Ben Bernanke at the US Federal Reserve -- and our our own Mervyn King at the Bank of England -- to “look through” the oil spike earlier this year and keep his focus on the underlying forces at work in the global ecnomy
Tuesday, December 16, 2008
Crass Keynesianism?
Telegraph: ECB rebels defy Bundesbank
There is a risk that policy makers run out of ammunition too early and remain without a means of escape." He likened it to a spaghetti western. The good guys in the cavalry lose if they empty their revolvers too early, and are then surrounded
The Return Of Credit - Not Exactly Cheap Though.
The Times: Nationwide brings back 95% mortgage
A Times run article to show 95% mortgages are returning, sad to see they will ever return personally as its one of the reasons that has the UK in the mess thats makes it what it is today with people working 50 years to fund a shoe box. Interesting to note you can have it fixed at 7.2% APR though.
Mervyn gives up the pretence of trying to meet the inflation target - Quite incredible!
Telegraph: Mervyn King warns on inflation
"In a letter to Alistair Darling, Mr King said that the Bank is effectively suspending its efforts to meet the 2pc CPI target until 2011 as a combination of the recession and the temporary VAT cut make inflation far more volatile than usual. The admission that the Bank will not aim to meet the target over the next year and a half will cause some consternation in the City, where inflation stability is viewed as one of the most important precepts of the central bank." And here was I thinking the inflation target has been missed for well over a year - hardly a 'temporary disturbance'!!! What a fraudster. We're in this mess BECAUSE he failed to more accurately track inflation.
What's that creaking sound?
Telegraph: Six housing associations placed on 'watch list' over finance fears
Concerns are growing about the financial security of housing associations because of falling prices of private homes – whose developers are often partners in social housing projects – plus a lack of debt financing and mortgage availability.
Getting squeezed from all sides
Telegraph: Will 2008 be a watershed for the buy-to-let sector?
2008 has been a grim year for most people who invested in the housing market. The freezing up of credit has sent property prices tumbling, and made it virtually impossible to get a decent buy-to-let mortgage without a deposit of at least 25%. And while rents initially appeared to be compensating for the falling capital values, it now seems that a flood of extra supply into the rental market has sent rents downwards in many areas. On top of the worries over the economy, landlords have also had to cope with new legislation, including energy performance certificates and reforms to the housing benefit system. Falling rents and a glut of homes to let in some areas mean many landlords have not been able to find tenants or cover the mortgage costs.
The Fed isn't a branch of government, Barry!
FT: Fed slashes rates to near zero
President-elect Barack Obama told reporters "Although the Fed is still going to have more tools available to it, it is critical that the other branches of government step up.”
Monopoly economy - faith in USA has evapourated
Bloomberg.com: Fed Cuts Rate to Zero-0.25%, Will Use All Tools
“The Fed is sending a message that it will print money to an unlimited extent until it starts to see the economy expanding,”
Only .25% to go!
BBC News: US rate cut to zero - 0.25% range
The US Federal Reserve has slashed its key interest rate from 1% to a range of between zero and 0.25% as it battles the country's recession. In its statement, the Federal Reserve warned that "the outlook for economic activity has weakened further". It predicted that rates would stay at the current exceptionally low levels "for some time".
Data revealing the scale of the world house price falls
Busuness World: World House price Slump
In 2008, the crash of the world’s housing markets, which began in the US in 2007, precipitated the world’s most severe economic crisis since the Great Depression. Inflation-adjusted house prices fell in more than 21 countries out of the 29 for which Q3 figures are available. In no country is there cause for strong optimism. The latest quarterly figures bring grim news, even in countries which recently saw price rises.
It ain't working is it? Securitization was a scam that created a housing bubble thats popped
Telegraph.co.uk: Bank of England warns more needed to rescue UK economy as bail-out falters
Despite a blizzard of interest rate cuts from the Bank and a dramatic increase in borrowing by the Government, the economic picture for the UK continues to deteriorates. Manufacturing is contracting faster than expected and figures tomorrow are poised to show a rise in unemployment.
Now you can't even hedge your bets
Bloomberg.com: Third of Hedge Funds Face ‘Wipe Out’ After Slump, Godden Says
“The failure rate is going to go up, the closure rate is going up, and the merger rate is going up,”
Exposing the myth behind deflation predictions
Telegraph: Price of fresh food rises again, figures show
The annual rate of food inflation rose from 10.1 per cent to 10.8 per cent. Howard Archer, chief UK and European Economist at Global Insight, said: "Sterling is having an impact as most of our fruits are imported. This is not something that is going to disappear." As an aside, Mervyn King's chief role has always been to shape expectations in his announcements, and today's missive that deflation could happen 'soon' is no exception. Meanwhile inflation is still 110% above target.
Fair dinkum Aussie bloke chokes up three quarters of a million dollars when he fails to complete
The Australian: High-end homes fall in a hole as crisis hits rich
A SYDNEY house-hunter reportedly had to pull out of a recent deal to buy a multi-million- dollar house and forfeited his $750,000 deposit to the vendor in the process.
Interest rate cuts and firt time home buyer bribes aren't working in Australia
The Australian: Fears of debt push auction rate lower
INTEREST rate cuts and the increase to the first-home buyers grant appear to have failed to restore confidence to the property market with auction clearance rates dropping sharply over the month.
US inflation falls still further
BBC: Disinflation!
"US inflation has dropped by a record amount for the second month in succession, as petrol prices and other energy costs continued to fall."
Speechless!!
Mortgage Introducer: Extra cash help for first-timers
Margaret Beckett has revealed the government has added an extra £100 million to its scheme to help up to 18,000 first-time buyers get on to the property ladder. Beckett also announced that more than 130 developers have agreed to take part in the scheme whereby households with incomes below £60,000 will be able to buy a new home with the help of a shared equity loan. The loan will be partly funded by the government and the developer and will be free of charge for five years. First-time buyers can use it as a deposit and it can cover up to 30 per cent of the purchase price.
Cost to insure government debt default soars again
FT Alphaville: The mystery meaning of sovereign CDS
Interestingly the article points out the limitations of insuring against government default. Faced with default, it is more likely that the government would print money to repay, thereby inflating its way out of the issue. And if the goverment did decide to default rather than inflate, it would be inlikely that the insurer would/could pay out anyway.
Buy-To-Hell
Times: Bargainhunter: tenants' revenge
The "woman who phoned up the pet shop to order 100 cockroaches. What do you want them for, asked the shopkeeper? “Because,” she replied, “I’m moving today and my lease says I must leave the place exactly as I found it.” "
Mortgage lenders say house prices are continuing to crash
Telegraph.co.uk: House prices to continue to fall
Following bank bails outs, record rate cuts and mortgage misery, the majority of us will be glad to see the back of 2008, yet one question remains: are we stepping out of the frying pan and into the fire?
Should we blame the pensions ?
ITN: Pension Apprehension
Pension budgeting is tricky. Here, public service pensions may be miscalculated for some people. It seems to me that the public's uncertainty about their pension future motivated them to invest in property and to accept that a property of their own should have a high asset value. And it seems to me that the government, faced with a pensions crisis, wanted house prices to succeed as investments too. We talk about tracking inflation, etc.. Perhaps the overriding motive of policy is a perceived pensions deficit. [my first article post - look at me all back of the bus]
The biggest scam of all: Governments saving us from the bust
MoneyWeek: The biggest scam of all: Governments saving us from the bust
Never mind dodgy hedge funds swindling billions out of investors, Governments are doing the same to taxpayers. But all their misguided efforts at 'fiscal stimulus' will be in vain. In fact, they may even make things worse...
EWI ask the question
EWI: Will the U.K. Housing Market Bottom In 2009?
Bearish momentum divergence and classic 5 waves up with a 3 wave down move to come. Have we had the A yet? For the folks that dont know the textbook form of the downmove is a 3 waves. An "A" wave against the prior trend, a "B" wave retracing that primary downward move (the sucker move) and then the "C" which results in new lows.
Is deflation a red herring?
BBC News: UK inflation declines once again
UK inflation fell in November to 4.1%, official figures have shown, less of a decline than analysts had expected. The drop in the government's preferred Consumer Prices Index rate compares with 4.5% in October. Some economists had tipped a fall to 3.9% in November.
The golden age of cheao holidays is over
Telegraph.co.uk: Holidaymakers get less than 1 euro per pound at airports
Holidaymakers are receiving less than one euro to the pound as sterling slumped to a new record low against the single European currency.
How can the end result of all of this "quantative easing" be anything other than hyperinflation?
CNBC: Fed May Signal Other Steps Besides Interest-Rate Cut
The Federal Reserve is expected to cut interest rates to close to zero on Tuesday and may point to further unconventional steps to battle a year-old recession. Economists expect the US central bank to lower its target for benchmark overnight rates by at least a half-percentage point to 0.5 percent and clearly state it will deploy so-called quantitative easing measures to restore growth. The Fed on Monday said US industrial production fell 0.6 percent in November, with manufacturing output shrinking 1.4 percent to put it 7.3 percent below its year-ago level. A separate index of manufacturing activity in New York state hit a record low in December.
The economy in the current quarter could contract 1.25% to 1.75%, the newspaper added.
faz: The German government expects the country's economy to contract 3% or more next year, Frankfurter Allgemeine Zeitung said in its Tuesday edition, citing internal economy ministry figures.
The German government expects the country's economy to contract 3% or more next year, Frankfurter Allgemeine Zeitung said in its Tuesday edition, citing internal economy ministry figures.
Just how much “dirty money” entered Spain in the boom years is impossible to say. But annecdotal evi
times: How Spain built on the boom in dirty money
Police seized €200,000 (£178,000) in cash, 23 luxury cars and a Dalí painting. Bank accounts containing €414 million were frozen. Mr Petrov and 17 others were charged with a variety of offences including money-laundering, murder, extortion, drug dealing, illicit association, falsification of documents and tax fraud.
Unemployment is up – and tenants are more likely to default
Independent: Rent arrears haunt landlords
After seeing at least 15 per cent wiped off the value of their property investments in the past year, it seemed that landlords on variable-rate mortgages could at last breathe a sigh of relief thanks to the recent dramatic cuts in the base rate. But already they are faced with a still graver problem: the growing prospect of rent arrears. 71 per cent of landlords expect tenants to fall behind on their rent during the course of next year as unemployment shoots up and the credit crunch bites harder. "If you have two buy-to-let places and one tenant doesn't cough up, that's half your rental income." [Wow, what an insight. Do they get paid to write that? Here's another insight:] "The bedsit end of the market is usually considered high risk when it comes to defaults on rental payments."
Violent protests could break out if the elite are seen to benefit too much
Times: Head of IMF fears unrest without action on economy
Violent unrest may be sparked around the world by a prolonged global slump unless governments act with greater urgency to jump-start stalled economies, the head of the International Monetary Fund said on Monday. Dominique Strauss-Kahn sounded a stark warning over the consequences of weak and uncertain government reaction to the economic crisis. The IMF has called for governments in leading economies to spend a combined 2 per cent of global GDP, or $1.2 trillion, to try to fend off the danger from global recession.“If we are not able to do that, then social unrest may happen in many countries - including advanced economies.” He also claimed that violent protests could break out in countries worldwide if the financial system was not reordered to benefit everyone rather than a small elite.
Reliance on City makes UK more vulnerable
Guardian: Chancellor admits Britain is facing more severe downturn
Britain will be more severely affected [than other countries] by the global downturn because of its dependence on the City of London, the chancellor, Alistair Darling, warned yesterday. Darling, who gave the government's first warning of the depths of the downturn when he told the Guardian in August that the world was facing "arguably its worst" economic conditions in 60 years, returned to the theme yesterday in a debate on the economy. Darling added: "We're also affected by the downturn in the housing market." [Affected by? These goons caused it in the first place!]
6,400 building firms to fail by middle of next year
Guardian: Housing starts lowest since 1924 as construction bears brunt of recession
A report out today from the Construction Products Association (CPA) and Ernst & Young reveals there have been just 135,000 housing starts this year, compared to 203,500 in 2007. This figure, excluding the second world war when few houses were built, is the lowest since 1924, when there were 87,000 housing starts during a period of severe deflation. Many projects date from before the worst of the financial crisis hit and there are fears that homebuilding will grind to a virtual standstill in the new year - leading to tens of thousands of job losses in the building trades. Commercial property is also being hit hard, with the CPA expecting falls in office construction alone of 24% next year and 19% in 2010.
Monday, December 15, 2008
It's only a recession until the government sticks its nose in
Prudent Bear: How recessions become Great Depressions
The preconditions for recession in 1921, 1929, 1947 and 1981 were similar to today. In each case, a large percentage of U.S. assets, built up over the preceding few years, had become obsolete and needed to be scrapped. All of these downturns involved an "overhang" of assets that were no longer worth their cost, and the associated debt defaulted. This is similar to the housing overhang of 2008. Only in 1929-30 was the overhang less obvious initially, but an overhang was produced during the downturn by the insane political imposition of the Smoot-Hawley act [heavy trade tariffs], decimating world trade. By contrast in 1921, the treasury secretary believed in allowing the private sector to liquidate its way out of recession. He therefore organized no bailouts, but instead cut public spending.
