April 2010 Archive
Friday, April 30, 2010 
Good News
The Times: Why do bank profits come so easy?
If the Lloyds share price doubles over the next two years — which some brokers are expecting — the Treasury could make a profit of £50 billion, enough to cut the predicted Budget deficit in 2012 by almost half. The most striking aspect of Lloyds’ return to profit was that the bank reported an increase in margins — effectively the difference between the rates it pays to savers and charges to lenders. Lloyds also took the unusual step of predicting that it would remain in profit for the rest of the year, suggesting that margins are unlikely to worsen over the next 12 months.
Read this
The Times: We squawk for change – but we don’t mean it
Change is the buzz-word; change the chorus; change the cry. “This,” declared a communications industry friend of mine in sonorous tones, “is the change election.” No it isn’t. It’s the anything-but- change election. It’s the head-in-the- sand election. It’s the block-your-ears- and-screw-up-your-eyes election. Change is the last thing the British people want. They want things to carry on as they are.
LR: -0.6% MoM, +7.5% YoY
Times: House prices have fallen, says Land Registry
Signs of volatility in house price growth emerged yesterday as official figures showed a 0.6 per cent fall in average prices between February and March. The Land Registry figures, which are a lagging indicator of prices based on completed transactions of second-hand properties, show that the average house price stands at £164,288 - 7.5% higher than a year ago, but down from £164,455 in February.
Beijing limits home-buyers to one new apartment
Yahoo: Beijing limits home-buyers to one new apartment
The Chinese capital Beijing has issued rules limiting families to one new apartment purchase as authorities try to rein in rampant property speculation and soaring prices, state media said Friday. "For the time being, one family can buy only one new home in the city," China News Service said, citing the municipal government. Beijing authorities also ordered banks to refuse home loans to people who cannot prove they have paid taxes and made social security contributions in the city for at least one year, the report said.
Is reality finally catching up with house prices?
Land Registry: House prices fall by 0.6%
The March data shows an annual price increase of 7.5 per cent which takes the average property value in England and Wales to £164,455. The monthly change from February to March is a decrease of 0.6 per cent.
People are looking for houses, but not for mortgages
Telegraph: Internet searches show Britons are back on the housing hunt
Interest in house-buying jumped in the first quarter of this year if internet searches are to be believed, with the number of UK residents searching the term "houses for sale" increasing by nearly a third year-on-year. At the same time, searches for mortgages declined 22pc, indicating perhaps that while there may growing interest in the property market the number of people who feel able to finance a purchase may be limited. David Smith, senior partner at UK property consultancy Carter Jonas, said: "Many buyers are sitting on their hands, waiting to see how the election and a second potential Budget pan out before they commit to transact."
Interesting
London stock exchange: China says banks face property, government risks
Chinese banks are facing more uncertainties as risks mount in the country's property sector
Worth watching
Home of consumer metrics: Leading consumer indicators
Hello all, been a while since I visited the site but i thought this might be of interest to some of you curious as to whether we are working with a real and sustainable recovery. The linked site has some fascintating US data on consumer spending which paints a far less rosy, and probably more reliable picture of a consumer led recovery, suggesting perhaps this time stimulus on its own will not work. I guess that our leaders will probably just force more stimulus, if that turns out to be the case and continue to refuse to look at underlying issues. Then again one can only hope.
Next one to fall?
Yahoo: Spanish unemployment rate tops 20 percent
is it safe to holiday in europe? riots, unemployment, ash clouds etc
Like to some balance restored, but can the political spin keep it going?
Yahoo: Is the value of your house about to drop?
What’s more, the ratio at which they are outnumbering buyers is increasing too – the net balance of new sellers reached 21% in March, up from 16% in February, while the number of new buyers didn’t budge.
Well duh...
Metro: Stamp duty move no boost for buyers
Some nice analogies in the article, Miles Shipside comes close to describing First Time Buyers as cannon fodder. The 'target' of having at least 40% of homes bought by FTBs is nonsense of course - the correct ratio is influenced by how often people buy and sell in their lifetimes (what percentage of car buyers are first time car buyers? what percentage of cucumber buyers are first time cucumber buyers?)
Mad, bad and dangerous to buy
Independent: Sean O'Grady: Rising house prices in a slump? Madness reigns
It isn't so very difficult to fathom what is happening in the housing market, perverse as it may strike one. It is a matter, as the estate agents have been telling us for the past few months, of a "shortage of supply". It is this magic factor that apparently kept prices up during the second half of last year – probably with a little help from the Bank of England's ultra-low interest rates and a £200bn cash injection into the economy – and the trickle of buyers coming on to the market since January may soften prices over the coming months.
Thursday, April 29, 2010
Is cluster house the new mews?
Rightmove: 1 bedroom cluster house for sale
can anyone shed light on "cluster house"
Letters between Downing Street and respected UK economist
Fred Harrison, UK Economist: "Nobody Saw it Coming"
The standard Labour line about the crisis is "nobody saw it coming". I present you with these letters to and from Blair, Brown, Darling, Mandelson and Alastair Campbell, dating back to 1997, in which they are given warnings about a housing crash, why it would happen and specifically when it would happen. The economist says "I am your worst nightmare. I know exactly why New Labour will fail" He puts himself at the services of the government. He is ignored by all of them. You can find his videos on YouTube too - just search for "Fred Harrison". So, nobody saw it coming, right?
Put that in your pipe and smoke it
Guardian: Mervyn King warned that election victor will be out of power for a generation, claims economist
Death by a thousand cuts
Greece is the Word
The Times: Greece is the Word
A debt crisis in Southern Europe threatens to spread financial contagion and harm economic recovery. A bailout is difficult but essential
Things are not what they seem
Times Online: Cracks appear in the housing market recovery
When is a housing market recovery not a housing market recovery? When price rises are not based on “fundamentals” — the jargon for genuine confidence and high transaction levels, but are skewed by market forces of low supply and high demand — and the lowest interest rates in history.
Cogent warning from Ian Cowie
Telegraph: Average home earned 67 per cent more than its owner in April
Most people’s homes earned two thirds more than their owners did this month, when house price inflation hit double figures for the first time since the credit crisis began. But before homeowners break out the bubbly, they should beware that even estate agents and building societies are warning the boom cannot last.
BNP offers £50,000 to leave Britain
Yahoo News: BNP offers £50,000 to leave Britain
Solution to lack and overpriced housing !?!
Gordon's Gaffe
Telegraph: Gordon Brown meets a real voter and it all goes horribly wrong
Gordon Brown finally gets to meet a real voter and it all goes pear-shaped
THE Reserve Bank is all-but certain to deliver its third successive interest rate increase next Tues
Hearld sun: No rate escape this time
Articles by prominent RBA watchers, says a Sydney-based interest rates strategist at a global investment bank. Notes articles by newspaper columnists Alan Mitchell and Terry McCrann point towards a 25 bps hike to 4.50% on Tuesday.
More rejoicing at the BBC
BBC: House price inflation hits 10.5%, says the Nationwide
This is just a stale re-hash of the article posted below this one. Nothing to see, really. Move along.
+1.0% MoM +10.5% YoY
Nationwide: April HP Index
Commenting on the figures Martin Gahbauer, Nationwide's Chief Economist, said: “The price of a typical UK property rose by a seasonally adjusted 1.0% month-on-month (m/m) in April, leaving house prices 10.5% higher than a year earlier. Over the lifetime of the last Parliament (May 2005 to April 2010), house prices have risen by 6.7%. This compares to a 13.5% increase in the consumer price index, the official target measure of inflation"
Wednesday, April 28, 2010
Rochdale Woman Boots Brown Out of No 10
BBC News: Gillian Duffy responds to Brown's 'bigoted woman' comments
Gillian Duffy should get an MBE at least for her actions today.
Very good points on BTL distortions and affordability
Radio 5 Live: Housing Debate
Go to 1 hr 38 mins in for a very good set of questions and the party responses
Making Sense of What Happened
SMU Cox School of Business: Parsing the Financial Crisis
It's the start of a "root cause" analysis on the current market meltdown.
Another one....
Yahoo: &P cuts Spain's rating one notch on economic view
The outlook is negative, reflecting the possibility of another downgrade if Spain's fiscal position worsens more than S&P currently expects, the agency said in a statement.
Sexy Russian Brides
BBC News: Mortgage exam 'needed for first-time house buyers'
Ignore the title line - I just put it in in the hope of improving the keyword banner ads that appear at the top..:) Quite an interesting article mind..
Will the general election affect much in property world?
HIP Consultant: How election outcomes could affect the property market
With the General Election just around the corner, the final outcome is still difficult to predict. Difficult, do you mean almost impossible? Will the issues mentioned really be much of a priority especially if we get a hung government, I mean parliment.
Is Britain the next Greece?
Independant.ie: David McWilliams: Lunacy of NAMA bailout will tip us over the edge
Will Britain be the first country to go bust or at least have a run on its currency before, not after, the Olympics?
PM candidates answer your MoneySaving questions
MSE: MSE Leaders' Debate 2010
Usual dribble from Brown & Cameron but although I don't agree with everything Clegg mentions, (especially the bit about grants to empty home owners) he at least acknowledges the problem is with house prices being out of control, unlike the other parties.
Techie's DCB? - he could be right!
Reuters: UPDATE 2-Carpetright CEO fears UK heading for "double dip"
A double dip in the economy may herald the next stage in HPC perhaps?
Slowly we leave the eye of the storm, however the storm seems to have gotten worse
Yahoo: ECB's Stark warns of full-blown sovereign debt crisis
"Averting it will require very ambitious and credible fiscal consolidation efforts. In fact, substantially stronger consolidation efforts than those conceived so far."
UK net lending at decade low
The Financial Services Club Blog: UK banks: over $1 trillion of maturing debt
UK net lending at decade low due to maturing debts. Net Lending 41bn at 2000, peak at 2006 and now at all time low.
May is gonna be a big month
Market Oracle: Greece Government Bond Market Panic Crash, Yields Hit 18%, Portugal Next?
It did not take too long for contagion to spread (one day), smack in the face of EU statements that contagion was no risk. Why the EU would put themselves in a position to look so foolish is beyond me.
UK crisis beckons
Reuters: Sterling hit as Greek crisis put focus on UK debt
* Dire UK fiscal situation back in focus * Political uncertainty adding to pressure on the pound
A generation consigned to live in a shed in their parents' garden
Telegraph: Sales of £1,000 garden sheds shoot up
"The Future Foundation, a consultancy, predicts that in a decade's time nearly two thirds of 20 to 24 year old men and a quarter of 25 to 29 year old women will be living with their parents, further increasing the need for many households to find extra space."
Happy megotiating!
Reuters: Scenarios: Options for Greece if it cannot pay its debts
NEGOTIATED DEBT RESTRUCTURING PROBABILITY: most likely in the medium to long term Greece would negotiate a restructuring of its debt before missing a payment. This would require investors to take a significant discount on their debt holdings and could include extending maturities or possibly investors switching to longer maturities. Bondholders could, however, see haircuts of anything from 20 to 40 percent . MARKET IMPACT: Spreads on other highly-indebted countries in the euro zone would widen sharply while German benchmarks would benefit from flight to quality and the euro could fall to around $1.15, levels last seen in 2005.
Tuesday, April 27, 2010
Next comes Portugal, then .....
Bloomberg: Portugal Suffering Greek Contagion Pressures EU Bonds
"With a higher debt burden and a slower 10-year growth rate than Greece, Western Europe’s poorest country is being punished by investors as the sovereign debt crisis spreads. The risk premium on Portuguese bonds rose to more than double the past year’s average this month. Portugal plans to raise as much as 25 billion euros this year, equivalent to 15 percent of GDP. That compares with 21 billion euros last year, according to the national debt agency". "The country’s 236 percent debt burden last year compares with 205 percent in Italy"
Ajay Ahuja on Skynews tomorrow
Skynews: Landlord Action exposes property sorcerer on Sky News and 5 News
The chap on BBC Inside out few months back is now on TV again.
Spending cuts to be deepest since 1970s
BBC: Spending cuts to be deepest since 1970s, IFS says
Based on commitments made so far, the Liberal Democrats would need to cut an accumulated £51bn from spending on public services by 2017. Labour's plans would require a slightly smaller cut during that time of £47bn, the IFS said, while the Conservatives would cut by the largest amount - £57bn.
I'm goin' down, in a blaze of glory...
Greek bonds rated 'junk' by Standard & Poor
BBC: Greek bonds rated 'junk' by Standard & Poor
Greece's debt has been downgraded to junk status by ratings agency Standard & Poor's amid mounting fears its debt crisis is getting out of control.
Goldman Sachs grilled by Senate
Telegraph: LIVE BLOG: Goldman Sachs grilled by Senate as it happens
The Goldman panel looks uncomfortable as Levin slams Goldman and says its actions have polluted Wall Street: “Goldman’s actions demonstrate that it often saw its clients not as valuable customers, but as objects for its own profit. This matters because instead of doing well when its clients did well, Goldman Sachs did well when its clients lost money. Its conduct brings into question the whole function of Wall Street.”
Do mention the Housing Policy Crisis in the election debate
Guradian: Housing Policy Crisis
Not much seemed to have gone into debate on housing policies
That graph again
Moneyweek: The 2010 deadly property lie
This is actually an advert but starts with some interesting observations about the infamous bubble graph. Moneyweek are still very bearish about property.
A nasty surprise...
Telegraph: A nasty surprise for would-be inheritors of parents' homes
There is something sad, bad and slightly mad about adults who actively anticipate inheriting their parents’ home. Perhaps it is a sign of how desperate many people’s financial problems are.
The next big crash awaits
CNN: China property boom
100 times income - third home? Phew its not that bad here after all.
Contagion contagion contagion
Yahoo: Greek troubles fuel Portuguese debt fears
"The Greek crisis has started to spread to the rest of the periphery and Portugal seems to be next in line. The situation there is less urgent than in Greece, but the medium-term outlook is challenging. "Unless Europe's leaders can draw a line under the situation, Portugal could face an uncomfortable period."
Not as rosy as the BBC headline suggests
BBC: Mortgage lending in steady rise according to banks
Mortgage lending rose slightly in March but borrowers continued to pay off loans and overdrafts, according to the major UK banks. The number of mortgages approved for house purchases stood at 34,905 in March, up 5% on the previous month, the British Bankers' Association said. The group added that low interest rates continued to affect consumer behaviour. Credit card use has increased, but the typical amount spent in every transaction fell, the figures showed.
Absolutely nothing learnt then
Guardian: Standard chartered warns of assets bubbles
I'm shocked really that nothing has been learnt from the crisis as we hurtle into the next one,sooner rather than later. you can see financial armagheddon coming upon us shortly followed by a huge depression...
Did Broon & Co actually end up getting a bargain?
The Guardian: Lloyds Banking Group returns to profit
Shares in the banks had risen to just over 70p by last night, giving the taxpayer a [PAPER] profit of almost £2bn on its stake if the break-even price of 63.2p - which takes into account fees paid to the government - is used. Lloyds shares rose nearly 3% in early trading today to 72p.
Martin Wolf
FT: The challenge of halting the financial doomsday machine
Can we afford our financial system? The answer is no. Understanding why this is so is a necessary condition for evaluating ideas for reform. The more aware of the risks one is, the more obvious it becomes that radicalism is the safer option.
Watch out same thing happening now
Reuters: Love letters from goldman sachs
be careful out there...its clear that goldman sachs and others knew the mortgage market was about to blow up and that was in january 2007,so its clear that the stock rally to dow 14,000+ was engineered as goldman off-loaded anything they wanted to. So if you wondered what's going on with this rally now,turn to 2007 for the answers imo....don't be suckered in
Monday, April 26, 2010
After Greece is sorted, who is next?
Reuters: Markets hammer Greek debt
"Germany said on Monday it could offer aid for Greece within days if it agreed to painful new austerity measures, but rescue jitters pushed the cost of insuring against a Greek debt default to a record high". So, who will be next?
Gordon' client state
Spending cuts to hit northeast and Wales: Times
LARGE areas of Britain are now so dependent on public spending that they face economic collapse when the next government introduces cuts, according to a report to be published tomorrow.
Another politician from a privileged background
Times: Which way will Nick Clegg turn?
Good to see Mr Clegg stands for home ownerism. THE Lib Dem leader comes from a surprisingly privileged upbringing, so much so that one might suspect he had instinctive Tory leanings. The son of an “old school” wealthy banker, he attended the private Caldicott prep, from where pupils often go on to Eton. In fact, Clegg went to Westminster school (fees now £28,000 a year), the alma mater of high Tories such as Nigel Lawson, Margaret Thatcher’s chancellor. Money was never a problem. His parents own a 10-bedroom chateau in France and a large ski chalet in the Swiss Alps. (Clegg himself has a £1.5m home in London and one worth £350,000 in his Sheffield constituency. His wife, a lawyer, earns a six-figure salary.)
Told you so
Times: Vince Cable’s image as economic whiz crumbles under new scrutiny
OK, I'm being a smart ar*e but I made a similar observation about Cable in my comment of 16/04/2010 to the post titled "Well - What did you lot think ?" Before anyone says this is a David Smith article, let me say that I think Smith usually writes garbage but I have to agree with him on this article. Cable would make a good Liebor chancellor, you've been warned!
People get ready there's a VAT raid a-coming
Moneymarketing: Schroders - Expect VAT to rise to 19 per cent
Schroders European economist Azad Zangana expects VAT to rise to 19 per cent after the general election. Zangana says that despite both Labour and the Conservatives having unveiled their manifestos recently, the most important factor for UK inflation is that neither has ruled out an increase in VAT from the current rate of 17.5 per cent. He says: “We believe that raising VAT from its current rate of 17.5 to 19 per cent would make not only make a significant contribution to the black-hole in the government’s budget forecast, but it would also be the most efficient way of collecting revenues quickly - as a result, we expect VAT to be raised to 19 per cent after the general election.”
Rules is Rules.... says the planning fascists
The Mail: Granny flat dust-up: Distraught pensioner wrestles with police and jumps in front of the digger sent to demolish her £1million luxury annexe
A pensioner leapt on to a digger in a desperate attempt to stop council workers demolishing her luxury granny annexe. Nicole Harper, 76, a cancer patient, parked her car in the machine's path then jumped on it after workers arrived unannounced to tear down the £1million extension. The annexe was built by her son, businessman Michel Harper, at his country home - but officials declared it a metre wider and four metres longer than had been approved.
Lil sis is now property expert
Itv: Web chat with Sofie Allsopp
Now's you chance to put your questions to property expert Sofie Allsopp!
Lib Dems Tax bombshell for Property Spivs
Lib Dems 2010 Manifesto: Liberal Democrat Manifesto 2010
Can't see the Tory bed fellows liking the Lib Dems intention to crack down on CGT and Stamp duty avoidance by the monied classes: "Tackling tax avoidance and evasion, with new powers for HM Revenue & Customs and a law to ensure properties can’t avoid stamp duty if they are put into an offshore trust." "Through our policy on Capital Gains Tax, ensure that those who use second homes as speculative investments will pay tax on enhanced capital value at the same rate as on earned income, not at 18 per cent as at present." But then again, I defy anyone to find a defacto HMRC closed definition of what a "second home" is. e.g. You can only OWN 1 home, but the HMRC will try to argue it's a second home, if you have to rent somewhere else while you work (except if you in the Armed Forces)
Every little helps
Times: Tesco planning four ‘mini-villages’ complete with supermarkets
Tesco already provides everything you need to stock a home, from groceries to garden furniture. Now it is going to build the house as well. The supermarket chain plans to develop four “mini-villages” in the South East along with “mixed-use living and leisure” schemes in Ipswich and northeast England.
Don't balme it on the sunshine, dont blame it on the moonlight, blame it on the election
Citywire: ‘Housing market on the turn’ as price growth slows
House prices grew by 0.2% in April, a smaller increase than in previous months, with data provider Hometrack suggesting the election had added to buyer uncertainty. It said that the 0.6% house price growth in London had flattered the headline average price increase of 0.2% over the month (the survey runs to April 21st). The survey found that the number of viewings per sale has increased for the third consecutive month in a row, while the proportion of the asking price being achieved remains unchanged at 94%; this is the first time this measure has not risen for 13 months, Hometrack reports.
UK site not updated yet
Bloomberg: U.K. April House Prices Climb at Slowest Pace in Three Months
"U.K. house prices rose in April at the slowest pace in three months as the supply of homes for sale picked up, Hometrack Ltd. said. The average cost of a home in England and Wales increased 0.2 percent from March to 158,400 pounds ($243,000), the London- based property researcher said in an e-mailed statement today. Prices rose 1.8 percent from a year earlier". says Hometrack
Sunday, April 25, 2010
What crisis?
The Guardian: Please, no more guff about change and fairness. What about the fiscal crisis?
The most powerful forces in the world of UK domestic policy are not our politicians, but the international bond markets. Nine of the 10 fund managers surveyed by the Financial Times said that they didn't mind which of the two main parties won the election, because the spending cuts would happen anyway. The cuts are going to happen. They will be the most severe that modern Britain has experienced. Like a desperate family, taking out new credit cards to pay off the loans on the ones we'd already maxed out. That's the point at which we would have to turn to the moneylenders...