Taxpayers money at work
Metro: A 100% mortgage from the taxman
The 100 per cent mortgage is on the way back as taxpayers' money is used to tempt first-time buyers to move into empty new homes. The loans will be backed with £400million pledged by ministers to a scheme to help the less-well-off get on to the property ladder. It could mean up to 18,000 new homes sitting empty after the housing bubble burst are finally occupied. But critics said that the government risked driving thousands of young home-buyers into negative equity. Lib Dem spokeswoman Sarah Teather said ''First-time buyers are being bribed into a falling market, putting them at serious risk of negative equity."
Housing market is now taking one almighty hit - how can the UK escape whats coming?
usatoday.com: Why home values may take decades to recover
Rick Wallick moved into a new, three-bedroom $200,000 home in Maricopa, Ariz., in October 2005. Today, the home is worth $80,000.
This adds up to worst house price crash in UK history in 2009 - 2010
Telegraph.co.uk: Britain faces worst recession in history, Cabinet minister Tessa Jowell admits
Tessa Jowell, the Olympics Minister, said the forthcoming downturn was expected to be "deeper than any that we have known".
A look back on how brown discovered the housing bubble in
FT.Com: Asleep at the wheel
It is often wrongly claimed that Gordon Brown failed to spot the housing bubble. In fact, he called the bubble as early as 2005. The trouble was he believed he had addressed it. Brown thought he had successfully managed a boom without a bust.
BTL investor states his rents are now back to 1993 levels
BBC Working Lunch (Today): Housing market
People who are unable to sell their properties because of the collapse of the residential sales market are now flooding the lettings sector as reluctant landlords. Simon meets a Working Lunch viewer who is concerned about his rental properties and Richard Price, Director of the National Landlords Association, talks to Naga and Declan.
We don't even need sub-prime any more for HPC
Telegraph: Prime mortgage borrowers struggle with payments, report says
"The study by ratings agency Standard & Poor's showed that the percentage of so-called "prime borrowers" – the most low risk borrowers – who were finding it difficult to repay their loan was at its highest level since 2000, when its records began. "
Somebody loves us, :-D, even though we suck
Telegraph: Britain, ich liebe dich
This summer, I discovered that my fellow countrymen's fascination with the British can also enter the realm of the obsessive. For a Radio 4 documentary, I travelled around the fatherland to investigate the phenomenon of anglomania. For instance: every year at the end of August, thousands of Germans gather at the Polo Club in Hamburg to celebrate British Day. I think its great to see their attitude. Maybe we could take on their conservative home loan policies.
Money creation finally here
Kitco: Why You Must Immediately Bet on Inflation
Last week, the Fed took a "quantum leap," according to George Goncalves, the chief Treasury and agency strategist at Morgan Stanley. Instead of swapping assets in the banking system, the Fed started buying them. The Fed bought $5 billion of Freddie Mac, Fannie Mae, and Federal Home Loan Bank corporate debt. The New York Fed's website says the purchases are being "financed through the creation of additional bank reserves." The Fed has finally started to create money out of thin air. The market didn't flip out. And the strategy worked. The average rate on a 30-year fixed-rate mortgage fell from 5.97% to 5.53%... the largest weekly drop in 27 years. Now that the Fed sees how successful this strategy was, we can expect the government to continue with it.
Struggling householders face another hike in council tax as the money councils collect for services
dailymail: Council tax hike warning for householders as town hall income dives
Up to 30 are refusing to pass on the 2.5 per cent cut in VAT, saying it is too expensive to adjust charges for services such as car parking. Wirral Council, in Merseyside, said it would make £110,000 this way.
Crystal ball or simply an idiot?
yahoo: IMF Boss On Global Recovery Date
The International Monetary Fund chief has warned the world economy will not start recovering until late 2009 or early 2010.
Consultation with unions and staff at the pressings and panels factory started on Monday morning.
bbc: 106 jobs to go at car parts firm
Stadco, which acquired its factory in Powys 10 years ago, has other plants in Castle Bromwich in Birmingham, Coventry, Shrewsbury and Saarlouis, Germany. A company spokesman said a review was also taking place across all of Stadco's plants.
sounds painful
bloomberg: Annus Horribilis Peaks in Anxiety for Global Economy
The world economy has “suffered a cardiac arrest,” says Mohammed El-Erian, co-chief executive officer of Pacific Investment Management Co., the Newport Beach, California-based manager of the world's biggest bond fund. The damage is so immense and widespread, the most central banks and governments can hope for next year may be to stop the deterioration and set the stage for recovery in 2010. Failure may heighten the danger of deflation and near-depression
The bonds were “always structured for the benefit of the creditors, trampling on the national intere
bloomberg: Ecuador Default May Hit ‘True Monsters’ Harder Than Argentina
Ecuador may saddle investors with the biggest losses in a government bond restructuring since at least World War II after President Rafael Correa fulfilled a two-year pledge to default on debt he calls “illegitimate.” The country’s three dollar-denominated bonds, with a total face value of $3.9 billion, fell below 25 cents on the dollar on Dec. 12 following Correa’s announcement that he wouldn’t make a $30.6 million interest payment due today, according to JPMorgan Chase & Co.
A 30% fall in house prices? That looks optimistic
MoneyWeek: A 30% fall in house prices? That looks optimistic
Barclays head John Varley's prediction of house price falls is unusually candid for a bank executive. But the signs are that it's still hopelessly optimistic. Prices could drop further and for longer than most people realise...
Secured debt relating to BTL mortgages grew from under 2% in 2000 to over 10% this year
mortgagestrategy: Debt spirals in midst of financial crisis
Around 40% of home owners owe more than £90,000 in secured debt, reveals a survey carried out for the Bank of England. NMG Research carried out a survey of nearly 2,500 households on behalf of the BoE looking at the financial position of British households. It found that the number of home owners who owed more than £90,000 in secured debt has risen 35% since the mid-1990s.The survey also recorded a further 15% of home owners owed over £150,000 in secured debt.The total amount of debt owed by UK households reached almost £1.6trillion by Q2 2008, which works out at £60,000 per household.
No, David Smith. No.
Times: Are there signs of a thaw in the housing market?
Economists have been poring over the latest survey from RICS, which showed the first increase in new buyer inquiries since October 2006. Normally, as Simon Rubinsohn, chief economist at Rics, points out, such a rise is a prelude to a strengthening in housing demand. The report "gave some hope that house-purchase activity has finally troughed and that the most intense phase of the downward price spiral is behind us." Karen Ward of HSBC described the findings as “tentative green shoots”. Some people (not me) thought that when prices were rising, they could only carry on doing so. Now some think they can only ever fall. It does not work like that.
They're raiding their pension pot for this bailout - shocking stuff
Irish Independent: Irish government in €10billion bank recapitalization plan
The Government last night announced a €10bn rescue fund for the banking sector. The surprise announcement came after intense weekend talks involving senior government members and banking advisers. In a statement last night, the Government said it may use some of the €18bn in the National Pension Reserve Fund to pump money into the ailing banking sector
The pound could fall further this week on the back of a raft of gloomy data – as analysts warn that
telegraph: Sterling: fears increase as economic woes deepen
The pound is heading closer to parity against the euro, after closing at just €1.11 on Friday – the lowest it has been since the single currency was launched in 1999 and 17pc down on the beginning of the year when it was worth €1.34. It also fell to a record low against a basket of currencies
Barclays CEO joins HPC debate with 30% price drop prediction
Citywire: House prices already 25% lower, say estate agents
Estate agents are reporting actual house sale prices to be around 25% below their peak, making predictions of a 30% fall seem increasingly within reach. Online property search business Rightmove reported the figure alongside its report of a 10% drop in initial asking prices since their May peak.The agents’ suggestion of a 25% fall comes as Barclays chief executive John Varley told the Telegraph that Britain is only mid way through the house price slump. Varley was basing his comment on indices showing that house prices are down around 15% meaning the total fall could be near 30%.
Its OK, a bit of quantitative easing to sort this out
reuters: Barclays sees house prices falling further
"House prices are likely to fall between 10-15 percent next year and the unemployment rate may top 7 percent, the chief executive of banking group Barclays said on Monday. Barclays had expected property prices to slide about 25-30 percent between 2007 and the end of 2009"
Anthea Turner: We may lose our mansion
News of the world: Anthea Turner: We may lose our mansion
FORMER TV golden girl Anthea Turner last night sobbed as she revealed she’s lost an astonishing £100 MILLION in the credit crunch. The Perfect Housewife presenter told how her husband Grant Bovey’s buy-to-let empire had collapsed, and wept: “Our backs are against the wall—we may even lose our mansion.”
The Ostriches Have Left The Building
The Guardian: When Will The Oil Run Out?
Every newspaper report you've ever read denying the impending Peak Oil crisis, has had its roots, somewhere, in the forecasts of the IEA. Guess what? They were working without data. They were making it up.Just like the Saudis have been doing with their oil reserve figures, until Matt Simmons went through the books and discovered the alarming discrepancies. Better still, Monbiot here reminds us of the US government's own Hirsch Report, with all the grim prognoses Monbiot mentions here. By the way, forget 2020. The real crunch is in about 4-5 years time, when the implications of what's coming filter right through business, investment and on down to the public.
2009 is pay back year
Financial nightmare: BBC
$1000bn of "old world" companies' borrowings in the form of tradeable debt has to be paid back during the next 12 months. That would be a colossal sum to pay off at the best of times, and is equal to about five times what's been repaid in 2008.
Barclays boss predicts 30% fall in house prizes
BBC News: UK house prices 'to fall by 30%'
The head of Barclays bank has predicted that economic gloom will deepen, with property prices falling by up to 30%.
Coming out of the woodwork
FT: HSBC joins victims of Madoff’s alleged fraud
HSBC has emerged as one the largest victims of Bernard Madoff’s alleged fraud with potential exposure of about $1bn to the investment manager’s collapsed venture, according to people close to the situation
House prices 'to fall by 30%'
bbc news: House prices 'to fall by 30%'
Mr Varley says unemployment is set to rise further The head of Barclays bank has predicted that economic gloom will deepen, with property prices falling by up to 30%. John Varley's warning comes ahead of the latest UK unemployment figures on Wednesday, where the number of jobless is expected to rise sharply
Rightmove: Prices down 2.3% MoM, 6.3% YoY
FXStreet: UK house prices down 6.3 pct y/y in Dec
Rightmove's latest index shows asking prices in mid-December fell 2.3% on the month and 6.3% on the year. Both measures fell at record rates last month with prices down 2.9% on the month and 7.1% on the year. Asking prices are now down 10.2% from the peak in May this year, but Rightmove said feedback from estate agents suggested actual sale prices had dropped by 25% from their peak. Miles Shipside, commercial director of Rightmove, said: "On the basis that prices actually being achieved have fallen by a quarter, we predict that overall prices are now within 10% of bottoming out." Shipside also said the current low level of housing transactions can't be maintained, and predicted a recovery in 2009
Oil could well be a thing of the past
Telegraph: Car of the Century
This I think is relevant to alot of conversations that have gone on. S2R1 was certainly on to something Check out last night Top Gear if you missed it.
And the only bi-product is water
This was on Top Gear in case you missed it.: Hondas new answer to Oil running out
I know this has nothing to do with houses, but thought a few of you would be interested in this. If you don't like it 'Move On' as Clarkson would say. This car was featured on Top Gear last night. I don't know why they make them look so daft. But make this look like a normal car and it will become very popular. And Oil this may well make hit $10 a barrel quite soon. Only available in Califoria at present but I believe Honda are OK at mass production.
Sunday, December 14, 2008
But what about overshoot!
The Telegraph: House prices to crash 30 per cent, Barclays chief executive John Varley warns
Mr Varley said: "Our view was that from the top to the bottom, you would see a fall of something like 25 to 30 per cent. I suspect we're about halfway through that at the moment. I mean that slowdown, the negative house price inflation started in 2007, it's accelerated in 2008. "We're probably about halfway through that period, so in other words we've got another 10 to 15 per cent to fall between now and the end of next year. That would be our assessment."
Gordo, why don't we just join the euro? You know it makes sense.
BBC: Pound 'buying less than a Euro'
The falling value of sterling means some people are getting less than a euro for every pound when changing money, The Observer suggests. After commission and handling fees were charged, customers at some airports got just 197.13 euros for £200 on Saturday.
It will intervene to prop up reckless borrowers and an overvalued housing market!!!
The Times: Britain 'will not intervene to prop up pound'
Yvette Cooper, Chief Secretary to the Treasury, said that attempts by previous administrations to target exchange rates had been unsuccessful. The Government will continue to plot a course aimed at keeping inflation under control and supporting the economy, she said. Officials say that with inflation falling sharply the kind of interest hikes that might bolster sterling would be completely inappropriate at a time when the Government is intervening to support the economy.
Mortgage rescue scheme at work
Guardian: how a housing association stepped in to prevent a repossession
Arthur Stone is believed to be the first person in Britain to have been rescued by a housing association from having his home repossessed. The 53 year old postman, who has mild mental retardation, bought his council house with a £17,000 mortgage and a £10,000 loan for renovations. But his debts have spiralled out of control, and he now owes GE Money £75,000, as well as £25,000 in unsecured debt. Trent and Dove Housing Association has paid £76,000 for the property out of its own funds. They now rent it out to Arthur, for just £70 a week - a far cry from the £708 per month he had to pay his mortgage lender. David Orr, chief executive of the National Housing Federation, says: 'The mortgage rescue scheme is a charter for saving thousands of households from the nightmare of repossession.'