France and Germany do not believe Greece, nor the IMF
Daily Telegraph: Greek bailout not limited to €45bn, ministers warn
Germany and France turn the screw
The distortions of wealth and the pressing case for median in statistics
Guardian: Richest get richer despite the weak economy
According to the Sunday Times Rich List the wealthiest 1,000 people in Britain raked in 30% more last year yet the No1 position is held by a chap worth £22.4bn is a 'non-dom'.
How to avoid stamp duty on expensive property
Guardian: How the law works for the well-off
Stamp duty costs 4% on a property costing more than £500,000. But stamp duty on the sale of shares is payable at 0.5%. So stamp duty is saved on the sale of very expensive properties by transferring their ownership into limited companies and by then selling the shares in the company that owns the property. This scheme is widely used for expensive houses and commercial property. An old [2002] government consultation paper proposed reforms to make stamp duty payable on the value of underlying property in companies used for these purposes. But it is difficult to see how it can be policed for offshore companies owned by trusts, where the trust beneficiaries are unknown to the Inland Revenue. -- [Apologies for the old article, but still relevant today. See first comment below.]
Another unapologetic boomer happily riding the young
Times: Ex-minister wants young jobless starved into work
The irritating thing is that the chances this man has had to be in his fortunate position will never be available to those that come after him. I suggest euthanasia - it's the only way we're going to get sustainable redistribution of wealth and economic policy that looks beyond its own self-interests.
Rejoice! Rejoice! Rejoice!
Sunday Express: HOUSE PRICES SOAR BY 10%
"HOUSE prices have leapt nearly 10 per cent in a year, figures will show this week. They are being buoyed by a perfect storm of pent-up demand, the seasonal spring rush, low interest rates, MORE AFFORDABLE PROPERTY PRICES and evidence that the banks are at last lending again. The Nationwide Building Society is expected to report on Thursday that house prices rose 0.5 per cent month-on-month in April, pushing the year-on-year increase to 9.8 per cent, according to think-tank Global Insight."
Free quarterly magazine on the inequities of private land ownership
Land & Liberty magazine: Why Britain's politicians don't want to know [PDF]
In this issue: # Ignoring [Henry] George - why Britain's politicians don't want to know # Monopoly's hidden history # Parliament: better off hung? # How LVT could get the UK's public transport infrastructure back on the rails # News in brief # Newspaper clippings # Book reviews # Letters
Exposing the lie
Telegraph: Our politicians have been happy to promote the deflationary myth
I nicked this from @interestrateripoff on the forums. It is depressing to note how easily sucked in the majority of the media have been on the deflationary myth. It beggars belief that any rational economist would subscribe to deflation being a threat when the government is printing money, devaluing the currency and ignoring key inflation indicators in its monthly interest rate-setting meetings. In conclusion, the UK is in for a short sharp shock when Parliament hangs next month.
Interest rates certain to go up
Times: Homeowners told to fix now
oh dear I thought interest rates were zero forever!..houseprices are certain to crash within 12 months if rates go up imo..quite how the housing bubble has been allowed to continue beggars belief....ftbs at 38 years old...utter madness
Interactive Graph - in $ but you get the idea
NY Times: Better to Buy or Rent
w a i t i n g f o r h i g h e r I R s
Pile in, kids
The Times: How to ride the property boom
They can hardly believe it themselves, but estate agents and mortgage brokers are agreed: the property market is booming like it’s 2007 again. Now funds are giving investors access to the top end of the market without the need to buy a home. Hotbed raised £3m for investment in the London Central Portfolio (LCP) fund, which specialises in property within a radius of six miles around Hyde Park. It is targeting a 15% yield. Hotbed said "A year ago there was no way we would have gone into it but the world is good again. It took us just two weeks to raise this money"
Saturday, April 24, 2010
The sense of fear is palpable
BBC: US urges quick action on Greece at IMF meeting
US Treasury Secretary Timothy Geithner has called on the IMF, the EU and the Greek government to act quickly to tackle Greece's debt crisis.
Hmm
Yahoo: Emails show Goldman Sachs bet on housing market decline
Goldman Sachs (NYSE: GS - news) bet on the demise of the US housing market as the economy teetered on the brink and as the firm sold mortgage-based investments to clients, company emails released on Saturday showed.
Base rates: hangover or hair of the dog?
The Times: Stunted growth leaves Bank facing interest-rate dilemma
The combination of low growth and rising inflation will present the next government with an interesting choice. The conventional wisdom is that interest rates should rise in response to inflation but that could strangle the property recovery.
Does this mean they will more cautious and start downgrading
Cnn: How credit watchdogs fueled the financial crisis
Lawmakers are now asserting that credit rating agencies (CRAs) like Moody's Investors Service and Standard and Poor's Ratings Services failed to expose the lurking dangers.
Should actually read £55 Billion !
BBC: Hidden debts 'amount to millions'
In the words of Confused76 MWAHAWHAWHAW. Only ever had one loan myself (for a car). Realising it was 26 months to pay for the car and 10 months to pay the interest I decided it was better to save up for things.
Friday, April 23, 2010
Thanks, Gordon
Express: BANKERS' BONUSES SOAR TO ‘SICKENING' £7BN
I rarely agree with trade union views but I have to agree with Brendan Barber on this.
Some sense from a Liebor politician
Reuters: Jack Straw resists wider vote reform
This will p*ss off the Liberals who, having being out of power for 80 plus years see proportional representation as a route to power. Has it ever occurred to them that their policies might not appeal to the British voter?
Time To Buy Property?
IndexUniverse.eu: Time To Buy Property?
What does redenominating residential property prices in real money tell us about their valuation?
This will happen whether or not
BusinessWeek: Honey, I Lost the House. Now It’s Time to Party
If you believe what the economy needs is a boost to spending... let’s get everyone to stop paying their mortgage. Why stop there?... make the plan fairer by spreading some of the wealth around. “Nobody has to pay,” Lawler said. “Let’s have a rent moratorium as well.”
Sick Squid
The Times: We’ll demand millions if Goldman is guilty, says Brown
Gordon Brown has turned up the heat on Goldman Sachs, warning the investment bank that it faced paying millions of pounds of compensation to British taxpayers if it was shown to have committed fraud.
This should have happened years ago across the public sector.
Huddersfield Examiner: Kirklees public sector staff told: ‘Work your missed time or you won’t get paid’
Public sector staff in Huddersfield who have had enforced time off because of the Iceland volcano will not be paid.
Funny how we have not heard of any more USA banks going bust
Yahoo: Two Icelandic banks file for bankruptcy
Their balance sheets total some 300 billion kronur (1.8 billion euros, 2.4 billion dollars), according to a government source, who requested anonymity.
Good!
Guardian: House Prices Would Crash if Tories Win!
Well, it is one reason I can think of to vote for the tories! THe thing is, this will have to happen whoever wins. It is just a shame that the sheeple don't realise or care!
The truth at last?
Yahoo: Public sector job losses 'inevitable', says Alistair Darling
Public sector job losses are ''inevitable'' as measures to halve the deficit take effect, Alistair Darling, the Chancellor, has said.
Brother, Can You Spare A Dime?
BBC: Greece to activate EU-IMF loans
Greek Prime Minister George Papandreou has asked for activation of an EU-IMF debt rescue mechanism, to help pull the economy out of its current crisis. It follows negotiations with eurozone nations and International Monetary Fund over the details of an emergency rescue package. It comes a day after data showed a worse-than-expected budget deficit of 13.6% of gross domestic product. Credit rating agency Moody's also cut its rating on Greek debt on Thursday.
ONE of Britain's oldest shoe stores has collapsed - putting nearly 1,750 jobs at risk.
The sun: Faith Shoes has collapsed
The collapse came as NORTHERN FOODS said it was closing a ready meals factory in Swansea - with the loss of 234 jobs.
"Windfall" (retrospective) tax of the City net income
Greg Pytel: Election 2010 - short of ideas or lack of guts
Retrospective windfall tax on bankers is a brilliant idea. In 1997 utilities could have paid it. The bankers can do so now. And billions of pounds would be recouped.
A couple of months old, still it show how the contagion will hit the UK
Independent: UK banks exposed to struggling European economies
According to the Basel-based Bank for International Settlements (BIS), UK banks had a total £76.2 billion exposure to the Spanish economy in corporate and government lending at the end of September last year. They also lent £7.8 billion to Greece and £15.6 billion to Portugal, according to the BIS figures. "This story also has the added equation of Portugal, Spain and even Ireland going the same way. The feeling is that if Greece goes then others will follow in the domino effect."
Speaks for itself
ONS: Gross domestic product preliminary estimate
Gross Domestic Product (GDP) increased 0.2 per cent in the first quarter of 2010, compared with an increase of 0.4 per cent in the previous quarter. The decrease in the growth rate was due to weaker growth in services.
More BBC spin
BBC News: UK economic growth slows to 0.2%
The article ends "The last quarter of 2009 saw GDP growth of 0.4% - revised up from an initial estimate of 0.1%. ".. er yes, but that's because the previous quarter was revised down 0.3% FFS The UK economy continued to recover from recession in the first three months of the year, according to official estimates. GDP grew by 0.2% between January and March, the Office for National Statistics (ONS) said. That was weaker than the 0.4% growth predicted by many economists, but the figure is likely to be revised.
Thursday, April 22, 2010
Exponential !
Business Insider: This is what the Greece endgame looks like
Extend this trend for even a short period of time and it's all over for Greece's finances.
Stated-income loans - liar loans.
The Business Insider via Yahoo: Confessions of a Former Mortgage Broker: What We Did Was Criminal
stated-income loans. The popular term now is liar loans...The Mortgage Asset Research Institute referred to a study that found 60 percent of applicants who used stated income exaggerated what they earned by more than 50%.... If you borrow money, you need income to pay it back. The first job of a bank is to check to see if you have income to pay the borrowed money back. If you eliminate the verification of income for a mortgage borrower, you eliminate your ability to predict the likelihood of repayment...The banks required no verification of the statements about income. By that action banks encouraged the fraud...what is clear now is that the crime of stated-income mortgages deserves to be explored fully by criminal prosecutors.
Up tp 75%LTV! I was expecting about 35% LTV when I read the title
Telegraph via Yahoo Finance: The mortgage that doesn't require a credit score
Legal & General (3166.KL - news) has launched a new mortgage where applicants do not need to be credit scored. Legal & General Mortgage Club has launched a new mortgage where applicants do not need to be credit scored. The two-year fixed-rate mortgage, which has a rate of 3.35pc, is the only offer of its kind available to borrowers.
Slow motion train crash ?
Bloomberg: Greece’s Credit Rating Lowered One Step by Moody’s
"Greece had its credit rating cut one step by Moody’s Investors Service as the government’s surging debt-servicing costs undermine deficit-cutting efforts. Moody’s lowered the rating to A3 from A2, four grades above junk, the company said in a statement today. Moody’s also put a negative outlook on Greek debt, indicating it’s more likely to cut it again than raise it or leave it unchanged".
B.. b.. but £163.4bn is less than £200bn
Reuters: Borrowing worst since World War Two
"The Office for National Statistics said the government's preferred measure of public sector net borrowing hit 163.4 billion pounds in the fiscal year that ended in March".
The euro could still have much further to fall
MoneyWeek: The euro could still have much further to fall
The IMF is in Greece to discuss the country's debt. But the bail-out won't end the euro's problems. As more of the eurozone's weaker countries demand hand-outs, the knock on effects could send the single currency spiralling down.
This could get Ugly
World Socialist Web Site: Britain: What will a 20 percent cut in public spending mean for workers?
If the information is accurate in the article, then a serious crash will happen, significantly impacting housing prices. 20% cut = 1.5 Milo job loses = post war record. Currently # of people in work = 28.86 Milo (lowest since 1996). It also states that in 2007 (before the crash) the Finance sector only employed 1 milo people with an additional ~500k related jobs - "That is not much more than half the number employed in Britain’s now depleted manufacturing sector". Puts it into perspetive really.
Have they run out of bail money?
Cnn: US treasury chief vows to let struggling banks fail
US Treasury Secretary Timothy Geithner vowed Thursday to put failing banks that take too much risk "out of existence" in order to avoid bailing out firms deemed "too big to fail" at taxpayers' expense.
And...
Yahoo: What the would-be chancellors havent said
The gap is the difference between what people need to borrow and what they actually can lay their hands on. This year, the IMF says, that debt overhang and the impact of the financial crisis mean that British banks and investors will only be willing to lend around £50 billion. This comes nowhere near to fulfilling the demand for borrowing some £200 billion. Since neither the borrower or the lender can get what they want (and cross-border lending has collapsed in the wake of the financial crisis), the only solution is that, in the IMF's words, "either borrowing needs to be scaled back to equalise the lower supply, or market interest rates will need to rise."
Bob Farrell’s 10 rules for investing
Investment Postcards: Bob Farrell’s 10 rules for investing
This article focuses on words of investment wisdom that are timeless and especially appropriate as investors grapple with the difficult juncture at which stock markets find themselves at this stage. Wall Street “gurus” come and go, but in the case of Bob Farrell legendary status was achieved. Farrell retired in 1992, but his famous “10 Market Rules to Remember” have lived on and are summarized here.
Bring it on
Yahoo: IMF and Bundesbank fear contagion from Greece as bond spreads soar to fresh records
The International Monetary Fund has warned that Greeces debt crisis risks spinning out of control, threatening to spill over across the region unless action is taken soon to restore confidence. "In the near term, the main risk is that if left unchecked market concerns about sovereign liquidity and solvency in Greece could turn into a full-blown and contagious sovereign debt crisis,"
"sales are still less than half the number reported at the same stage of 2007"
BBC: House sales see spring bounce, figures show
House sales in the UK are continuing to revive after their post-Christmas slump, figures have suggested. HM Revenue & Customs said sales rose by 13,000 in March from February to 72,000, a jump of 22%. The level of sales was also 24% higher than in March last year, when the market was at its most depressed. However, sales are still less than half the number reported at the same stage of 2007, before the market collapsed under the impact of the credit crunch.
UK borrowing stretches well beyond any plume of smoke from Iceland
BBC: UK borrowing hits record amount
Government borrowing hit a record high of £163.4bn this year, official figures have shown. The borrowing figure for the 2009-10 financial year is lower than the £167bn predicted by Chancellor Alistair Darling in April's Budget. Including financial intervention measures, borrowing totalled £152.8bn - lower than the £155.9bn forecast. It is the biggest annual borrowing figure for a UK government in peacetime.
Brown, Cameron, Clegg - Does it matter?
Motley Fool: Why The Election Means Nothing To The Markets
The FTSE 100 doesn't care who wins on May 6. The instant the election date was confirmed, the financial press exploded with articles looking at its likely impact on stock markets. Do markets vote Labour, or Conservative? Do they dread hung parliaments? What do they really think of Nick Clegg?
Martin Wolf - a classic of modern communism
Greg Pytel: Communism (for the rich) is alive (and well)
Two thoughts came up to my mind: 1. Sometimes you have to change everything in order to change nothing. 2. We live in an age of "communism for the rich". Who would have thought only a couple years ago that the most liberal journalists would become modern days communism standard bearer.
Bubble symptoms
Motley Fool: 15 Ways To Spot A Bubble
Cliff D'Arcy offers a list of 15 characteristics of financial bubbles. Unsurprisingly, there are plenty of references to property and mortgages.
EU / IMF plan, real or not?
Daily Telegraph: IMF and Bundesbank fear contagion from Greece as bond spreads soar to fresh records
"Action needs to be taken quickly. Investors want to make sure that the aid plan is no bluff," €8bn refinancing crunch looming on May 19 for Greece They bail them out the German Professors go to court, they don't then Greece defaults.
Wednesday, April 21, 2010
The silent chop
The Times: 225,000 public workers to be axed
More than 225,000 public sector jobs cuts are quietly being forced through by councils, the NHS and police forces, despite Gordon Brown’s pledge to protect frontline services. The cutbacks are already being implemented. Deeper cuts are expected to emerge after the general election, whichever party takes power.
Expat Brits spread house price cancer down under
Daily Mail: Nine out of ten expats are so glad to be gone
Chris and Janice sold their Surrey house in 2007 and bought a four bed house in Auckland and although the average wage in NZ is £10754 house prices are much lower with the average house costing £110000. Somehow I think Mr & Mrs NZ born average may not view things the same way.
Save for a home of your own
Telegraph: Britain's savers face 'worst time' to save
"Financial experts warned it is now the “worst time” to save following a drop in savings rates during the last six months and a rise in inflation to 3.4 per cent. It means savers are out of pocket by more than £200 in a year on a £10,000 savings deposit once inflation and tax is taken into account". (Hint: Maybe the government wants us to spend more?)
Lol lol
Dailymail: Homeowner puts huge banner on house after anonymous letter blasts it as eyesore Read more: http://www.dailymail.co.uk/news/article-1267708/Mind-nose--Homeowner-puts-huge-banner-house-anonymous-letter-blasts-eyesore.html#ixzz0lll1PUKq
A bizarre row has prompted one man to hit back at neighbours with a huge banner telling them to mind their own business. Tom Garvey took the unusual step after receiving a poison pen letter criticising the state of his front garden. In it, the anonymous writer accuses him of having the 'worst' house on the Coventry street after he left a mattress and some rubble on the front garden.
David Smith should try speaking with his colleagues at the Times occasionally.
Times: A powerful addiction
We have for too long been operating on a financial model which depended far too heavily on the trading of financial products in the City and the provision of ever-larger loans to already stretched borrowers to purchase property. Our private property-related debt in proportion to our GDP is now larger than that of any other major economy.
The New Slaves
Guardian: London's richest people worth 273 times more than the poorest
The one hopeful point in this article is that geographical concentrations of wealth (and hence Tory voters) means that a real choice could be on offer in this election.
Cambridge Uni Director of Studies in Economics at Robinson College says keep NI rise but devalue ste
Accounting Web: Cambridge fellow slams NI detractors
Basically says NI rise will increase labour cost, but let's devalue sterling to stay competitive. And so, in order to raise a ere £6bn, Cambridge Fellows is happy all in the Sterling land to suffer from further devaluation.
I think we will anyway
Yahoo: Hung Parliament risks re-run of IMF rescue for Britain, warn Tories
A hung Parliament would rock Britains economy so severely that the International Monetary Fund (IMF) would have to tackle our problems for us, the Conservatives have warned. In their strongest comments yet on the dangers of election limbo, the Tories called for the public to start focusing on the economic consequences of a hung Parliament. Kenneth Clarke, the shadow Business Secretary, spoke of the fiasco of working in the last hung Parliament in 1974. He warned at a press conference this morning that another would be even more dangerous in the current environment.
2.5 Million Unemployed - Highest since Dec 1994
Personnel Today: Unemployment hits 16-year high
"The number of unemployed people increased by 43,000 in the three months to February, to reach 2.5 million - the highest figure since December 1994, official figures revealed today..." - but worry ye not, for ever increasing house prices will increase ye wealth forever ye more! Ye no needeth to work no more! Gordon's miracle revealed.
The domino wobbles..
Bloomberg: Greece Aid Talks Begin as IMF Signals Debt Threat
Greek 10yr yield has now topped 8%. The Greeks are talking about the EU bailout plan, but the markets are very skeptical.. ..the theorists talk about the need for Greek deflation, but given the civil unrest already seen, it is very hard to believe that public sector wages, pensions and benefits can be progressively cut, year after year; without provoking a revolution or military coup.. Greece will probably crash out of the euro before the year is out, and it is likely that the scramble to head off contagion will provoke base rate rises and higher borrowing costs across the developed world.. ..wait for it..!
Really?
Yahoo: Rising public debt threatens world financial system: IMF
The economic crisis could be entering a "new phase" with rising public debt threatening to undermine the stability of the global financial system, the International Monetary Fund warned Tuesday.
Soon to be 10% including smugdog
Yahoo: British jobless rate rises to 8.0%
Britain's unemployment rate leapt to 8.0 percent in the three months to the end of February, compared with the September-November period, official data showed on Wednesday.
Good News ?
Reuters: Unemployment claimant count falls
LONDON (Reuters) - The number of Britons claiming unemployment benefit fell three times faster than expected in March, but the rate of unemployment on the broader ILO measure rose to its highest in almost 14 years in the three months to February, official data showed on Wednesday.
Tories deny RAB Capital's theory about house prices
YourMortgage.co.uk: Tory win could lead to house price slump
The Conservative Party's plans to slash spending in the public sector to a larger degree than Labour could bring about a property price crash, according to a City economist ... A Conservative spokesperson disagreed, accusing the fundmanager of exaggerating the potential impact of the planned spending cuts on jobs.
The onward march of Home-Owner-Ism
Metro: First-time buyers 'at 19-year low'
"Banks are demanding far higher deposits since the credit crunch struck, meaning that first-time buyers must often save tens of thousands of pounds before they can get a foot on the ladder. This, coupled with rising house prices, has seen the average age of a first-time buyer rise to 32 compared with 31 in 1991, said GfK. "Lack of deposit capital is at the root of this problem, as fewer than one in six hold sufficient funds to make the necessary down-payment," said GfK. But as first-time buyer numbers are in decline, GfK has found that an increasing proportion of first-time mortgages are being granted to the over-50s as baby-boomers buy up properties for their children, who are "locked out" of the housing market."
Tuesday, April 20, 2010
Fabrice Tourre
The Telegraph: Goldman Sachs trader barred from the City over SEC charges
Fabrice Tourre – the bond trader at the heart of Goldman Sachs' fraud case – was on Tuesday barred from working in the City of London in the first 'victory' for financial regulators on both sides of the Atlantic.