What a different view from a few months ago!
Scotsman: Scots homeowners warned that few will escape negative equity next year
As the housing market north of the border continues to rack up double-digit declines, property experts say Scotland will almost certainly fall victim to widespread negative equity despite avoiding it during the last downturn in the early 1990s.
Predicatable - fanning the flames of the house price inferno
Express.co.uk: LANDLORDS FACE THE SPECTRE OF REPOSSESSION
THOUSANDS of buy-to-let investors face repossession in 2009, according to experts who warn that huge numbers of amateur landlords have bought properties with unrealistic expectations. Many will have been stung because they bought at the top of the market in the past few years at inflated prices and these properties have plummeted in value.
Country by country investigation of the house price crash
MENA FM.COM: The world House price Crash
House prices also fell in Austria, Japan, Luxembourg, Israel, Norway, Malta, New Zealand, and Portugal. Although the latest figures are not yet available, house price falls are also expected in economic powerhouses such as France, Italy, Germany
No Suprise There Then
MSN: Government 'will not support pound'
The Government is not planning to step in to support the pound as it sinks towards parity with the euro, a senior Treasury minister has indicated. Chief Secretary to the Treasury Yvette Cooper said that attempts by previous administrations to target exchange rates had been unsuccessful.
The Unretired - sounds like a horror movie
BusinessWeek: Unretired: Retirees are Back, Looking for Work
They saved. They planned. Then housing tanked and the markets melted. Now they need jobs, and there aren't any. These are The Unretired. Seniors who thought they were set for life just a year ago now face the prospect of going back to work for two, five, even 10 years. They're sprucing up their résumés, calling old work contacts, and flocking to employment sites. These aren't just the spendthrifts or sloppy planners you would expect to run into trouble in retirement. Interviews with 35 of The Unretired show that many are people who did everything they were supposed to do—working for decades and regularly socking money away. [Sadly baby boomers are going to find life tougher than they have ever known it]
Housing glut continues
Observer: Estate agents fear collapse in rents as 'reluctant landlords' flood the market
Can't sell for an inflated price: can't let for an inflated price. How the cards are tumbling. I would really like to meet Zaza Patterson in Winchester though. Mind you, I wouldn't know whether to say "Good morning, could you tell me the state of the rental market at the moment," or "Darling, I love you".
Release the Keynes
Observer: Tories' economic medicine would sink Brown's patched-up life raft
Here is one to provoke discussion/angry rebuttals. Some interesting points and comparisons with the 80s, also figures on national debt, notably the size of Germany's, an acutely relevant figure apropos Steinbruch's opinion.
Has anyone seen my equity?
Times: 10 years of house price gains could be wiped out
Millions of homeowners who have been climbing the property ladder since 1998 could find themselves unable to trade up by the end of this downturn, new figures show. Exclusive research for The Sunday Times shows that those who bought ten years ago will be perilously close to the mortgage “danger zone”, which brokers say applies to anyone with less than 25% equity in their home. Mortgage deals have become more scarce for those with a deposit of under 25%. Those who bought at the top of the market in 2003 will be deep in negative equity, owing 115% of the value of their home — a huge fall from the 17% equity they hold now.
Nice cut-and-paste
YouTube - aluntube: Crash Gordon Saves The World From Boom & Bust
A quick reminder of the extent of Gordon "Canute" Brown's self-belief
Major talks some sense
BBC: Ministers 'over-cooking' downturn
Sir John said: "If we continue borrowing like this, the world will be coming out of recession and we will have a huge amount of borrowing that will force up interest rates. "In three years' time, as the world comes out of recession, in the United Kingdom we will have higher interest rates, we will have higher national insurance contributions because the government have already implemented that, and we will have higher taxes."
Brown's economic plans are not working
Guardian: Pound slips below euro on Britain's high streets
The government is facing a growing backlash over its rescue package for the economy after the pound slumped in value. Tories and Lib Dems laid the blame for the pound's collapse at the door of Brown. Philip Hammond, shadow Chief Secretary to the Treasury, said the Brown's decision in the pre-Budget report to let borrowing soar had severely damaged - rather than boosted economic confidence. Vince Cable, the Lib DemTreasury spokesman, said that while the immediate cause of sterling's fall had been the rapid drop in interest rates and the expectation they would drop further the reason the cuts had been necessary was the result of the government's failure. 'Behind it all is a sense that we are a weak economy with a much bigger housing bubble than other countries".
The popular tax-free schemes have borne the brunt of cuts
Times: Isa savers hit hard by rates squeeze
Britain's biggest banks and building societies have punished Isa savers more than ordinary accountholders since interest rates started to fall, according to new research. The research comes as the government is coming under growing pressure to do more to help hard-pressed savers, having pumped billions into the banks only to watch them fail to play fair by passing on rate cuts. “With rates on cash Isas as low as 0.2% in one instance it makes sense to check that your current deal is still competitive but make sure that you don’t lose the tax-free status if you decide to transfer to a new provider.”
The rental market MUST be fine.
West Lothian Herald & Post: 50% Discount On Your First Month Rent
"Tenants! 50% discount on your first months rent, free contents insurance, and a free bottle of wine to celebrate!" How could anyone refuse such an offer? I'll take two please.
When the oil & money runs out
powerofcommunity.org: ...the best "short history of Peak Oil" that I have seen anywhere!
Not seen this film but it looks intriguing. Off-topic but makes you wonder why we worry so much about a recession. "In the early 1990's Cuba experienced a sudden and dramatic loss of petroleum and trade... What happened? People would have starved were it not for quick action by the government to ration food (calorie amounts were established based on United Nations research). The government encouraged food to be planted anywhere there was vacant land. Havana now produces over 50% of their food from within the city. Less densely populated towns are producing from 80-100% of their own food. Since chemical fertilizers were no longer used, Cuba sought guidance from organic farming experts from Australia.. People are much healthier now from all of the walking and biking that is now the norm."
US Auto Bailout Dead?
cnbc: US Auto Bailout Dead?
US Auto Bailout Dead? The $14 billion bailout deal for the Big Three US automakers failed to pass the Senate Friday. Howard Wheeldon from BGC Partners considers the state of the deal.
The global stock market could be stuck in its current bear-market trend until 2012 and beyond, but n
cnbc: Charts: Bear Market Until 2012 - How to Trade It
The global stock market could be stuck in its current bear-market trend until 2012 and beyond, but next year could give investors a strong bear-market rally to trade, Sandy Jadeja, chief market strategist at ODL Securities, told CNBC.com.
The global stock market could be stuck in its current bear-market trend until 2012 and beyond, but n
cnbc: Charts: Bear Market Until 2012 - How to Trade It
The global stock market could be stuck in its current bear-market trend until 2012 and beyond, but next year could give investors a strong bear-market rally to trade, Sandy Jadeja, chief market strategist at ODL Securities, told CNBC.com.
Sterling's torrid run against the euro continued today, with the currency sinking to another record
telegraph: Sterling's torrid run against the euro goes on
The pound slipped to as low as 89.40p against the euro and is now down 21pc from the start of the year, when you needed 73p to buy a euro. Analysts reckon the news coming from the UK economy, reinforced today by a grim trading update from HBOS, remains worse than that from Europe. Figures earlier this week revealed that industrial production slumped far more than expected in October, and news from the high street has been dominated by a closing down sale from veteran retailer Woolworths.
Oil prices plummeted Friday as concerns increased over energy demand in the slowing global economy.
cnbc: What the Pros Say: Oil Plunging to $10
If Russia announces a bigger-than-expected joint production cut with OPEC next week, it may cause oil prices to fall,
Goldman, Once Warning of $200 Oil, Sees $45 in 2009
cnbc: Goldman Sachs' energy equity research team, which predicted a crude oil spike to $200 a barrel earlier this year, slashed on Friday its 2009 forecast to just $45 as demand deteriorates.
We expect that an additional 2 million barrels per day (bpd) of OPEC supply cuts will be required in 2009, along with a 600,000 bpd reduction in Non-OPEC production, in order to rebalance the market," the team led by Jeffrey Currie wrote
Saturday, December 13, 2008
Time to put rates back up then Merv me old son
The Times: Pound’s plunge is expected to limit cuts in UK interest rates
"Members of the Bank’s monetary policy committee (MPC) have in the past said sterling’s performance still plays a role in rate decisions and some of those concerns may emerge this week."..............so whats it to be?
33% house price reductions to try and attract buyers - make it 50%
FT.com: Estate agents stage knockdown sale
Estate agents are taking lessons from the retail sector with a Christmas sale that has seen as much as a third knocked off some homes to stimulate transactions in the stalling market.
Brick wall dead ahead
Reuters.com: Global car crisis far from over, executives say
PARIS (Reuters) - Top European car makers warned of a bleak 2009 as signs grew the deep crisis in the auto sector went far beyond the U.S. industry's life-or-death struggle.
The first credit-crunch riots
Independent: Are the Greek riots a taste of things to come?
Bringing together youths in their early twenties struggling to survive amid mass youth unemployment and schoolchildren swotting for highly competitive university exams that may not ultimately help them in a treacherous jobs market, the events of the past week could be called the first credit-crunch riots. Greece's riots are a sign of the economic times. Other countries should beware.
Who done it?
FT: Four strong contenders for mistake of the year
Thoughts from John Authers, a serious player in the financial journalism world, on who is responsible for the current world crisis. US Govt 3 - ECB 1. (If you can't read the article, delete all the FT cookies from your computer.)
Big brother goverment are panicking - communism is back
Guardian.co.uk: Angry banks resist Darling's demands for release of lending information
"Banks say they are increasing lending but the anecdotal evidence from people and firms is that loans are hard to come by," said a Treasury source.
Job cuts continue to mount in December as recession deepens.
CNN: December layoffs exceed 100k
In terms of job losses, 2008 is on pace to be the worst since 1982, according to Bureau of Labor Statistics data. But if Baumohl's 600,000+ prediction is accurate, 2008 could show the greatest number of layoffs since 1945, when the economy shed 2.75 million jobs.
"It's not all work, work, work here! In fact ... "
Scotsman: HBOS rewards 100 branch managers with New York trip
STRICKEN bank HBOS is to fly 100 branch managers and their partners to New York to reward their performance during a year that has seen it plunge to the brink of collapse, it emerged today.
Why ?
Daily Mail: £4bn aircraft carriers delayed by two years as MoD cuts costs amid funding shortfall
Why is this labour intensive public project being cancelled if the UK needs a fiscal stimulus which will be provided by government borrowing? Also, just to mention a quick point, all of the losses written down by banks come out of future taxation. Essentially every write-down ends up as a reduced tax bill. A suspicious thought occurs, that the "fiscal stimulus" will in fact only maintain current government spending in the face of declining tax revenue. And just to repeat myself, the banks will not be providing any revenue to the government for decades in the future, their losses are offset against tax not just this year, but onwards. Cancelling these ships is in contradiction to stated government policy and is very suspicious.
Queue here for sound investment advice
Dilbet: Dogbert: Financial adviser
http://dilbert.com/dyn/str_strip/000000000/00000000/0000000/000000/30000/4000/800/34812/34812.strip.gif
Trade secrets
ChrisMartenson: Fed Refuses to Disclose Recipients of $2 Trillion in Lending
Today the Federal Reserve effectively freaked out in the foxhole and declared the spirit of democracy, if not the rule of law, to be disposable conveniences of better times. In response to a freedom of information act request by Bloomberg News for the names of the institutions receiving public money, the Fed invoked an obscure rule to block the release of this information.
I think this is the preferred option
Forbes: Dollar Devaluation To Fix The Great Recession
World currencies should be devalued overnight. It can be done on a country-by-country basis, but a coordinated devaluation would work best. A devaluation of 30% would raise the dollar value of all assets by 43%. A $200,000 home with a $230,000 mortgage would become a $286,000 home with the same mortgage. Presto! The homeowner who was $30,000 upside-down now has $56,000 equity and a good reason to make his payments. Both the homeowner and the bank are immediately better-off.
House prices are too high - dumbos
MailOnline: HBOS loses $3bn in past two months as property market implodes
The turmoil in the financial and property markets has cost the stricken Halifax Bank of Scotland a mammoth £3billion over the past two months, the institution revealed yesterday.
House of cars is coming down just like the housing market
U.S.News.com: Auto Bailout Fails, GM Hires Bankruptcy Lawyers
General Motors Corp. has hired bankruptcy counsel and restructuring advisers." Chrysler took a similar step last week
[theirs] Who, exactly, was crazy enough to purchase securities with a yield of zero (or less)?
EWI: T-Bills Are Telling You What The Media Won't
Leading on from MGs post yesterday :"Was the $32 billion supply of ZERO-YIELD securities available at today's Treasury auction enough to meet the demand?"
'nuff said - 1
EWI: A Picture Of Treasury Yields Is Worth One Word: DEFLATION
Leading on from MGs post yesterday, this is one of two on Treasuries that i am posting. This deals with the 30-year bond.
Don't worry they wont invoke it!!!