Don't like the rules? Just change them! Simples!
The Telegraph: Iceland volcano: UK airports set to reopen
international transport ministers agreed to revise the rules. Previously air space had been divided into areas where ash was present and all flights were banned and clear skies where there were no restrictions. Ministers agreed to create a third category, air space where volcanic dust was present but where it was also felt that its concentration was unlikely to create any safety risk.
Why just GS? They were all at it.
Signs of the Times: Goldman Sachs' bloody nose
All the Wall Street i-banks exacerbated the housing bubble and subsequent bust by deliberately packaging the most toxic mortgages into certain CDOs and then making big money by shorting them. If anything, the other banks were worse than GS. So why is Obama going after GS? Because he'll garner populist support by giving them a bloody nose? Will it enable him to get an ineffective reform bill through and leave intact most of the rotten system?
Tony sticks his money on Cameron to win !
Citywire: Hidden camera footage: Blair takes a punt on the election, but which way?
'I always back the winner, you know': Ex-PM pops in to Ladbrokes to place his bet. Since the recent headlines comparing Nick Clegg to Winston Churchill, the chances of a hung parliament have risen considerably according to the polls, and the outcome is more uncertain than ever. One man who clearly hasn't lost his conviction is Tony Blair. A passer-by managed to film him placing a cool £100 - on a Cameron victory.
Inflation? Pah!
Sky News: Inflation Rate Soars Higher Than Expected
The rate of inflation has jumped to a higher-than-expected 3.4%, as higher-priced petrol, gas bills and plane tickets contributed to a rise in the cost of living.
More letters from Mervyn on the way
Bloomberg: U.K. March Inflation Accelerates More Than Forecast
The U.K.’s inflation rate jumped more than economists forecast in March, breaching the government’s upper limit for the second time this year after energy costs rose within weeks of the election. Consumer prices climbed 3.4 percent from a year earlier, compared with a 3 percent increase in February, the Office for National Statistics said in London today. The median forecast of 30 economists surveyed by Bloomberg News was 3.1 percent. On the month, prices increased 0.6 percent.
China curbing speculation
CCTV.com: Tighter mortgage policy affects market
The central government's new lending policies are having an effect on the property market. The impact is already being felt in first-tier cities such as Beijing, Shanghai, Guangzhou and Shenzhen. In southern China's boom town Shenzhen, home to numerous housing market dramas, real estate agents find business is suddenly slowing.
Cost of living increase outstrips pay
BBC News: UK inflation rate rises to 3.4%
The UK inflation rate rose sharply to 3.4% in March from 3% the month before, official figures have shown. The rise in the Consumer Prices Index (CPI) inflation rate was greater than analysts had expected. Retail Prices Index (RPI) inflation, which includes housing costs, also rose sharply to 4.4% in March from 3.7%.
Let's hope it goes all the way
Times Online: Goldman under fire on all sides – and Obama turns up the heat
I remember suggesting that we've had a minimum of negligence and that legal action can't be far away. Now that people are calling a spade a spade and examinally Government Sachs and others, it won't be long and anyone else involved in the CDO creation market will also find it impossible to avoid action. If this goes all the way, expect a wave of liquidations.
Monday, April 19, 2010
How hard is it for a politician to give a yes/no answer?
BBC: Should house prices rise or fall?
Avg' property 9x avg' salary. Nothing wrong there then! Q. Would it be a good idea for house prices to fall? A. 'That would cause a great deal of aggravation amongst certain people' !!!... Hmmm. I wonder who that could be? I wonder if they haev any influence? We can't be having price falls, it just wouldn't do. And pay rises are out of the question. Maybe the banks should lend more money. What do you think?
It's different this time? Just like dot.com was different.
FT.com: Jeremy Grantham on Bubbles
There's nothing more dangerous and damaging to an economy than a great asset bubble that breaks. 32 out of 34 historical bubbles have moved back the trend prior to the bubble forming. There are no exceptions and the two that are outstanding are the UK and the Australian housing bubbles sustained by floating rate mortgages where the rates came down so fast they protected the bubble. Now we have to see what happens when interest rates rise. If they do not go back to the long term trendline which is a multiple of family income it will be the first time in history that such a bubble has not broken. That is not something I would want to bet on if I was thinking of buying a house.
Ouch!!
Dailymail: More than 500,000 public sector jobs at risk in post-election spending squeeze
More than 500,000 public sector jobs could be axed in the next five years under a post-election squeeze on spending, it was claimed today. The figure is far greater than any of the major political parties are forecasting, according to the Chartered Institute of Personnel and Development. The jobs cull could lead to a 10 per cent reduction in the 5.8million public sector workforce, 'dwarfing' anything in the party election manifestos, the CIPD said.
Snow, dust, leaves, rain the UK stops
Reuters: Volcanic cloud delays Lloyds bond issue
Lloyds Banking Group (LLOY.L) has delayed meeting investors on a planned residential mortgage-backed bond sale because of air travel disruptions, one of the banks managing the sale said on Monday.
Goldman busted, we might get some money back
ManagmentToday: Goldman Sachs fraud case puts whole industry on trial
"And there’s a UK angle, as RBS ended up $800m in the hole to Goldman’s because it insured the dodgy CDO – or rather it acquired the obligation to insure it when it bought ABN Amro. Still with us? When the product failed, RBS had to pay out... So there is a chance that RBS – which now essentially means us, the British taxpayer – could get some or all of that back. Don’t go spending it just yet though, it could take years to sort out.".... Another headline I like "Goldman busted, shares, oil & gold prices fall". So have Wall St shysters been manipulating the gold price higher?
"The property market will be subdued for some time, lenders say"
BBC: Mortgage lending jumps in March, lenders report
Mortgage lending jumped to £11.5bn in March, a 24% rise from February the Council of Mortgage Lenders (CML) said. The figure was also 3% up on March last year, when the market had reached its nadir in the wake of the credit crunch. Despite this rise, the CML said activity in the property market was still relatively subdued. It pointed out that total mortgage lending in the first three months of the year was still substantially lower than in the last three months of 2009.
Unspun article from the Beeb shocker!
BBC News: UK economy to 'languish in doldrums', forecaster warns
The UK economy will remain stuck in the doldrums this year with growth of 1% or less predicted in 2010, a leading forecaster has warned. The Ernst & Young ITEM Club, which uses the Treasury's economic model for its forecasts, said the immediate prospects for the UK were "dismal".
Common sense is still a rare commodity
Economist: House prices: you can't keep em down
A useful international comparison here. UK has pain to come I fear...
Rightmove: +2.6% MoM
Express: HOUSE PRICES ROCKET AS FIRST-TIME BUYERS RETURN TO THE MARKET
The housing market has shown more signs of revival as asking prices rose by 2.6 per cent over the past month, according to figures released today by Rightmove. The ditching of stamp duty for first-time buyers of properties under £250,000, announced in last month’s budget, is believed to have boosted the traditional spring housing market price rise. Property economists are hoping that the price rises coupled with the Bank of England’s decision to leave interest rates at a record low of 0.5% for the 14th month running, means the housing market could be entering a period of sustained growth. But Rightmove warned that over-supply could force prices down later in the year.
Sunday, April 18, 2010
Blame the ash for no bailout of greece
Yahoo: Ash delays EU/IMF mission to Greece
ATHENS (Reuters) - A mission of European officials and the International Monetary Fund to Greece has been delayed by the volcanic ash cloud and will arrive on April 21 if possible, Greece's Finance Ministry said on Sunday.
Key reversals on stock markets point to pullback
Investment Postcards: Key reversals on stock markets point to pullback
Most benchmark indices closed on Friday with so-called key reversals, indicating that a pullback or consolidation of the recent gains has probably started.
Wonder how much the probe is costing taxpayers?
Yahoo: EU probes economic fallout from travel chaos
Europe on Sunday ordered a probe into billions of euros potentially lost since an Icelandic volcano erupted, prompting the biggest airspace shutdown since World War II. The head of the European Union's executive branch Jose Manuel Barroso tasked three of his top lieutenants with assessing the impact on the troubled airline industry -- pegged already at one billion euros (1.35 billion dollars) by one London analyst -- and wider costs to Europe's economy.
Mwauah
DavidSmitsss: Don't blame the politicians
sellers have been persuaded to put their properties on the market in the expectation of getting a high price, while those same high prices are, in some cases, deterring buyers
Stating the obvious?
Reuters: House prices seen overvalued
LONDON (Reuters) - House prices will ascend gradually this year and next but the market looks increasingly overvalued against shaky fundamentals, according to the latest quarterly Reuters property poll of analysts.
A different perspective on the U.S. recovery
Comstockfunds.com: Headlines Exaggerating Strength Of Economy
The near-euphoria in the market over the perceived surge in the economy is highly misleading. The year-over-year percentage increases we are seeing in various economic indicators are only an indication of how far down we were. It reminds us of the title of a book published a number of years ago entitled Been Down So Long It Looks Like Up To Me.
How women think
The Times: J.K. Rowling: The single mother's manifesto
I keep having flashbacks to 1997, and not merely because of the most memorable election result in recent times. In January that year, I was a single parent with a four-year-old daughter, teaching part-time but living mainly on benefits, in a rented flat. Eleven months later, I was a published author who had secured a lucrative publishing deal in the US, and bought my first ever property: a three-bedroom house with a garden.
Saturday, April 17, 2010
A startling claim about UK national debt
Burning Our Money Blog: Your Second Mortgage Problem
Wat Tyler asserts that "By 2014-15, even on the government's own highly optimistic projections, [national debt servicing] costs will reach nearly £73bn pa. That's £2900 pa for every single household - way more than their own average mortgage interest bill." If Tyler is right, barring a monetary and fiscal epiphany by the next government, whoever it may be, this crushing debt will load an extra £1,500 tax on the average household. Budget carefully before signing that mortgage!
Wealthy less wealthy fear
FT: Parties line up new property taxes
Property experts (Beckettian laugh) warned that hitting wealthy home buyers could derail the recovery in their easy money.
Mediterranean Rock?
Reuters (blogs): Worrying about a Greek bank run
Banks in Greece are experiencing runs in the billions of euros. Remember, depositors can remove their money and redeposit in another country in another bank and still do business in the euro. There are sixteen countries in the euro zone. The banking options for euro zone citizens are varied and abundant. The bank deposit scheme in the euro zone leaves deposit guarantees in the hands of the national governments. In this case Greece is the guarantor. And since the country is in trouble because if its fiscal deficit issues, its banking system is also in trouble. That is because the strength of the national banks deposit guarantees are dependent on the strength of the government’s finances.
The first step to root out pathology in banking
Greg Pytel: Just a start?...