BBC News: Abbey explains mortgage warning
Abbey sent a letter telling mortgagors if their home's value had fallen so the amount borrowed was more than 90% of its value they could have to pay a lump sum to reduce it. "After it sent the letters the Abbey said it had no plans to invoke the clause forcing borrowers to do that." - er then why send it?
Fantasy Island
Telegraph: Britain leads the world... at peddling fantasies
In one respect, the PM measures up to his claim to be leading the world: he has been the principal peddler of the prevailing fashion for fantasy over hard truth. According to his fantasy, ever more of the borrowing that got us into this mess will get us out of it, and loading the economy with future higher taxes will not inhibit the forces of private enterprise as they pull us to recovery. This fairy tale is the true threat to prospects of future recovery.
The reality on the ground
TimesOnline: Grim holidays loom with spread of redundancy
A survey undertaken by the Recruitment and Employment Federation, a leading trade body, indicates that almost half of its client companies are delaying redundancies until the new year
Debt Nation UK
Telegraph: More than four million still paying their credit card debt from last Christmas
Ahead of one of the busiest shopping weekends of the year, figures showed that one in 10 adults – the equivalent of 4.5 million – had still not paid off their credit card debts from a year ago despite the looming recession. Experts warned that a further spending spree over the Christmas period would bring misery to thousands of borrowers in the New Year as they faced the task of paying off their credit cards while family finances are stretched by the economic crisis. The figures show an extra 250,000 people aged between 25 and 34 are still trying to clear their credit cards from last Christmas, compared to the number who were a year earlier.
Handbags at Dawn
Deep Glamour: Fashion Recession
"It's not just the luxury stores. Judging from these auction results, the economic contraction is hitting the market for vintage fashion, including such supposedly sure investments as Hermès bags. This wine-red crocodile Kelly bag from 1990 was expected to go for £8,000 - £12,000. It sold for £4,000, with a single bid. Surely the much less classic It bags of recent years will find their prices crashing even further." (Don't ask why I was surfing on www.DeepGlamour.net at 2am....)
Even in perfect lab conditions, markets tend towards bubbles
Atlantic Monthly: Pop Psychology: Why asset bubbles are a part of the human condition that regulation can't cure
For more than two decades economists have been running this experiment. They take a bunch of volunteers and give each person money and bonds to trade with. The bonds have a risk-free dividend and a clear fundamental value. All participants are given the same information, but they can’t talk to one another and they interact only through their trading screens. Then the researchers watch what happens. Because the bond has a clear dividend, the trading price should stick close to the expected value. But that’s not what happens. Again and again, in experiment after experiment, the trading price runs up way above fundamental value. Then it crashes. Bubbles happen, even in the most controlled conditions.
one man and his ego
bbc i player: house trader
Is this the David Brent of Northern Ireland real estate? It is an hour long but well worth the watch and it is about houses. I have been stalking your site here for years and this is my first thing to post. When I say stalking, I have no photos of you; too indolent. Please enjoy the bit about his car...
$1,000 per WEEK for the Nanny?!!**?!
Wall Street Journal: When the Going Gets Tough, Some People Lay Off the Nanny
Her employers, she explains, "have busy lives" that include volunteering at school, going to the gym, visiting the chiropractor and getting various beauty treatments, like facials, manicures and pedicures. Later this month, however, this household chief operating officer will fall victim to downsizing. She says her employers tearfully informed her that her $1,000-a-week position is being eliminated. "They told me they had to cut expenses 75%," says Ms. Jacobo, whose employer declined to be interviewed. "I am heartbroken." People unaccustomed to doing their own housework are dealing with dirty laundry and mowing their own lawns
It's that ole Devil called Synthetic CDO again....
NYTimes: From Midwest to M.T.A., Pain From Global Gamble
“Every three months you’re going to get a payment,” he promised, according to a tape of the meeting. But would it be risky? “There would need to be 15 Enrons” for the district to lose money, he said. The board and four other nearby districts ultimately invested $200 million in the deal, most of it borrowed from an Irish bank. Without realizing it, the schools were imitating hedge funds. Half a continent away, New York subway officials were also being wooed by bankers. Officials were told that just as home buyers had embraced adjustable-rate loans, New York could save money by borrowing at lower interest rates that changed every day.
Will this stop HPC?
Reuter: UBS to freeze $6 bln property fund
Swiss bank UBS said on Friday it had frozen a $6 billion real estate fund as it could not keep up with redemption requests from wealth management clients.
there's one (re)born every minute...
Guardian: Failed buy-to-let guru back with new scheme
Buy-to-let evangelist Jim Moore - whose Inside Track Seminars (ITS) and Instant Access Properties (IAP) firms went bust earlier this year, leaving wannabe "millionaires" as creditors - is back with a new "minimum investment and maximum return" property deal.
OPEC member default on its foreign debt
The Associated Press: President says Ecuador will default on debt
Another blow to the US & European banks who gambled and lost. Decoupling, decoupling, did I hear decoupling????..............silence..............
Friday, December 12, 2008
More of the same
Acadametrics: FT House Price Index
Nice to see "negative growth" in all regions!
First Houseprices, now US gov Bonds, Bubble alert
TheBigPicture: The Zero Yield Economy
At auction, Treasury sold $27 billion of three-month bills at a discount rate of 0.005%. This is the lowest yield since it starting auctioning the securities in 1929. Just as astounding, the U.S. sold $30 billion of four-week T-bills, at zero percent for the first time ever (4 week treasuries have been around only since 2001).
Global slump continues
Bloomberg.com: Russians Buy Jewelry, Hoard Dollars as Ruble Plunges
Russians are shifting their cash into foreign currencies and buying things they don’t need as the economy stalls
Get any deposits back now if you can!
reuters: Fads owner puts trading units in administration
Strategic Retail Plc, the AIM-listed owner of the Fads home improvement chain, said it would appoint administrators to three of its trading subsidiaries and has requested the suspension of its shares. The three units concerned are Fads (Trading) Limited, Leveys (Fads) Limited and Texstyle World (Fads) Limited.
council layoffs, hmmm
BBC wales: Council to cut staff costs by 10%
A local authority says it needs to reduce staffing costs by 10% - with some of its 4,500 workforce to be offered voluntary redundancy. Denbighshire council is consulting on plans to save an estimated £5.7m over the next two financial years. It says council office accommodation could also be cut back.
Slowdown deepening - Still
Bloomberg.com: China’s Economic Slowdown Is Deepening, Officials Say
Dec. 12 (Bloomberg) -- China’s economic slowdown is deepening, with overcapacity in almost all industries
Is Britain the next Iceland?
Economist: Lessons from Iceland | Cracks in the crust
"Relative to Iceland’s size, the debt to IceSave depositors is bigger than the reparations demanded of Germany by the Treaty of Versailles. Iceland was uniquely overextended, but other countries, too, have big banking industries relative to the size of their economies supported by lots of borrowing. Britain is one. The balance-sheet of Britain’s banking system, at 450% of GDP, was half the (relative) size of Iceland’s at the end of last year. But that is still high. Like Iceland, Britain does not have a global reserve currency, such as the dollar or the euro, to draw on if it needs to act as lender of last resort. Among larger European countries, the British government’s exposure to its banking sector is by far the highest."
Auto Bailout lifeline from Bush?
Bloomberg: Bush Willing to Use TARP for Auto Aid, Perino Says
A disorderly bankruptcy by the automakers would be a “body blow” to the U.S. economy, Perino said.The Bush administration will consider using money from the fund intended to rescue U.S. financial markets to prevent the collapse of the nation’s auto companies, the White House spokeswoman said. The Bush administration had warned of a million lost jobs if the industry imploded. (Collapse really would precipitate a HPC in Chicargo).
Your weekly dose of schadenfreude
This Is Money: Buy To Let collapse
One man has seen his buy-to-let empire vanish months after he could have sold it for a £500k profit. Former factory worker Rajnikant Raja took just three years to amass a buy-to-let property empire of 40 flats and houses, remortgaging each one to get the deposit for the next. The properties were worth £5.4m at their peak two years ago . But he could lose them all within a matter of weeks. Their value is falling like a stone. Raja cannot afford to keep up the mortgage payments and so far his bank has repossessed five properties. The rest are in negative equity. His £19,000 arrears is expanding by £2,500 a month, as homebuilders flood the market with rental properties, driving rents down. Raja also has unsecured debt (credit cards, loans and overdrafts) amounting to £120,000.
Sell, sell, sell.......
Propertyweek.com: Dubai's housing market 'reaching tipping point'
Dubai’s housing market could be approaching ‘tipping point’ as investors continue to exit the market and the availability of debt dries up, according to HSBC.
Hissssssssss
FT: FT index adds to house price gloom
House prices in England and Wales fell by 1.7 per cent in November, according to the FT House Price Index, registering the ninth consecutive monthly drop and wiping out all housing equity earned for the past two years. Meanwhile, prices in London, which earlier this year appeared to be relatively resilient, appear to be dropping more rapidly. In the three months through to October, prices fell at an annualised rate of 4.6 per cent.
Financing Britain is an issue.
Spectator: The true extent of Britain's debt
How much is Britain’s true national debt? Gordon Brown says 37% of GDP, the ONS says 43% of GDP – but this is just government debt. The reason Britain is in so much trouble is that our corporate and household debts are huge. It is the combination that makes us such a credit liability – but no one has ever put together a combination. Until now...
Santander cuts 1,900 UK bank jobs
BBC: Santander cuts 1,900 UK bank jobs
Spanish bank Santander has said it will cut 1,900 jobs in its three UK businesses - Abbey, Alliance & Leicester and Bradford & Bingley.
This gets worse by the minute
Telegraph: US car bail-out: General Motors calls for UK Government rescue
General Motors, which employs 5,500 people around the UK, is in talks with the British government to secure cash to allow it to continue operating in what the car maker admits are "critical" conditions.
this is a lot like GBs ponzi scheme
bloomberg: Madoff Confessed $50 Billion Fraud Before FBI Arrest (Update1)
Bernard Madoff confessed to employees this week that his investment advisory business was “a giant Ponzi scheme” that cost clients $50 billion before two FBI agents showed up yesterday morning at his Manhattan apartment.
700 jobs go at Woolworths distribution company
liverpool echo: 700 jobs go at Woolworths distribution company
Hundreds of workers at Woolworths’ distribution division were made redundant today after administrators failed to find a buyer for the business.
Eight month break deal for Vauxhall workers
liverpool echo: Eight month break deal for Vauxhall workers
VAUXHALL is offering workers an eight-month career break because of falling sales. Workers opting for the sabbatical will be paid 30% of their salary.
Just when you thought it couldn't get any worse
Dailymail: Just when you thought it couldn't get any worse
British jobs at risk as GM fails to secure bailout Bank shares plunge as HBOS writes off £2.8bn Sterling slumps to a new all-time low of €1.1211
The Noose Tightens
Times Online: Connells to offload its stake in Rightmove
Connells, Britain's second-biggest estate agency chain, is poised to sell its 21 million shares in Rightmove, the website, amid fresh signs of faltering confidence in the property market.
MJ Gleeson: chief exec quits and 70% of staff axed
Contract Journal: MJ Gleeson: chief exec quits and 70% of staff axed
MJ Gleeson continues to seriously implode with the news that its work force is being cut from 224 to just 50 while chief executive Paul Wallwork finds himself out of a job.
What the sterling crisis means for you
MoneyWeek: What the sterling crisis means for you
"Our so-called government may think it can solve Britain's economic problems via borrowing like crazy, and letting sterling collapse into the bargain. But it's quite wrong. As the Germans are now telling Gordon Brown, his mistaken approach is actually storing up a lot more trouble for the future... "
Capitulation?
Home.co.uk: Sellers Race to Cut Prices
The UK house price correction is gathering pace on the open market. Vendors are cutting market house prices more aggressively in all parts of England and Wales in the knowledge that buyers with cash or mortgage finance are still in very short supply and may be so for a long time.
Horses make a comeback!
REUTERS: Auto bailout fails
"GM has probably got until January and I would suspect the next step would be that GM will provide a date and say that at this date we will file," Merkle said. The White House called congressional inaction a breakdown and said it would evaluate its options. "It has now fallen to the president to take action," said Sen. Carl Levin, a Michigan Democrat who has spearheaded efforts for a month to get help for Detroit. Bush should "move now," said Republican Sen. George Voinovich of Ohio, adding, "The dominoes are already falling" throughout the United States." Reid and House Speaker Nancy Pelosi called on Bush to immediately explore short-term financial help, including tapping a $700 billion fund created in October for the Treasury Department to assist the financial services industy
Bankrupt Banks
Reuters: Jim Rogers calls most big U.S. banks "bankrupt"
"What is outrageous economically and is outrageous morally is that normally in times like this, people who are competent and who saw it coming and who kept their powder dry go and take over the assets from the incompetent," he said. "What's happening this time is that the government is taking the assets from the competent people and giving them to the incompetent people and saying, now you can compete with the competent people. It is horrible economics."
Ramping the market up for the sheople.
daily mail: Buyers tempted back into the property market as house prices continue to fall and mortgage lending bounces back
The first signs of a recovery in the property market were confirmed by mortgage lenders yesterday. The number of first-time buyers and 'homemovers', or those selling one home to buy another, rose between September and October. The news comes after figures from the Royal Institution of Chartered Surveyors this week showed the number of househunters has also risen for the first time in two years.