Goldman Sachs case can be momentous as, hopefully, it is the beginning of a major clean-up. Americans have a pretty good record on that. They went after criminals behind Enron, WorldCom and Tyco scandals. They nailed Madoff. Hopefully they will get by the scruff of their neck all those who turned the financial system into a giant global pyramid scheme that caused the current financial crisis.
Fabrice Tourre
The Telegraph: Goldman Sachs, Fabrice Tourre and the complex Abacus of toxic mortgages
On January 23, 2007, Fabrice Tourre sat down to write what is likely to go down in the annals of the financial crisis as one of the most memorable emails to have found its way out of Wall Street. The Goldman Sachs banker shared his apparently true feelings on the state of the US housing market: “More and more leverage in the system. The whole building is about to collapse anytime now ... Only potential survivor, the fabulous Fab[rice Tourre] ... standing in the middle of all these complex, highly leveraged, exotic trades he created without necessarily understanding all of the implication of those monstruosities [sic]!!!”
Ugh! I hate cockroaches.
The Times: Overreaction, but more bank-bashing ahead
News that Goldman Sachs has been charged with defrauding investors sent the FTSE-100 down by nearly 1½ per cent and the Dow by a similar amount. It certainly doesn’t look good. As Wall Streeters like to observe, where there is one cockroach, there are probably others, which is why shares of Morgan Stanley, JP Morgan Chase and Bank of America were also spanked.
The blame game
The New York Times: A Wall Street Invention That Let the Crisis Mutate
In recent months, something more troubling has begun to emerge. In December, Gretchen Morgenson and Louise Story of The New York Times exposed the role that some firms, including Goldman Sachs and Deutsche Bank, played in putting together investment structures — synthetic C.D.O.’s, they were called — that were primed to blow up.
Friday, April 16, 2010
Still in denial.
UK & Global News Distribution: Housing Market Confidence at Two and a Half Year High
Four out of five (81%) UK homeowners think that property prices will continue to climb over the next six months, according to the latest Housing Market Sentiment Survey. According to the survey, only 9% of homeowners believe that property values will fall over the next six months whilst a further 10% expect prices to remain flat. There were 7,497 total respondents. 6,877 of these were homeowners.
Friday Funny!
The Telegraph: Lets go: The ever-rising lettings market
Increasing numbers of young professionals can’t afford to buy – so they rent, fuelling an ever-rising lettings market
My mom eat my dog ! then turned into an estate agent!!!
Yahoo news: The return of sub-prime mortgages
Specialist mortgage lender Kensington has just announced a range of “recession-busting products” designed to help borrowers with modest credit problems recover from the effects of the recession. It denies they are sub-prime, but these deals look and smell very much like sub-prime to me.
Giant Vampire Squid Harpooned
BBC: Goldman Sachs is accused of fraud
Goldman Sachs has been accused of fraud in a civil suit filed by US financial watchdog, the Securities and Exchange Commission (SEC). It alleges that the bank marketed complex subprime mortgage packages but did not reveal that a major hedge fund had bet against the securities. Goldman's shares fell 7.4% on the news of the accusations against the firm and one of its Vice Presidents.
Just for conspiracy theorists , the devil coming out to destroy the world
Iceland news: Face of the Iceland volcano revealed
forget buying a house, this will eat us all up, hey has anyone realised the hadron collider restarted recently...
A paradigm shift (maybe)
Renegade economist: Why is so much wealth in so few hands?
It is by design and with insidious purpose. The numbers of people that know this to be true is rising with every new revelation made in non aligned, independent and investigative sources.
Crazy financial products are imploding
Money Week: The crisis is not over
This reminds me of BCCI and the Icebank thing in the UK. This time its France. Germany too and the US. I bet the UK is in there somewhere...
NAEA @ The Comedy club Panto "the bad weather is behind us"
BBC: Housing market sees spring bounce, estate agents say
The number of people trying to buy or sell homes has picked up in the past month, according to estate agents. The number of potential sellers rose in March to its highest level for six months, the National Association of Estate Agents (NAEA) said. And the number of prospective buyers went up by 7% last month. The NAEA said spring had brought its usual increase in activity, and suggested sales would improve in the coming months.
Subprime was just Phase One
Counterpunch: Housing crashes again
In the US mortgage rates are edging higher, foreclosures are on the rise, mortgage applications are well down and government programmes that supported house prices are being phased out. National house prices dropped 4% over the last quarter. Subprime defaults may be over but now defaults on Option ARMs and primes are kicking in. e.g. BofA, which currently forecloses on 7,500 houses a month, expects to see that rise to 45,000 by December this year. Writer thinks that banks kept foreclosures low during QE to make it seem as if that was working, but now the banks are flush with reserves from that programme they can afford to offload some of the foreclosure backlog.
April 16th 2010 is here.
Market Oracle: Armstrong Cyclical Stock Market Turning Point April 16th Approaches
Though we can not say for sure what, if anything, will happen on April 16, 2010, it is clear that Armstrong is predicting (and has been since 1985) that volatility is the name of the game - which means unless you are in the know, get out of the stock market. If we have volatility in the stock market, you can be assured that there is volatility in non-financial aspects of the world as well.
Why preaching HPC will result in doors slammed in our face
The Times: You want the truth? Here’s my anti-manifesto
"Like the NHS, house prices are a subject steeped in mythology and voodoo economics, best expressed in the Thatcherite slogan that upwardly mobile prices would produce “a cascade of wealth” from one generation to another. Instead, here as in the United States, they helped to trigger the recession. Stable prices are crucial to the economy, but if even buyers do not want them, what do you do? The solution? The Lib Dems’ idea of mansion-bashing is a typical bit of phoney muscle-flexing, designed as a diversion from the issue. The problem is not just the rich, it’s the lot of us, in fact. The solution? Pain undreamt of. If we treat our main homes as businesses, tax them as a business." Hat tip to The Times for this dig at homeownerism.
The start of the fire sale caught in statistics and proudly presented by BBC as top business story
BBC News: Housing market sees spring bounce, estate agents say
"The NAEA said all this was encouraging, especially with more sellers around."
Well - What did you lot think ?
BBC News: Election TV Debate
We bantered here a short while ago about how Vince Cable performed, tonight his partner in crime seems to have come out on top aswell. The electorate seem to want a change. Could the Lib Dems really turn this around and judging by the opinions of the electorate that watched combined with the fact most would prefer to see VC in No. 11 could they win the election ?
Thursday, April 15, 2010
Wow!
The Telegraph: Morgan Stanley fears German exit from EMU
The Greek debt crisis is setting off a chain of events that may prompt German withdrawal from the eurozone, with grim implications for investors caught off-guard.
Another storming result for the Home-Owner-Ists
Evening Standard: Young people must wait until middle-age to buy first home
"Young Londoners are giving up hope of buying a property before middle-age with prices up to 30 times average income, a survey reveals today. More than half of first-time buyers in London expect to wait at least 10 years before investing. A further six per cent — one in 12 — say they will not be able to afford to buy before 2030, according to the YouGov survey of Londoners aged 18 to 30. As the political parties pledge to support home ownership, 37 per cent of young Londoners said they would delay starting a family if they c ould not buy a home, and 22 per cent said they would put off getting married... Affordability is particularly acute in the capital with house price to earnings ratio ranging from 8.5 in the cheapest borough, Barking & Dagenham, to 29.5 in Kensington and Chelsea."
One in three landlords about to contribute to the treasury
City Wire: One in three tenants at risk over gas safety
Is the BTL bubble bursting? All the "amateur" landlords not paying tax and not bothering to follow the rules? Maybe they should have given their money to the pension fund cowboys after all.
Boom times part 2 - Paragon shares rocket
Reuters: STOCKS NEWS EUROPE-Paragon up; Arden bullish on outlook
"The reason for that recent spike? Speculation that the buy-to-let mortgage specialist, which has been in run-off for the past couple of years, is poised to start lending again. That’s right, a buy-to-let mortgage lender, which relies on the wholesale and securitisation markets to do its business, is about to start new lending." this quote from FT Alphaville - http://ftalphaville.ft.com/blog/2010/04/15/203451/the-return-of-the-other-northern-rock/ Echoes of the heady bubble mania days.
Off topic, iceland firstly take our money, now they smother us in ash...
Bbc: Iceland's volcanic ash halts flights in northern Europe
you have to laugh... when you figure they take the money people banked, then smother us all in ash... Does anyone know what financial loss will be attributed to this ash? EG houseprices went down because of it? oh it wasnt that it was the snow.. people didnt shop through fear of ash, i can just hear the headlines next month.
US slips into second gear - just as planned!!
Yahoo Finance - Associated Press: Foreclosure rates surge, biggest jump in 5 years
US homes facing foreclosure jumped 16 percent in 1st-quarter as banks take back more homes. LOS ANGELES (AP) -- A record number of U.S. homes were lost to foreclosure in the first three months of this year, a sign banks are starting to wade through the backlog of troubled home loans at a faster pace, according to a new report. RealtyTrac Inc. said Thursday that the number of U.S. homes taken over by banks jumped 35 percent in the first quarter from a year ago. In addition, households facing foreclosure grew 16 percent in the same period and 7 percent from the last three months of 2009.
Gordon's Broken Promises Revisited
This Is Money: Gordon Brown and broken house price promises
Gordon Brown said: ‘I will not allow house prices to get out of control and put at risk the sustainability of the recovery.’ Until a political leader or Chancellor comes out and actually states that high house prices are bad, we’ll be at the mercy of those who say one thing and then do the opposite when a property boom delivers a short-term boost to the economy at the expense of long-term stability.
Another firesale over in Eire
Irish Independent: Luxury homes for €99,950 as receiver orders fire-sale
Now this is more like it: "Three-bedroom semi-detached houses that started at €250,000 will now range between a modest €99,950 and €117,950 when they go back on the market on April 24 and 25."There have been several sell-offs of new builds but this is the first I have seen where the price actually seems about right for houses with decent sized rooms and gardens. Only concern would be that these are often sold off when the developer went bust before the homes are connected into the local infrastructure, mainly phonelines and leccy. So buyers may find themselves having to spend several thousand euro to the utilities companies to get themselves plugged in! But every time I read an article like this my heart leaps with gladness as the forces of the free market weigh down on prices.
1000 similar municipals in debt in france....
Business week: Saint-Etienne Swaps Explode as Financial Weapons Ambush Europe
The worst global financial crisis in 70 years arrived in Saint-Etienne this month, as embedded financial obligations began to blow up.
But are approvals at pre-recession levels ? No..
Telegraph: Mortgage applications at pre-recession levels
Last month was the third consecutive monthly rise in mortgage application, up 112pc from the same time last year. Grenville Turner, group chief executive of Countrywide, said: "Widespread uncertainty surrounding the economy and election does not appear to have deterred mortgage customers, which might partly be due to the number people who have sat tight during the recession and are now ready to move regardless.