Speculating in currencies is so much fun - NOT!!
Timesonline: Airport passengers suffer a pounding as euro surges
"Thousands of private investors in Britain are joining institutional investors in betting that sterling has further to fall. Spread-betting companies are reporting a surge in the practice as clients, now banned from taking down bets on banks, switch their attention to the currency." ...nice to see those pesky 'short' sellers have found somewhere new to ply their trade. It still amazes me that this practice is allowed, when it affects everyone in the long-term, for short term gains for the few. My mistake it's the pinnacle of socialist capitalism.
I think they call it synergy.
BBC: Bank of America cuts 30,000 jobs
Bank of America has said it plans to cut between 30,000 and 35,000 jobs over three years following the completion of its takeover of Merrill Lynch. The reduction could affect about 11% of the combined firms' 308,000 workforce. Bank of America said the move would reflect both post-merger efficiency savings, and "the weak economic environment" which had hit business.
Down the U-bend
Telegraph: Buy on the 'U' to profit from commercial property
"Another interesting income opportunity is emerging – in commercial property. There are at least three reasons why 2009 could lay the foundations for a decent commercial property revival. The first is the 7.5pc yield. The second is timing – entering the market while prices are still falling is the favoured approach of seasoned investors because that is when the best properties become available. The third is the way in which the collapse in sterling has made UK commercial real estate a bargain for buyers with dollars, euros or yen. In each of these currencies UK property has fallen by 50pc since June 2007." – That all sounds nice, but where is the money going to come from?!?
The safest banks in Europe? Maybe not....
Telegraph: Switzerland may have to print money to stave off deflation
The Swiss National Bank has cut interest rates to 0.5pc and opened the door for emergency stimulus, becoming the first country in Europe to flirt with zero policy rates. The banking sector makes up 20pc of Swiss GDP, leaving the country extremely exposed to the credit crisis. The liabilities of Credit Suisse and UBS are equal to seven times national GDP. This has echoes of the situation in Iceland before the country collapsed, although Swiss banks have a much better mix of assets. "The crucial difference is that the Swiss own half a trillion dollars of external assets. They have a current account surplus of 16pc of GDP. This is their ace in the hole. If push ever comes to shove, the Swiss taxpayers have the money to pay."
More NuLab ideals come unstuck
Times: Council ghettos may return as recession kills mixed estates
Housing associations are to stop building mixed estates of privately owned and social rented homes, prompting fears of a return to Sixties-style council ghettos. For the first time in 20 years, new “affordable” estates of hundreds or even thousands of homes will no longer include houses for private sale because of the credit crunch. Housing associations already had 10,000 homes for private sale or shared ownership that they were unable to shift because of the credit crunch. These will now be turned into rented homes for those on council waiting lists and those on low incomes such as key workers and would-be first-time buyers. In addition, thousands more social homes will be built.
Germany resolves to tell it how it is,
The Herald: Economic rift with Germany escalates
Despite Berlin's attempts at calming troubled waters, Mr Kampeter last night simply fuelled the international row. He said: "After years of lecturing us on how we need to share in the gains of the uncontrolled financial markets, the Labour Party can't now expect us to share in their losses." Sounds familiar. I almost wish I was German. Almost.
Thursday, December 11, 2008
Recovery is always 6 months away...
guardian.co.uk: Global growth 'to hit 60-year low'
The Barclays Wealth Signpost report said that the first half of 2009 is going to be "a long, hard slog". Recovery will start in the second half of the year but will vary geographically.
Job anyone?
CNN: 'Wanted: Bank failure specialist.' Pays $156K
Hardly a day goes by without an announcement from a big company taking an axe to its payroll. But guess who won't be laying off people anytime soon? The Federal Deposit Insurance Corporation. Faced with what the likelihood of even more bank failures in 2009, the nation's top banking regulator has ramped up its hiring in recent weeks.
The bottom is reached, again!
FT.com: Banking in New York.
The last bastion of the U.S. economy has collapsed. The U.S. economy will contract by 4.5 percent in the current quarter. The ugly recession accompanies us into the next year," said Harm Bandholz, an economist at UniCredit Markets & Investment
A little Optimistic, one hopes.
Findaproperty.com: Market Will Bottom Out In Spring: Hamptons
No recovery until 2010, we'd all better rush in now to secure the bargains. What are these people on, do they not understand the coming recession, unless ofcourse they are waiting for buyers from the eurozone to take up all these lovely "cheap" bargains. (in euro terms, properties are around 40-50% cheaper than 2007, for dollar purchasers 50-60% and for the British saver 20% - rip-off britain continues apace).
Damian Green's arrest was nothing - Latvia shows Gordon how it's done
Wall Street Journal: How to Combat a Banking Crisis: First, Round Up the Pessimists
Hammered by economic woe, this former Soviet republic recently took a novel step to contain the crisis. Its counterespionage agency busted an economist for being too downbeat. "All I did was say what everyone knows," says Dmitrijs Smirnovs, a 32-year-old university lecturer detained by Latvia's Security Police. The force is responsible for hunting down spies, terrorists and other threats to this Baltic nation of 2.3 million people and 26 banks. Now free after two days of questioning, Mr. Smirnovs hasn't been charged. But he is still under investigation for bad-mouthing the stability of Latvia's banks and the national currency, the lat. Investigators suspect him of spreading "untruthful information." They've ordered him not to leave the country and seized his computer.
A must watch (4 mins) for all HPC regulars
youtube: Real Estate Downfall
Hopefully the link will take this time - if not see - uk.youtube.com/watch?v=bNmcf4Y3lGM (I presume this one has not already been posted)
BREAKING NEWS: Insane buyer found for brooky close.
liverpool echo: Jimmy Corkhill actor: I'll buy Brookside
The 53-year-old today told of his plans to raise around £600,000 for the available houses. The actor who played bad boy Jimmy Corkhill said he might transform the 13-house close into a tourist attraction. Because of the credit crunch the asking price for Brookside Close in West Derby has fallen from £2.4m to £600,000.
goes from bad to worse every day
liverpool echo: Getrag Ford transmission plant at Halewood shuts for a month
The Halewood plant, which makes gear boxes for Ford Transit vans, employs about 1,200 staff, including up to 800 production staff. They will start their traditional Christmas break a week earlier and not return until later then normal on January 12. A worker at the site, who asked to remain anonymous, said they were also told by management today that on their return the whole site will work a four-day week.
daily job loss news from Me...
bbc: Engineering firm 'lays off' staff
Three hundred of the company's 485-strong workforce will be laid-off for a week on Monday 15 December. This will be followed by another four weeks without pay in January and February. The Easter holiday week is also being brought forward to January.
The Euro Bubble
Telegraph: The eurozones weakest link starts to crack
Been refusing to buy Euros with Sterling for 3 months now. Looks like a bubble that will never bust.
yet another contest to win a house!!! cant sell then raffle
home raffle via fox news: Family Raffling $1M California Home
There are two ways to enter the Tracy Home Giveaway Contest either Online or By Mail In either case a complete Contest Entry must include the following: Completed Entry Form $150 Entry Fee Completed the Skill Question
Casinos were always seen as recession proof!! just goes to show
review journal: Gaming revenue dives again
It just went from bad to worse. Nevada gaming revenues tumbled 22.3 percent in October, the single largest monthly drop in state history
Out of fying pan into deep fat fryer with slippy burning hot sides
reuters: Recession to worsen, deflation a risk
The "nasty" U.S. recession will tighten its grip next year as unemployment rises and weak home and stock prices imperil consumers, finance firms and debt-laden businesses, a UCLA Anderson Forecast report released on Thursday said. Additionally, a sustained retreat in prices for goods and services is a very real possibility that would further drag on the economy, according to the forecasting unit's report. "Where only last quarter we were worried about inflation, we are now worried about its very rare opposite: deflation," the report said. Falling prices would cut demand and discourage employers from hiring.
How can we expect anything but inflation in the future
Telegraph: Value of pound falls to 28-year low
"Mr Darling has refused to tell MPs how much further sterling would have to fall before he became worried about the value of the British currency. " ...I imagine he ,GB and Lord Mandy will keep it under their hats until it is so low, perhaps 1pound buying 80euro cents, before they bring it up. Making a case that joining the euro is the only possible option, by which time GB will have bought sterling with all his euros bought from selling the countries gold in 2000, and sell himself as a financial wizard for making the country so much money. Then the real pain will hit the UK, as all fiscal control is removed. Even though, and I hate myself for saying this, as I still have savings in sterling, removing control of interest rates from vote obsessed politicians may not be all that bad.
spreads like a virus all because of a housing boom!!! They said it would never happen!!
bloomberg: Swiss Central Bank Cuts Rate to 0.5%, Recession Looms
The Swiss central bank cut its interest rate to a four-year low of 0.5 percent and said further measures are possible as the economy faces a recession that may be the worst since 1982.
Stock markets might not bottom until 2014
MoneyWeek: Stock markets might not bottom out until 2014
Obama's 'New Deal II' may well result in a long bear-market rally. But his efforts will ultimately come to nought. Ballooning government debt will hit the dollar and prompt a massive share sell-off – on both sides of the Atlantic.
Consumer Survey Shows Lower Inflation Expectations
Bloomberg: U.K. Inflation Expectations Drop the Most Since 1999, BOE Says
U.K. consumers' predictions for inflation in the next year recorded the biggest drop since at least 1999 in November as the recession intensified, a survey for the Bank of England showed. The median forecast on increases in consumer prices for the coming 12 months fell to 2.8 percent, compared with 4.4 percent in August, the central bank said today in London. That's the biggest drop since the quarterly survey began nine years ago. GfK NOP surveyed 2,065 people from Nov. 13 to Nov 18.
Irwin Stelzer nails it!
Telegraph: Gordon Brown must blame himself, not the USA
Enough! It's time to put an end to Gordon Brown's ridiculous blame game. As the Prime Minister tells it, Britain's woes started in America. Like some strain of flu, America's problems found their way across the ocean to London, and from there to the rest of the British economy. Cheers from the Left, eager to rubbish America and to resurrect their leader's reputation. It is beyond question that Britain's problems stem in part from its fractured regulatory system, with responsibility split between the Bank of England, the Financial Services Authority, and the Treasury. A close study of the relevant documents fails to reveal that this system was forced upon Brown by the US authorities. No, it sprang full blown from the brains of Chancellor Gordon Brown and his sidekick, Ed Balls
'Novel' is good, right?
Bloomberg: Treasury Studying ‘Novel Approaches’ to Sell Debt
Treasuries are in such high demand that investors are lending cash for next to nothing to obtain the securities as collateral through so-called repos, which dealers use to finance their holdings. The problem is many parties involved in the repurchase agreements aren’t delivering the bonds because there is no penalty for not doing so, causing “fails” to exceed $5 trillion in the week ended Oct. 22, according to the Federal Reserve Bank of New York.
Sounds like good sense
Times: Germany attacks 'depressing' UK economic rescue
Mr Steinbruck appealed for calm, warnging that there was no silver bullet for the downturn: "It is the yearning for the Great Rescue Plan. It doesn't exist. It doesn't exist! Dealing with an unprecedented crisis is a puzzle, a trial-and-error. Honestly, I don't know. Good article, I think this is crunch time and Germany is under pressure to prevent the Euro experiment from coming apart and rescue the Southern States, eg. Greece, Italy, Spain.
MEWing for living expenses
Guardian: Homeowners use remortgaging for day-to-day cash, says study
Most homeowners who remortgaged while house prices were going up did not blow the cash they raised but used it for the necessities of life, according to new research. Housing expert Prof Susan Smith said the credit crunch will now affect similar families who will not be able to use any equity in their homes to raise finance. The Durham University expert said remortgaging was even more popular than previously thought, and acted as a safety net for struggling families, rather than a way of funding big holidays or a new car. "The credit crunch is a welfare disaster for struggling households who have previously relied on the option to borrow up against the value of their home," said Ms Smith
Wednesday, December 10, 2008
The Banks are filling their boots! Greece here we come!
The Times: Cost of personal loans soars!
The cheapest loan available is now 8.2 per cent – that is more than four times the base rate at 2 per cent. Experts say that providers may actually be trying to price themselves out of the market as the availability of credit continues to be squeezed
Unemployment will shoot up after Christmas!
MoneyWeek: The silver lining to bad employment news
"Andy Miller, a major commercial real estate player with several million square feet of retail space, says that many of his retail tenants have told him they're going to shut down their stores after Christmas. Christmas is the most profitable time of the year for retailers. If Miller's right, they'll sell as much as they can leading up to Christmas, then they'll fire their staff and vacate their properties in the new year. It's not just retail properties closing down and firing employees. Miller says there's a crisis coming in all commercial real estate. He says it feels like a slow-motion car wreck. If a crisis in commercial real estate develops, you should anticipate some of the worst unemployment data since the Great Depression."
We're a laughing stock :(
BBC: German ridicule for UK policies
The German finance minister has launched an outspoken attack on the UK government's plans to help pull Britain out of the economic downturn. In an unusual breach of standard diplomacy, Peer Steinbruck attacked the UK's decision to cut VAT and raise the national debt to record levels. Mr Steinbruck said the UK's switch from financial prudence to heavy borrowing was both "crass" and "breathtaking". "All this will do is raise Britain's debt to a level that will take a whole generation to work off."