Interesting development
The Telegraph: Greek aid in doubt as German professors prepare court challenge
The legal challenge has far-reaching implications. It threatens to cloud the issue for weeks or months and may ultimately force Berlin to withdraw support, raising the risk of wider systemic crisis in Southern Europe. Dr Karl Albrecht Schachtschneider, law professor at Nuremberg and author of the complaint, told The Daily Telegraph that he will be ready to file within days and will ask the court for an expedited procedure. A ruling could occur within a week, but may take as long as six months. "This court hearing is going to be very dangerous," said Hans Redeker, currency chief at BNP Paribas. "It could lead to Germany itself being catapulted out of the currency union. Once investors begin to fear this, there will not be single euro in further financing for the EMU periphery."
Wednesday, April 14, 2010
This will get HPC's public sector supporters excited
Times: I’m not worth £213,000. This wage bill is mad
There is one universal truth in a free market economy — Micawber’s law: Annual income £20, annual expenditure £20 and sixpence, result misery.
Prop it up!!
Find a property: First time buyer homes rise in price!!
Without a bottom end there is no top! The average price is truly mindblowing!!!!
Gordon: "Debt was not the problem. We'll keep interest rates low"
Mirror: Gordon Brown: I'm fighting for five more years as Prime Minister
Bob gives Tom 20 quid to buy some Heroin for him. Tom can get it for 15 quid so, keeping the extra 5 quid, encourages Bob to ask him for more and more Heroin until Bob overdoses. Tom, having gambled away all his collected money, forges 20 quid, buys more Heroin, injects himself with some and injects the still unconscious Bob with the rest. Bob wakes up and Tom runs for Mayor on the pledge of "cheap Heroin for everyone". Bob votes for Tom.
I think he is right, do you?
Reuters: Markets could be derailed again, warns Soros
Railway porter-turned-billionaire financier George Soros delivered a stark warning last night that the financial world is on the wrong track and that we may be hurtling towards an even bigger boom and bust than in the credit crisis. The man who ‘broke’ the Bank of England (and who is still able to earn a cool $3.3 bln in a year) said the same strategy of borrowing and spending that had got us out of the Asian crisis could shunt us towards another crisis unless tough lessons are learned.
Reward criminals, penalise honest people, welcome to britain
Yahoo: Taxman penalises someone for paying too much
The self-employed man, who has not been named, tried to reclaim £3,000 in overpaid tax for the year to April 2010, but Revenue & Customs calculated that he was owed £1,000 and fined him £1,400 for the error.
Put gold miners on your radar screen
Investment Postcards: Put gold miners on your radar screen
More than 60% of the 32 stocks in the Gold Miners Index are now in point and figure uptrends - a positive sign not only for gold dtocks but also for bullion.
Getting a loan will be pricier
Money cnn: 10 foreclosures for every home saved
While the panel commends the Treasury Department for its push to convert more trial adjustments to long-term modifications, it lays out several concerns, including the long-term sustainability of the modified mortgages and the ultimate cost and goals of the program. Also, the panel is concerned that the half-dozen foreclosure-prevention programs launched by Treasury over the past year has resulted in confusion and delays.
30 Year IR down trend is about to turn
NY Times: Interest Rates Have Nowhere to Go but Up
Nice piece by the NY Times on why IR will go up. Can't be much different in the UK. "Each increase of 1 percentage point in rates adds as much as 19 percent to the total cost of a home, according to Mr. Mayer. "
Sarkie Starkey
BBC - This week: Historian David Starkey on economic lessons from Canada
Not wholly on-topic, but quite fun..
Ouch!
Bloomberg: Morgan Stanley Said to Lose 61% on Real Estate Fund
"Morgan Stanley, which once ran the biggest property-investment arm among Wall Street banks, expects to lose $5.4 billion, or 61 percent, of its $8.8 billion global fund from 2007, said a person familiar with the situation".
Tuesday, April 13, 2010
Over the Hill (again)
Times: House prices fall despite increased interest from first-time buyers
Apparently, first-time buyers returned to the housing market in February but their increased numbers failed to prevent a slight decline in house prices as figures from the Department for Communities and Local Government reveal that house prices fell by 0.1 per cent between January and February.
Bye Bye Banks
The Guardian: Gordon Brown admits banks needed more regulation
Gordon Brown tonight admitted he should have regulated the British banks more than he did, and said he did not do so due to lobbying by the City.
Greeks buy up Laandaaan innit
Guardian: Greek wealth heads to London prime
Sorry this isn't some wingnut rubbish about the idiot government or the even more useless alternative - its about house prices. Forgive me.
U.S. Financials profit
Bloomberg: U.S. Bank Profit ‘Imbalances Are Re-Occurring’: Chart of Day
Record low U.S. interest rates are boosting the profitability of financial companies, creating the same kind of imbalances that fueled the credit crisis, according to Jim Reid, a Deutsche Bank AG strategist in London.
Recession? What recession?
Mail: Race relations chief Trevor Phillips spent over £6,000 on state credit card
No doubt we'll have the usual holier than thou "its the Mail" comments but this exemplifies how we are being pooped on by the elite.
Senior banker spills the beans
Huffington post: 'The Fourteenth Banker,' Anonymous Bank Insider, Describes His Moral Crisis: 'The System Is Built To Be Gamed'
Interview with then man behind the The Fourteenth Banker Blog -
The lunatics have taken over the asylum
Express: EXPENSES SCANDAL MPS GET LEGAL AID
Take your blinkers off for a few minutes, forget that this and the article on the link below are from the Express and Mail respectively and be honest. http://www.dailymail.co.uk/news/article-1265446/Single-mother-soldier-wins-discrimination-case-Army-failed-provide-adequate-childcare.html The 3 politicians are just taking the p*ss. As for the single mother soldier, in any job there has to be discipline and if you sign up for the armed forces you expect and accept that. To quote the ancient proverb: "Those whom the gods wish to destroy they first make mad." However, the following ancient Greek proverb may be more to the taste of HPC’ers: “The company of just and righteous men is better than wealth and a rich estate.”
Northern Crock was cooking the books
Guardian: Former Northern Rock boss fined £500,000 for misleading City
The former deputy chief executive of Northern Rock has been fined £504,000 and banned from serving on the board of another UK bank after misreporting the number of mortgage customers who had fallen into arrears. The Financial Services Authority imposed the fine on David Baker after he admitted making misleading statements to the City over the state of Northern Rock's loan book, in the months before the bank collapsed into public hands. His actions meant that nearly 2,000 customers were excluded from the data, disguising how many had missed mortgage payments.
China tighthening is a joke
Andy Xie (ex Morgan Stanley Asia Chief Economist): China's Tightening Is A Joke, Local Governments Are Preparing Another Big Round Of Real Estate Inflation
This shows that if the government wants to pop up property market at everyone else expenses, it can. Not that much different from UK government really - she is now the owner of Northern Rock etc and property crash would be against her interest.
Boom times
London Evening Standard: Tower 42 skyscraper on market for £300m
"A deal would be the largest in the Square Mile this year, indicating a growing desire by investors to bid for trophy assets." Interesting to see if it sells. Skyscraper construction is notorious for being a good predictor of an oncoming economic slowdown, see for example http://www.moneyweek.com/news-and-charts/economics/a-recession-indicator-thats-hard-to-miss.aspx
Higher supply, lower demand equals....
Telegraph: Sellers return to housing market
Estate agents said house sellers are returning to the market in a way not seen since May 2007, just before the property market crashed. .....the RICS survey suggested that 21 per cent more estate agents were seeing a growth in the number of house sellers than a fall in numbers. This is the highest figure since May 2007, just before the 13-year-long house price bubble burst.
P/E ratio for the UK house market doesn't compare well to shares or German property
The Right Side: Tempted by Buy-to-let in the UK? Don't Be!
To value any investment, it’s essential to look at the price earnings ratio (P/E). And I’m not talking about the ‘price to earnings’ figure quoted in the media. When the media talk about property, the price to earnings figure you’ll hear about is a so-called ‘affordability indicator’. That is simply a ratio of average house price to average earnings (wages). When we’re looking at buy to let, the P/E that we want is the house price (“price” or P) divided by the after-tax rental income (the “earnings”, or E). As my friend told me, a BTL rental yield is about 5%. But after tax, rental voids (the time lost while you’re looking for tenants) and maintenance, that 5% yield drops down to nearer 3%. And a 3% yield gives us a P/E of 33 times...
Sellers simply can't wait any longer to cash in their prizes for no work!
Daily Mail (RICS): Homeowners in a hurry to sell before the election fallout
Property website Rightmove said 105,000 new properties were advertised for sale on its website in March, the biggest influx for 18 months. David Pank, a director of Manning Stainton, based in Horsforth, near Leeds, said many homeowners simply cannot wait any longer. He said: 'Properties are being listed at a rate not seen since 1997. Some of our new sellers are two- earner families who have turned into one-earner families because one of them has lost their job. 'They are nervous about interest rates going up.'
Could a hung parliment stall the property market?
The Times: Pre-election nerves put housebuyers off
Pre-election jitters are beginning to affect homebuyers, according to estate agents, who reported a fall in sales last month and the slowest price growth since July 2009. In March 9 per cent of surveyors reported a rise rather than a fall in prices — down from 18 per cent in February and 30 per cent in January, according to the Royal Institution of Chartered Surveyors (RICS) housing survey published today. The industry body attributed the slowing price growth to buyers being reluctant to commit themselves before May 6 and a simultaneous rise in the number of homes coming on to the market. The percentage of surveyors reporting a rise in new inquiries fell from 7 per cent to zero on the previous month.
Impossible returns create bubbles?
Guardian: Pension funds chasing highest returns on investment force behind recession
Investors are creating asset bubbles as they move around the globe. Earlier this year there were worries about a commodities bubble. Now a bubble in bonds is ready to burst. Property is also on the way back. In the early 1990s it took property prices six years to begin growing again after the recession and 10 years to recover their losses. This time they declined for 18 months at most and in London are racing back to bubble-like levels, despite this recession being the worst for 60 years.
More BBC spin?
BBC News: House-seller numbers 'outweighing buyers'
The number of people trying to sell their homes has hit its highest level since May 2007, the Royal Institution of Chartered Surveyors (Rics) said. Rics said new instructions from sellers in March outstripped enquiries from would-be buyers for the third month in a row.