Infinite losses create quandary for government
MarketWatch: A bottomless pit of losses at AIG
Another layer to the onion that is American International Group Inc. has been peeled away, and again, what's underneath is not pretty.
Genetically modified animal feed for the UK
NFU: EU authorises GM soya imports
The European Union decision to allow imports of GM Roundup Ready 2 soybean is 'a very welcome step', the NFU has said. The Directorate General for Health and Consumer Affairs gave its approval last week, ensuring the continued availability of an important product for the UK animal feed industry.
Tin hats
CNN.com: 8 really, really scary predictions
Things are going to be awful for everyday people. U.S. GDP growth is going to be negative through the end of 2009. And the recovery in 2010 and 2011, if there is one, is going to be so weak - with a growth rate of 1% to 1.5% - that it's going to feel like a recession.
2009 will be a downer for the housing market
MailOnline: 'Unemployment landslide' looms as 40% of small businesses consider closing down
Workers must brace themselves for an 'insolvency epidemic' as British businesses go bust next year, according to a shocking new report.
Misplaced optimism will not change the downward spiral
Bloomberg.com: Worsening Spending Slump Paces ‘Scary’ U.S. Recession
Dec. 10 (Bloomberg) -- The biggest slump in U.S. consumer spending since 1942 will extend the recession and push the jobless rate to the highest level in a quarter century, according to economists surveyed by Bloomberg News.
There's going to be a recession!
BBC: Darling says recession now likely
Alistair Darling has admitted that the UK economy is likely to enter a recession, but expects growth to return "in the second half of next year". Describing the current economic situation as "difficult", the chancellor said continuing low interest rates would help the economy recover. Speaking to a key Commons committee, he added that deflation was not a risk.
The unionised wage - Detroit
New York Times: $73 an Hour: Adding It Up
[not directly hpc related] That figure — repeated on television and in newspapers as the average pay of a Big Three autoworker — has become a big symbol in the fight over what should happen to Detroit. To critics, it is a neat encapsulation of everything that’s wrong with bloated car companies and their entitled workers.
Guess what!? - Lenders are making it worse! How could it be worse?
The Mortgage Warehouse: Lenders make house price crash worse
According to the Royal Institute of Chartered Surveyors, it is the banks and mortgage lenders who are making the house price crash worse than it need be. In particular, the sale of repossessed properties at knock down prices has contributed to the claim by estate agents that their average sales have dropped to less than one a week. This is the lowest figure in thirty years and hints at further job losses in the sector. But I thought that this was just the market finding its own floor, enlighten me please!
Arm those presses!
Bloomberg: U.K. May Expand Toolkit to Halt Recession Slide
The U.K. government and the Bank of England are considering plans to pump billions of pounds into the economy as the bank rescue package and the lowest interest rates since 1951 fail to halt a slide into recession. ... The comments are the clearest sign yet that he is frustrated that banks are rationing credit even after a 50 billion pound ($74 billion) program to rescue HBOS Plc, Royal Bank of Scotland Group Plc and Lloyds TSB Group Plc.
Mortgage deferal not for BTL, second home or those with savings
This Is Money (Daily Mail and General Trust): No mortgage help for £16,000 savers
People with savings above £16,000 or second homes will not be allowed help from the Government's new safety net for homeowners, it emerged today. Buy-to-let properties and homes with a mortgage of more than £400,000 will be excluded from the scheme. Details of the plan were released by Chancellor Alistair Darling this afternoon as he appeared before the Treasury Committee in the Commons.
Oh dear. Oh dear. Oh dear. And the Duke too!
ThisIsMoney: Credit-crunched Candy Brothers slash yacht price
The Candy brothers are the latest yacht owners to vouch for the old maxim that yachting is like standing under a cold shower tearing up £20 notes. The pair are trying to sell their 146-foot boat Candyscape (below) at a massive discount. The brothers have spent millions refurbishing the vessel to their own design. One of the lavatories is lined in leather taken from antique Louis Vuitton suitcases. It is moored in Monaco, from where they chartered it at around £100,000 a week. The Candys aren't the first property magnates to suffer such problems with devaluing yachts. Earlier this year I reported that the Duke of Westminster had also put his elegant Edwardian motor yacht on the market for £2.5m - after he had spent more than £6m refurbishing it.
Blanchflower writes, Darling I'm leaving...
Guardian: David Blanchflower to step down from Bank of England next year
Professor David Blanchflower has decided not to renew his tenure on the Bank of England's monetary policy committee when his current three-year term expires next May, the chancellor, Alistair Darling, announced today. His departure will come as blow to the City and financial markets who think Blanchflower is the only MPC member who saw the recession coming and spent all this year urging his reluctant colleagues to make big cuts to interest rates. Blanchflower, a British-born academic who also teaches economics at Dartmouth College, New Hampshire, said in a letter released by Darling today that he thought external members should only serve one three-year term on the committee.
Times have gotta be tough when this stuff happens
Wall Street Journal: Modeling's Eileen Ford Cuts Price of Estate by 19%
Ford Models founder Eileen Ford, whose agency represented some of the biggest modeling names for decades, this week cut the price of her New Jersey mansion by 19% to $6.5 million, after it went unsold at $8 million for two years. Ms. Ford's husband and business partner, Jerry Ford, died in August at age 83. Their agency represented Lauren Hutton, Veronica Webb and Christie Brinkley, and some credit the Fords with key roles in establishing the modern modeling industry. The house is about 45 miles west of New York City, in Hunterdon County. The classic colonial estate, on a hill with views of the countryside, has seven bedrooms and six bathrooms on 20 acres.
Buy-To-Clean
Mail: Jan Moir gets an insight into a credit crunch hit Anthea Turner
'Oh, come on, you didn't really think I did all the housework, did you?' No, we didn't, Anthea. However, now that your husband Grant Bovey's buy-to-let empire and furnishing company have been repossessed by the banks, there seems to be a strong possibility that you'll soon have to 'We have huge profits that have yet to materialise,' he said recently.
And we not only saved the World...
Times: Gordon Brown left red-faced in Commons after world saviour gaffe
Faced by David Cameron's first question, on why his multi-billion-pound banks bailout had failed to filter down to the taxpayer, the PM replied: "We not only saved the world..." When Mr Cameron rose to his feet again, he couldn't resist the first of several gibes. "Well, it's now on the record..." he said, causing more hysteria. "He is so busy talking about saving the world, he has forgotten about the businesses in the country that he's meant to be governing."
First National Express, now General Growth Properties
Wall Street Journal: Dark Days for Mall Dynasty Built on Debt
Two board members of General Growth Properties Inc. marched into CEO John Bucksbaum's office to deliver a blunt message: It was time for him to resign. An internal investigation showed that Mr. Bucksbaum's family trust had violated company policy by making private loans to two company officers and failing to inform the board. The departure of Mr. Bucksbaum -- whose father and uncle founded the giant mall owner 54 years ago -- would mark an end to the family's management control of the company. General Growth's stock has plunged more than 97% in the past year, dragging down the Bucksbaum family fortunes with it. The Bucksbaums' 25% ownership stake, worth $3.2 billion just six months ago, is now worth $116 million.
Forget the MORI, etc polls, businesses up and down the country are voting "Sack the Government"
Property Week: Lord Oakeshott says banks have ‘virtually gone on strike’
Oakeshott said he first became concerned about the Icelandic banking situation six months ago. ‘Credit agencies were slow to pick up the problem, but the credit default swap prices were shouting from the rooftops that Icelandic banks were in trouble. 'They were signalling a 40% chance that they would go bust.’
How far will oil rise?
Market Oracle: Crude Oil Forecast 2009 - Time to buy
"No one could have imagined a little over 4 months ago with crude oil trading at $147, that crude oil would have crashed by 70% and be threatening to break below $40 so soon. Therefore this analysis seeks to to evaluate the prospects for crude oils future trend over the next 12months in determining whether crude oil today is a good buy or not."
Treasuries bubble danger
FT Alphaville: Treasuries bubble danger
Because foreign holdings represent a significant proportion of the stock of Treasuries outstanding, a collapse in Treasuries prices might soon be reflected in a collapse of the US dollar, with the accompanying threat of hyper-inflation in the USA and depression elsewhere. At that point, many investors might wish they still enjoyed the comparative calm of the ‘credit crunch’.
Gordon Brown saves the world at PMQs
Crown Blog: Gordon Brown saves the world at PMQs
If you like watching Gordon Brown tripping over his words - then this is for you
Back to 2000
Property Week: UK’s direct property investment down 55% on 2007
I thought it might be nice to post a news article about property prices. Apparently they went down.
Cheaper bills, now please: It's cold.
Telegraph: Energy firms 'could afford 20pc price cut'
British Gas won’t cut its prices until the spring despite new analysis showing that energy suppliers could afford to cut prices by almost 20pc within weeks.
Prices to continue falling
Telegraph: Home owners fail to benefit from rate cuts
'Seema Shah, a property economist at Capital Economics, said: "With the recession now taking hold, unemployment rising, and lending criteria still tight, new buyers will be searching for bargains. As such, they are more likely to add downward pressure to house prices rather than bid them up." '
Study identifies mortgage holiday proposals as "political manoeuvre"
mortgagestrategy: 2-year mortgage holiday could lead to debt nightmare
The government’s 2-year mortgage holiday could leave cash strapped consumers in a worse financial situation, mortgage services provider Exact warns today. The firm has done a study of the government’s plan to defer mortgage interest payments for two years and has slammed it as badly thought out and little more than political spin. With property prices nose-diving it says that deferring mortgage interest payments could mean that cash strapped borrowers just run up more debt against a property that is rapidly losing capital value.
4 phases to monetary collapse
Market Oracle: Financial System in Collapse, Credit Crisis Worst Yet to Come
The Initial Phase – Financial Crisis --- The Second Phase – Economic Crisis --- The Third Phase – Hyperinflation --- Final Phase – Monetary Collapse
Gordon Brown texture like sun
The Independent: Lenders launch counter-attack against Government attacks
"The Council of Mortgage Lenders (CML) has branded the Government's attacks on Britain's banks as "incoherent" as official data showed lenders had not passed on interest rate cuts in full to mortgage borrowers."
Oh Great!!!!
Timesonline: Pound sinks to record low as euro nears parity
"One London-based trader told Reuters this morning that some traders expected the euro to rise to 93p against the pound. “Technically, sterling is looking very heavy and the product of that is euro-sterling going higher,” the trader said. " When Sterling reaches parity with the euro does anyone think English companies will be able to match the pay of their European counterparts.......no, didn't think so.....deflation becomes hyperinflation very soon, cost of living goes through the roof, standard of living goes through the floor.
Bank Aid - A fundraising concert for banks? Or just more empty promises
Telegraph: Chancellor Alistair Darling considers new guarantees to get banks lending
Chancellor Alistair Darling is considering extending government guarantees to mortgages and business loans, in a further bid to get banks lending again.
Darling considers underwrtiting ALL commercial loans - Pure desperation!
Bloomberg: Darling Said to Consider Credit Guarantees to Spur U.K. Lending
'The measures would mark an unprecedented step by U.K. authorities to underwrite commercial loans after a rescue that gave the government stakes in HBOS Plc, Lloyds TSB Group Plc and Royal Bank of Scotland Plc failed to restart bank lending. The economy is sinking into its first recession since 1991.' Holy c*ap what's going to happen to Sterling now?
BOE expected to cut by another 1% as early as next month
Times: 0% interest rate on the horizon as economy shrinks twice as fast
Alistair Darling’s hopes that growth would resume in the second half of next year were hit yesterday by predictions that the recession could turn into a slump worse than that of the early 1980s. Experts said that the economy would shrink by 1 per cent or more this winter as it emerged that British industry is contracting at the fastest pace since 1991. Output from factories, power stations, mines and the North Sea plummeted in October by 1.7 per cent, leaving it 5.2 per cent down from levels a year earlier. The speed at which the economy is shrinking has doubled to at least 1 per cent in the past three months, from an already severe 0.5 per cent officially reported for the third quarter, according to the National Institute of Economic and Social Research.
(scroll down a bit)
reuters.com: PAYMENT WOES DEMOLISH "POSHEST BUILDER"
Robin Ellis Construction, the company known as "London's poshest builder", has gone into administration as the economic downturn hits the once-thriving market for construction work at the capital's prime residences. The company, established in 1984, had earned a reputation among the super-rich as specialists in conversions of listed period homes. Robin Ellis said the collapse was a "dreadful shock" and was brought about by a "climate of non-payment and slow payment by clients". The company, which turned over about 15 million pound a year, has made all 35 staff of Robin Ellis Construction and Robin Ellis Projects redundant.
Roll up! Roll up! get your bargains here
Times: Estate agents offer ‘bargains’ in Christmas sale
"The owners of more than 7,500 properties have been encouraged to slash their prices by as much as 30 per cent – although some have trimmed by as little as 3 per cent. " "Countrywide says that the Christmas bargain scheme, which it has been planning for several months, was intended to “kick-start local property markets” and was not prompted by Standard & Poor’s recent down-grading of the group’s credit rating. S&P asserted that Countrywide would run out of cash by the end of 2009." Sure - we believe you
Gordon Brown 0-- Ronald Mcdonald 1
the independant: Britain worse credit risk than McDonald's
Britain has become a worse credit risk than McDonald's and a host of other large companies, figures produced for The Independent reveal. The collapse in Britain's credit rating has taken place over the past two and a half months, since the Government underwrote the banking system and decided to spend its way out of recession. Investing in UK government debt is now almost twice as risky as buying McDonald's corporate bonds, according to the market in credit default swaps (CDS), which provides insurance for the buyers of such debt.
Half of 'rescued' borrowers still default
CNN Money: Half of 'rescued' borrowers still default
Another thing for Gordon to think about before he introduces any more hairbrained schemes! "Many modified mortgages in 2008 defaulted in 6 months, a top federal regulator says. A new study raises concerns over the quality of such loan adjustments."
Tuesday, December 9, 2008
That tough talking to the banks went well then....NOT!!!
Times Online: Abbey hikes mortgage rates and pushes up fees
Spanish owned Abby laughs in the face of Calamity Brown and shows a couple of well honed fingers to Darling, and oh while we're at it, if anyone thinks they can mess them around errming and arrhhing about borrowing their money, then they'd better be prepaid to pay for the privilege.
Ouch! That's got to hurt
Telegraph: Buy-to-let investors losing £6 million an hour
Landlords lost £52.8 billion of equity in the 12 months to October this year, according to the research by fund manager Managing Partners Limited. This equates to £144.77 million a day or £6 million an hour. London landlords have seen the biggest loss in equity from their properties, followed by the South-East and South-West. The shocking figures come after the Council of Mortgage Lenders warned that repossessions on buy-to-let properties are expected to rise amid falling rents and an oversupply of rental properties. It said the number of landlords falling behind on mortgage payments had risen by 50 per cent and that landlords were finding it more difficult to use selling as an exit strategy.
Sound Familiar: heads I win, tails you lose
Times: Fannie Mae and Freddie Mac bosses blame Congress for failure
"In written testimony submitted to a hearing of the House of Representatives' Oversight and Government Reform Committee, the four former chief executives of Fannie Mae and Freddie Mac said that the lenders were pressured by Congress to ensure that lower-income families could buy homes. At the same time, their regulator, the Office of Housing Enterprise Oversight, which later became the Federal Housing Finance Agency, did little or nothing to curb their increasing exposure to riskier loans, the former chief executives claimed. " Now where am I hearing this now ??
Decline in US and UK commercial demand
The Move Channel: commercial woes continue
Demand for commercial property in America has been severely impacted by the loss of thousands of jobs all across the country, with more losses predicted by the end of the year... Things aren't looking much healthier in the UK commercial property market sector. Commercial property capital values in the UK dropped by 6.6 per cent in November compared to figures from the previous month, according to new research. Hardly news to us but this acts as further punctuation in the course of the crash.
Property Information Questionnaire
HIP-Consultant.co.uk: Property Information Questionnaire (P.I.Q.)
The news with HIPs mentions this new PIQ. There does seem to be some more useful information which may help HIPS or put the final nail in their coffin.
Turnover and profitability is down on my business should I write to Gordon Brown?
BBC: Steel firm seeks aid from Brown
The chief executive of Anglo-Dutch steel giant Corus has asked UK Prime Minister Gordon Brown for government funding amid the global downturn. Corus head Philippe Varin said state help was needed to allow firms to avoid redundancies amid falling output. The scheme could be similar to the plan recently introduced in the Netherlands to pay up to 70% of workers' basic pay to allow retraining and paid down-time.
If Japan gets -1.8% growth, how much will GB get?
BBC: Japan sinks deeper into recession
Japan economy, the second largest in the world after the US, shrank by 0.5% in the quarter, for an annualised rate of 1.8%, significantly greater than expected.
Any other blow to BLT?
Telegraph: Buy-to-let investors face tax crackdown
Middle class buy-to-let investors who are failing to declare their earnings from rent payments should end up with a criminal record under recommendations from senior MPs.
Quick everyone - cheap houses to be had
Daily Tripe: Buyers tempted back into the property market as house prices continue to fall and mortgage lending b
One estate agent from Harrogate, North Yorkshire, said: 'Bargain hunters are in the market making cheeky bids.' Another estate agent, from Grantham, Lincolnshire, said: 'November was our best month of the year for new sales so perhaps the light at the end of the tunnel is still glowing.' Another agent said that 'realistically priced property' is attracting interest. He said 'realistic' means '20 per cent less than last year.'
Slump in the sun
Bloomberg.com: Spain’s ‘Best Generation’ Hit as Boom Turns to Bust
Dec. 9 (Bloomberg) -- Roberto Frenedoso, a 23-year-old construction worker, has little to do these days except loiter around a square with his unemployed friends in Madrid’s Getafe suburb.
Basically a duplicate post, but he's hit the nail like other Times economics writers don't
Times Online: A crash as historic as the end of communism
Peter posted the original article link earlier today, but I think most missed it. Robert Peston (for it is he etc.) blames the Bank of England, banks, the media and us, in that order more or less.
Some sense from the CML - honest ... read it
Times: Mortgage lenders attack Labour on bank policies
The Council of Mortgage Lenders (CML) has launched an attack against the Government's "conflicting and incoherent" policies toward British banks as home loan lending fell by nearly 60 per cent in October. Michael Coogan, director general of the CML, today listed a litany of issues facing banks in the current climate.
Expose them for what they are
Telegraph: Labour is 'hypocritical' on credit card interest
The Government has been called “a bunch of hypocrites” for threatening regulation to cut credit card rates while the Labour party receives more than £1m from a card that charges 10 times the Bank of England base rate. Worse still for old-fashioned socialists, the Co-op offers preferential terms on a Labour Advantage Platinum card, which charges 13.9pc for purchases – but this is available only to people earning more than £25,000 a year and who are aged over 25.
Landlords see big decline in the value of property portfolios
mortgagestrategy: Landlords lose £52.8bn in equity year-on-year
Landlords have lost £52.8bn in equity from their property portfolios this year, reveals Managing Partners Limited The fund manager compared the portfolios of English and Welsh landlords between October 2007 and October 2008 and found the loss that equates to £144.77m a day or £6.03m an hour.
Cut-price repossessions 'force house prices lower'
telegraph: Cut-price repossessions 'force house prices lower'
Banks are reinforcing the house price crash by selling repossessed properties at knock-down prices, estate agents claim, as their rate of sales drops to less than one a week, their lowest in 30 years. Stuart Auckland, of the Royal Institution of Chartered Surveyors, based in County Durham, said: "Repossessions are selling for competitive prices at considerable discounts over neighbouring properties." Banks sell repossessions through a restricted number of estate agents, who may not even be local. The property may then be sold through the agent’s window or at auction.
can anyone shed light on why or how the ONS can alter old figures?
reuters: Bleak winter ahead as economy gloom grows
The ONS also revised down output in previous months. Other things being equal, that would mean gross domestic product (GDP) contracted 0.6 percent in the third quarter instead of the 0.5 percent fall initially reported, it said. Manufacturing output fell much faster than expected -- 1.4 percent on the month -- and for the eighth month running. This was the biggest drop since March 2005 and marked the longest stretch of declines since 1980.
this is getting more severe by the day!!
yahoo: New recession warnings hit leading economies
"The data suggests that the economy is contracting faster than previously thought, and the depth of the recession will be more severe," said Glenn Maguire
reading it , sales look down, but not hugely
smmt: Used car sales - UK quarter three figures issued
Used car sales - UK quarter three figures issued
Postman Pat owner axes jobs
manchester evening news: Postman Pat owner axes jobs
POSTMAN Pat owner Entertainment Rights is cutting a third of its workforce after revealing the collapse of Woolworths has left it around £800,000 out of pocket. The kids' TV programme company, which also owns rights to Basil Brush and Rupert Bear, said Christmas sales were likely to be lower than expected and is cutting 50 of its 150 staff by the end of the year under plans to save £5m.
Number of state-licensed agents is down nearly 70 percent in only two years
las Vegas Sun: State’s mortgage industry dramatically contracts amid home foreclosure crisis
Nevada’s housing recession is taking a stunning toll on the state’s mortgage banking and brokerage industry. The state reported a drop of more than 55 percent among mortgage agents, brokers and bankers in the past two years. “It is simply a function of the marketplace that as credit has been constricted and loans are not as available there is less of a market for people who make or broker loans,” said Joe Waltuch, Nevada Mortgage Lending Division commissioner. The biggest drop came among mortgage agents, whose ranks have thinned almost 70 percent. The division reported last week that the state had 3,589 active licensed mortgage agents as of Dec. 1, a decline from 11,686 in October 2006 and 8,295 at the end of October 2007.
Spain’s ‘Best Generation’ Stung by First Slump in Its Memory
bloomberg: Spain’s ‘Best Generation’ Stung by First Slump in Its Memory
Roberto Frenedoso, a 23-year construction worker, has little to do these days except loiter around a square with his unemployed friends in Madrid’s Getafe suburb.
only last week they were bragging how good things were!!
yahoo: Sony says to cut 8,000 jobs, shut plants
"These initiatives are in response to the sudden and rapid changes in the global economic environment," it said in a statement.
Finally the banks speak
BBC: Lenders slam government policies
The government's priorities for lenders are "conflicting and incoherent", a banking group has said.
can anyone explain this twilight zone article?
yahoo: Big Rise In Number Buying Homes
The number of mortgages taken out by people buying a new home jumped by 14% in October, new figures show. A total of 39,900 mortgages worth £5.5 billion were advanced for house purchases during the month.
Why sterling looks set to fall even further
MoneyWeek: Why sterling looks set to fall even further
It's little wonder that investors are betting against sterling. The pound hit a fresh all-time low against the euro at one point yesterday, with one euro costing 87.38p at one point. The slide is becoming so bad that it threatens to shove Britain right down the pecking order of global economic powers.
Everything must go soon! Massive discounts!
Citywire: Chartered surveyors report 30 year house sale low
‘Vendors still have to accept the inevitable fact that house prices are falling and re-price their property to suit current market conditions,’ said Jeremy Leaf, Rics spokesman.
As long as we keep shopping it'll all be OK
BBC: UK manufacturing in sharp decline
UK manufacturing output fell in October by the biggest amount in more than six years official data showed, underlining the weak state of the economy
Estate agencies closing at a rate of 150 per month.
Citywire: Estate agents face another investigation
Estate agents will come under scrutiny as part of a sweeping investigation into the house buying and selling process announced by the Office of Fair Trading. The body will consider the competition between price and quality between estate agents and the extent of consumer protection. It will also scrutinise the relationships between estate agents, mortgage brokers, surveyors and solicitors. The news comes as estate agents fight for survival. The housing downturn has seen business slow to a trickle – some are said to be shifting just one house a week – with recent stats suggesting estate agencies closing at a rate of 150 a month.
The latest RICS report [pdf]
RICS: Price balance improves but remains severely depressed
The net balance of surveyors reporting price falls improved from 81% last month to 76.5% in November, However, the number of sales per estate agent fell to the lowest level since records began in 1978. The EA quotes are always good entertainment: W2008 was the year a soft landing turned into a crash and next year will depend upon what can be salvaged from the wreckage."
The New Economic Reality
BBC News Blog from Robert Preston: The New Capitalism
If you think house prices are going to bounce back in the next few years you should read this background article.
Ramping rubbish from estate agents...
Times Online: House hunting hits two-year high
''The number of people seeking to buy a home surged to a two-year high last month as bargain-seekers searched for repossessed and forced-sale properties at bargain-basement prices, new figures suggest''
For the Jeremy Clarkson fans
Times: Vauxhall Insignia 2.8 V6
I was in Dublin last weekend, and had a very real sense I’d been invited to the last days of the Roman empire. Everyone appeared to be drunk on naked hedonism. And all I could think was: “Jesus. Can’t they see what’s coming?” Ireland has a tiny population, so how could the Irish ever have generated the cash for their flashy lifestyles? And how, as they become the first country in Europe to go officially into recession, can they not see the financial meteorite coming? I have spoken to a couple of pretty senior bankers in the past couple of weeks and their story is rather different. They don’t refer to the looming problems as being like 1992 or even 1929. They talk about a total financial meltdown. They talk about the End of Days.
Green shoots?
BBC News: House sales still falling - RICS
Property sales fell even further in November, according to the latest survey from the Royal Institution of Chartered Surveyors (Rics). The number of sales per estate agency fell during the three months to November to 10.6, the lowest since records began in 1976. However, the balance of surveyors reporting price falls improved to 76.5%, from 81% in October. RICS spokesman Jeremy Leaf said: "Many are starting to see the current market as an opportunity to purchase a previously unaffordable property." The survey comes a day after Rics forecast that the value of commercial property would drop by 50% from peak to trough.
Monday, December 8, 2008
State-owned bank only passing on half the cut
Times: Northern Rock snubs government
Northern Rock, the Government-owned lender, has defied the demands of Gordon Brown and announced that it is cutting its SVR by just half a point. Last week the Bank of England reduced the base interest rate by 1%. The following day the Prime Minister demanded that banks and building societies pass on the full cut. Melanie Bien, of Savills, says: "Other lenders may question why they should bow to government pressure to pass on the full 1 percenta. Northern Rock needs to lead by example if the government is going to have any joy in persuading other lenders to play ball." RBS, which is 57% owned by the government, and Bradford and Bingley, which was nationalized in September, have only passed on 0.75% of the cut. HBOS is only cutting by 0.25%
The Notorious B.I.G.
B.I.G.: Country Default Risk Rises Across the Board
Ireland, Austria, Greece, and the UK have seen default risk rise the most over the last month. All have risen close to or more than 100%. US default risk has risen the 8th most at 68%.
Inside the influential new world of econo-bloggers
Boston Globe: So, you want to save the economy?
The blogs offer a rolling crash course in economics as authoritative as any textbook, but far more accessible. It's a conversation that's simultaneously esoteric and irreverent, combining technical discussions of liquidity traps and yield curves with profane putdowns and heckling headlines. In the process, the bloggers have helped to democratize policy making, throwing open the doors on the messy business of everything from declaring a recession to structuring the most expensive government bailout in history. The bloggers included some of the nation's top academic economists, such as Paul Krugman, Nouriel Roubini, and Tyler Cowen, along with a host of financial-industry insiders who actually knew a great deal about credit default swaps, collateralized debt obligations, and all the other...
Fresh blow for homeowners as Government tightens rules on Hips... in the midst of worst property slu
Daily Mail: Fresh blow for homeowners as Government tightens rules on Hips... in the midst of worst property slump for years
"Homeowners will be forced to compile home information packs before they can put their property on the market, the Government revealed today. In a move that will infuriate those desperately trying to sell their homes, people will no longer be able to put up a ‘for sale’ sign by simply commissioning one of the controversial packs, knows as a Hip."
HIP burden ramped up by Government
mortgagestrategy: Government announces HIP shake-up
Housing minister Margaret Beckett has announced an overhaul of home information packs which will force buyers to compile a HIP before the property is marketed. Sellers can currently commission and pay for a HIP and then start marketing their property for up to 28 days before the pack is available, but from April 6 2009 they will no longer be allowed to market the property without the HIP. A new Property Information Questionnaire will also be introduced.
Deflation risk
TimesOnline: Falling factory costs raise deflation threat
Paul Dales, UK economist at Capital Economics, said: “The further fall in UK producer prices in November provides more evidence that deflation is now becoming the greatest policy concern.
Newspapers going bust now!!!
cnn: Tribune Co. files for bankruptcy
"Factors beyond our control have created a perfect storm - a precipitous decline in revenue and a tough economy coupled with a credit crisis that makes it extremely difficult to support our debt," said Sam Zell, chief executive of Tribune
US mortgage bailouts fail
AP: Homeowners who modified loans are in trouble again
More than half of all homeowners who had their loans modified to make the payments more affordable in the first half of the year are already in default again, banking regulators said Monday. The new data raise questions about whether government money may be better spent on creating jobs, rather than averting foreclosures, said John Reich, director of the federal Office of Thrift Supervision office at a housing industry forum sponsored by his agency. "I do have concerns about allocating federal resources" Reich said.
Housing needs a stable economy, right?
Reuters.com: Nobel winner Krugman fears damage to economy
The simple mechanics of producing a rescue for the world economy are very hard. The pace at which things are getting worse is so great that it's difficult to see how rescue measures can come," the economics professor at Princeton University and columnist for The New York Times told a news conference. "Even with the best of understanding it can't come fast enough to prevent a great deal of damage... I'm very worried what next year will look like."
Time for some jobs news
bbc: Bank cuts jobs in outsource move
More than 100 banking jobs are to be axed from offices in Cardiff. Barclays is to outsource its department which deals with deceased customers' accounts leading to 109 job losses to a third-party supplier in Warwickshire.
Nassim Taleb Interview
Charlie Rose: A conversation about economics with Nassim Taleb
An interview with Nassim Taleb, author of "The Black Swan"
Thousands hit with CCJs
manchester evening news: Thousands hit with CCJs
YOUNG professionals financing Christmas and lavish lifestyles on credit cards and loans are facing a backlash from lenders as thousands are dragged before the courts. More than 120 people a day have been hit with a County Court Judgement in Greater Manchester over the past three months for failing to repay debts - a rise of 34 per cent.
Estate agents come under scrutiny
bbc: Estate agents come under scrutiny
The housing industry is back under scrutiny after a watchdog said it would review estate agent competition. The Office of Fair Trading (OFT) last studied the fairness of estate agents' work four years ago and said it would launch a fresh market study in 2009.
using dropping property prices to avoid fines!!!! incredible
bbc: Extra jail for millionaire 'thug'
However, he was also warned by the trial judge that he would have to repay £2.6m or face spending more time in prison. John Gizzi was jailed two and a half years ago That figure was imposed when Gizzi's main asset, Bronwylfa Hall, was valued at about £1.8m. Since then, the home has failed to sell despite its price being lowered to £900,000. But later this month Gizzi's lawyers will ask the court to consider reducing the original proceeds of crime bill faced by the criminal - a moved prompted by the collapse in property prices.
Paniced markets lead to Contango in oil and Backwardation in gold
Bloomberg: Contango Pays Most in Decade as Shell Stores Crude
I had hardly heard of these terms contango and backwardation till yesterday. With contango the price of a commodity for future delivery is higher than the spot price, backwardation is the opposite. The oil contango is big enough to make it profitable to buy oil now and hold it for future delivery. The current backwardation of gold is very rare and is possibly an indication of a lack of confidence in the COMEX futures market according to this article http://www.marketoracle.co.uk/Article7639.html. Apart from anything else it appears the markets are moving beyond panic and looking for ways of making money apart from shorting.
interesting article about overproduction
japantimes: Japan, Germany set to pounce on seismic shifts in auto industry
For several years, there's been significant overcapacity in car production. In 2006, 70 million cars were made worldwide but only 65 million found buyers. In fact, according to CSM Worldwide, an automotive research firm, the average production ratio for all the world's auto plants was only 68 percent in 2000, far below the 80 percent needed to achieve a sustainable profit. By 2005, output efficiency had risen to 76 percent but was still below sustainable levels. Thus, the need for an industrywide revamp has been brewing for sometime — especially in developed markets like the United States. Another structural reason behind the slowdown is the combination of high ownership rates and rising quality
Middle-class jobs bloodbath as unemployment 'hits 3.5m within two years'
daily mail: Middle-class jobs bloodbath as unemployment 'hits 3.5m within two years'
The middle classes are facing a jobs bloodbath as the recession hits service industries, business leaders say. Their warning comes after a leading economist predicted that around 3.5million people could be out of work by the end of 2010. The Confederation of British Industry says hotels, restaurants, shops and travel firms are all predicted to slash their staff as consumers tighten their belts. A record four in ten professional services firms - including banks, law firms and advertising agencies - are also set to cut jobs in the first three months of 2009
GM's Bust Turns Detroit Into Urban Prairie of Vacant-Lot Farms
bloomberg: GM's Bust Turns Detroit Into Urban Prairie of Vacant-Lot Farms
How do you downsize to the right level when there doesn't seem to be a bottom?'' asked developer Fred Beal of J.C. Beal Construction Inc., which wants to do a $50 million conversion of the vacant 34-story David Broderick Tower near the city center into offices, shops, restaurants and lofts. Detroit has seen decades of fruitless renewal efforts as successive mayors built sports stadiums, welcomed casinos and renovated the riverfront. That endeavor included the Renaissance Center, a downtown office-and-hotel complex that began as a Ford project in the 1970s and switched to GM ownership two decades later after failing to spur long-term development. Move Away From Cars
Birmingham-based Wagon employs over 4,000 workers across Europe, and has struggled due to the car ma
bbc: UK car parts firm Wagon collapses
The UK arm of leading European car parts business, Wagon Automotive, is to go into administration after talks on a new funding deal with its banks failed. Wagon Automotive employs 500 workers in the West Midlands and supplies parts to Ford, Honda, General Motors and Nissan.
Start your engines
RGE: Printing money like mad to ward off deflation
Printing money is effective because it has the effect of putting more high-powered money into circulation. The aim is to increase bank reserves enough so as to increase lending that results from those reserves.
Globrix data shows asking prices are still falling
Globrix: Globrix data shows asking prices are still falling
Article detailing which towns saw the highest pecentages of asking price drops in the week beginning 28th of November. Southend-on-Sea had the highest percentage4 of price drops and in London 278 properties were reduced over the week, at a staggering average drop of £58,446
HSBC wants to start lending again
Telegraph: HSBC to increase mortgage lending
HSBC, the UK's largest bank, has provided a boost to homeowners after announcing it is to increase its mortgage lending by a fifth next year. HSBC is enlarging its planned mortgage fund in Britain to £15bn, a 20% increase on this year and almost double the amount it lent in 2007. Paul Thurston, HSBC's UK managing director, said: "By some estimates, net mortgage lending in the UK will fall next year, but HSBC has no intention of closing its doors to customers, nor will we compromise our reputation for responsible lending. We remain open for business to the tune of £15bn." [Smart business move or just talk?]
The problem summed up in 2 sentences
The Times: Banks angry at Gordon Brown's call for retail rate cut
Gordon Brown faces a showdown with banks this week after they accused him of deliberately distorting the arguments over interest rates. The banks say that they cannot pass on the full cut because the cost of borrowing has not fallen on the wholesale money markets, where they borrow.
What's the best way to make the most of your money - a savings account or paying off your mortgage?
Yahoo Finance: Save More Or Pay Off Your Mortgage?
How do you make the most of a cut in interest rates? The idea is simple: when mortgage interest rates fall, you benefit from lower monthly repayments. So, why not put this extra cash to work by overpaying your mortgage and accelerating its demise? By shortening the life of your loan, you could save yourself a small fortune in interest. While overpaying your mortgage is a great idea, you may be able to make your money work even harder. Rather than lowering your mortgage and the amount of interest charged, it may be possible to earn better returns by sticking your spare cash in a savings account.
Money Go-round
John Redwood: What’s the point of this round trip?
Short and to the point article on how the banks borrow from the government at 12% only to lend it back to the government at 4% thus loosing money. Well with Flash Gordon, Darling & Mandy at the top what do you expect.
Commercial property slump "dwarfs any other in recent memory"
Telegraph: Office space set to halve in value
The value of Britain's offices and factories will more than halve by the end of next year, making this an even worse commercial property crash than in the 1970s, surveyors have predicted. [Did they predict correctly before?] In the latest sign of the severity of the economic slump, the Royal Institution of Chartered Surveyors (RICS) warned that the scale of the commercial property slump now dwarfed any other in recent memory. The RICS said that the commercial property downturn will stretch into 2011 and will exceed the slump experienced in both the 1970 and 1990 recessions. Despite the slide in capital values and rents, commercial property yields in Britain are now among the highest in the developed world and are providing a magnet for foreign investors. [A magnet yet prices to fall more?]
More crticism of Brown's desperate attempts to buy votes from homeowners
MSN Money: Can the government save the housing market?
Only just noticed this article from Friday, but I don't think anyone's posted it yet (apologies if they have). Usually ardent property rampers, I was surprised to see this article posted on MSN.
The peculiar case of middle-class benefits
The peculiar case of middle-class benefits: Sunday Times
"When is a scrounger not a scrounger? Answer: when his state benefits are helping to keep him in a nice house with a £400,000 mortgage." It's getting late so apologies if this has been posted already.
Sunday, December 7, 2008
Conditions have deteriorated on a scale and with a speed that no one could have predicted just a few
Market Oracle: Fed Deploys Every Trick in the Book to Avert Another Great Depression
Bernanke may be dabbling in the stock market already. This forces anyone who is planning to short the market to reconsider his strategy because Bernanke could be secretly betting against him by dumping billions in the futures market to keep stocks artificially high. It just goes to show that all the bloviating about the virtues of "free market" is just empty rhetoric. When push comes to shove this is "their" system and they'll do whatever they can to preserve it. If that means direct intervention; so be it. Principles mean nothing.
Who is copying who here as Moscow's government mimics Brown/Darling virtually word for word
Moscow Times: Mortgage Agency Gets $7.3Bln
Moscow is to provide 200 billion rubles in support of the Russian mortgage market and plans to place its own mortgage-backed securities by swapping them for a pool of mortgages from commercial banks. They also working on criteria by which people who have lost jobs or received a substantial cut in their salaries can get a mortgage extension of up to several years.
Consumer spending, the backbone of the U.S. economy, has been battered, if not broken.
MarketWatch: Retail sales dropping like a rock
The worsening recession is now in a self-reinforcing downward spiral, as the weak economy leads to reduced spending and tighter credit, leading to further job losses and even less spending. "Weakness has spread from housing to Wall Street to Main Street," wrote economists for UBS. "It is now effectively feeding on itself." "The sharp slide in economic activity that began in October looks to have deepened in November," wrote Seamus Smyth, an economist for Goldman Sachs.
UK Government panicking - Why?
guardian.co.uk: Darling on war footing with banks
City analysts have become increasingly concerned that the Bank of England's rate cuts are failing to feed through to the wider economy, potentially exacerbating the downturn.
summary
Market Oracle: The Velocity of Money and Economic Deflation
Good summary. Explains why the collapse in velocity/transactions/consumer strike is at the heart of the problem. Or why the problem is actually the savers, although you could argue that the debtors created the savings. Anyway, worth a read, quite lengthy.