Monday, April 12, 2010
As thick as thieves
BBC: Icelandic authorities 'negligent' over banking collapse
It found that money had been withdrawn by "insiders" only days before the banks went bust. The matter has been referred to Iceland's prosecution service. Anne Sibert, who now sits on the Icelandic central bank's Monetary Policy Committee, was hired by Landsbanki in January 2008 to produce a report on the vulnerability of the Icelandic banking system. "I knew nothing about the Icelandic banking system, so I googled it. And after 10 minutes I was horrified… I realised pretty quickly that the situation was not viable", she told BBC News. Ms Sibert, along with husband and fellow economist Willem Buiter, said the banking system's key weakness was insufficient reserves at the central bank to cover foreign currency liabilities, including UK depositors at Icesave.
U.K. Is Vulnerable After Greek Deal, Strategists Say
Bloomberg: U.K. Is Vulnerable After Greek Deal, Strategists Say
The U.K.’s budget shortfall reached 11.8 percent of gross domestic product in the past fiscal year, near Greece’s deficit of 12.9 percent of GDP last year. Greece’s gap is the highest in the euro’s history and more than four times the European Union’s 3 percent limit. “We think that the U.K. could be the next concern for the market,” Pierre-Olivier Beffy and Amelie de Montchalin wrote in a Global Economics Research and Investment Strategy report for Exane BNP Paribas today The Paris-based economist and analyst added that the “British situation is worse” than that of Portugal, Spain or Italy.
Why estate agents need house prices to fall
MoneyWeek: Why estate agents need house prices to fall
Britain's estate agents need high sales volumes more than they need high prices. And the only way they're going to sell more houses is if prices fall
No need to wait for a crash anymore
Yahoo: The cheapest street in Britain
If you want a bargain, then the cheapest street to buy a home in England or Wales is Fernhill in the Welsh region of Mountain Ash, where the average property costs just £28,600 . That's only a little above the UK's average wage, so represents a seriously cheap deal. The street also topped this poll last year, though the value of homes there has actually increased over the past year from £24,640.
Wonder if france will be the next greece?
Yahoo: French banks among worst hit by capital uncertainty
French banks may be among the most exposed in Europe to tighter capital requirements due in 2012, despite having emerged relatively unscathed from the global financial crisis. Fears that stricter guidelines will leave French banks like Credit Agricole (Paris: FR0000045072 - news) and Natixis (Paris: FR0000120685 - news) short of billions of euros in core capital have hurt their share valuations and are likely to persist until more clarity emerges.
It's only London that has rising house prices
Home.co.uk: London Leaving Regions Behind
Take away London and there is no house price recovery
Some job losses for smugdog
Manchester evening news: Buckingham Bingo calls time on Didsbury
The company added: “The closure follows a combination of three factors that questioned the club’s economic future and which have had a severe affect on other licensed bingo clubs throughout the UK.
BBC News in negative high house price story shocker
BBC News: High house prices 'creating brain drain' across Dorset
As the title indicates: an actual story on BBC News about house prices which is negative. "The estimated average house price for Dorset in 2008 was £262,332, which is 15 times what most residents earn, at about £18,000." Interesting they are using 2008 figures... nonetheless, while this article only goes so far as to waffle on about the requirement for greater social housing, shared ownership - yadda yadda - at least it seems to have gotten one half of the equation right... Except at the same time it does appear to simply be crocodile tears on the local news (with a minimal audience compared to national news) so as to demonstrate apparent impartiality. YEAH RIGHT.
Is there anything brown wont do for votes? Bahhh Bahhh
Yahoo: General Election 2010: Northern Rock customers to get shares
Shares in Northern Rock will be handed to its customers under plans in Labour's manifesto to turn the troubled bank back into a building society.
Putting out the fire ... with gasoline
Metro: General Election 2010: Brown tempts young with cash savings pledge
"The [Labour Party] manifesto, launched in the Midlands today, will give all basic rate taxpayers between 18 and 30 the chance to save money in a government-backed ‘Super ISA’ which could cost £30million a year." What's the point? As long as this or the next government is determined to keep house prices racing away to the tune of £1,000 a month, there is just no point in the 18 to 30s saving, all that this will achieve is persuading the mugs at the bottom of the ladder to pay ever larger deposits when they finally cave in and buy a home.
Everything that's wrong in this country?
Times online: Savoy upgrade £1.6 million per room
50% owned by hbos which is 41% owned by the taxpayer...quite how you can charge £1.6 million per room is beyond me..sounds like a total rip-off....you could build a housing estate for that and why is hbos got anything to do with this?
Sharpen the Scythes
Times: I’m paid too much, says police chief, and so are lots of other public service bosses
The pay packages of public sector chief executives are unjustifiable, irresponsible and must be reined in, according to one of Britain’s top police officers.
Complicit in the boom, culpable in the bust
Guardian: Treasury saw buy-to-let threat to first-time buyers
The Treasury acknowledged privately as early as 2004 that a burgeoning buy-to-let market could be crowding out first-time buyers, according to a government report released by campaigners who lambast the authorities for allowing the landlord boom to continue regardless.
Sunday, April 11, 2010
Harsh reality, what we have all known for a while.
Telegraph.co.uk: IEA warns that both Labour and Tories underestimate spending cuts
Interesting 'stating the obvious' article. I don't know if anyone has seen this but it highlights what is needed relatively well. However, a more accurate title would probably be 'What will actually happen after the election'. This is my first post so apologies if it's already been highlighted, I had a good look.
Nationwide restricts cash withdrawals
Yahoo: Nationwide restricts cash withdrawals
Nationwide said the change was needed to reduce queues in its branches and that there would be alternatives for those affected. It said that about a third of all its counter transactions were carried out by less than 8pc of its customer base.
Fairy dust wealth
Observer: The country's renewal is being betrayed by cheap, paltry politics
"Quantitative easing has become the most flagrantly regressive public policy intervention in modern times. It has enriched the wealthy further by putting a floor under especially high-priced property, boosted share prices and done nothing for small- and medium-sized business."
London hits peak performance
Times online: London hits peak performance
New research from estate agents John D Wood shows that as far as the London market is concerned, it’s now a case of: crisis, what crisis?
Janet Daley - Cogent as always
Telegraph: Will someone please tell us the truth?
What a strange time we are in. The ruling party has definitively lost the argument – so much so that the public performances of its spokesmen have become embarrassing. But still the Opposition has not won it. The country is in crisis both economically and in terms of belief in the democratic process itself, but is convinced that no political leader is actually telling the truth about the future, or even about his own motives. Everyone is aware that drastic measures are going to be required if the country is to remain functional, but no one in the political class seems prepared to engage in the real debate that most voters say they want to hear.
Hedge your bets
Times: Close election to hit home loans
"Brokers have warned that a hung parliament could push up the cost of new mortgages by about £1,200 a year. Borrowers applying for a rate now are almost certain to complete the deal after May 6, which means homebuyers and those on variable deals hoping to fix before interest rates rise face a tough choice".
Up to the eyeballs
Telegraph: Don't let the voters know we face bankruptcy
"Four huge shadows hang over this claustrophobic election, about which the three main parties will be trying to say as little as possible. Debt.. is now growing so fast that it is difficult to find ways of bringing home how stupendous it has become. The Taxpayers' Alliance has tried to do it by pointing out that public debt is rising by £447,575,342 – virtually half a billion pounds – every day".
Saturday, April 10, 2010
NAEA talks the market up carefully selecting the statistics that suit their argument
Western Morning News: House Prices on the Rise
The title infuriated me firstly because it looks as if it was written by the NAEA (with a little journalistic polish) and secondly because they seem rather selective in their choice of statistics. The Nestoria website (admittedly volumes are not reported - probably low) has just reported a 25% drop in price of 3 bed houses in my immediate area for Mar 2010 (which confirmed my observations based on Property Bee) and according to Rightmove the average detached house price in my area has fallen from £400k June 2009 to £258k Nov 09. (Not sure why I can't find lastest stats on market trend page - anyone?). I suppose like the Evening Standard leading article discussed a day or so ago it is the headline that is most at fault. Newspapers have to be sold somehow I suppose!
Tip of the iceberg
Migrant city's cry for help: Mail
This will upset those who live in Basingjoke, Tonbridge etc who don't see the effects of uncontrolled immigration. And before anyone accuses me of being racist and / or a BNP supporter, I'm not, neither am I a fan of the Mail. However, this situation needs highlighting as it is repeated across the UK and the political elite of all shades simply choose to ignore it. The relevance to HPC? Many contributors to HPC moan about the shortage of housing, well here's a major reason.
Too much easy "credit"
Guardian: Priced out of property? The iPhone generation don't save enough
Should read, Priced out of property? Years of easy credit pushed prices to ridiculous levels. The reason her mother "never bought herself the things she wanted, and everything spare went towards making our childhoods as close to the privileged golden years all parents want for their children" was the non-availability of insane amounts of credit.
Debt repudiation: good idea or bad idea?
Zero Hedge: Momentum Grows for Debt Repudiation
Ambrose Evans-Pritchard wrote in 2009: In the end, the only way out of all this global debt may prove to be a Biblical debt Jubilee. Economist Steve Keen is also calling for a debt jubilee, stating: We should write the debt off, bankrupt the banks, nationalize the financial system, and start all over again. We need a twenty-first century jubilee. [We’re going into] a never-ending depression unless we repudiate the debt, which never should have been extended in the first place. If we keep the parasitic banking sector alive, the economy dies. We have to kill the parasites and give a chance to the real economy to thrive once more and stop the financial crooks doing what they did this time around ever again.
A step in the right direction
Independent: Move to protect tenants set to become law
A move to give tenants greater protection from being evicted if their landlord defaults on mortgage repayments is set to become law after clearing the Lords today. The Mortgage Repossessions (Protection of Tenants) Bill addresses the situation in which the mortgage lender did not realise the home was being let and sought to repossess giving the tenant no notice. The Bill gives tenants the right to be represented in a possession hearing and for the court to delay repossession by up to two months.
Interview with Gordon Brown
Times: Brown: People are cruel but I don’t get hurt by abuse any more
'Mr Brown says that war is always tragic but adds: “I cannot be in politics and a pacifist.'' '
I have my pre-order in already
Amazon: 2010: The Inquest (Paperback)
Fred Harrison warned the Blair government in 1997 that house prices would peak in 2007. He alerted Gordon Brown - that the housing crash would drive the economy into the depression of 2010. The author delivered the blueprint for avoiding the collapse, and warned the politicians: 'I am your worst nightmare. I know exactly why New Labour will fail, if that is indeed to be the outcome, and I will be obliged to chronicle the developments [so] that the voters will know how to apportion responsibility.' Harrison keeps his promise, explaining how a political class betrayed a nation while enriching itself.
Another nail in the demand coffin
Guardian: Couples waste 5bn
Couples that want to be together but run two homes waste £5bn. Maybe so but its their money. I can only guess one day they will get together properly. When the cat dies, or when they grow up, or when they dare tell mum and dad they don't really want to get married, or whatever the reason. All fair enough - its a free country (sort of). But please don't tell me there's a "shortage" of housing.
Cheer up, boomers!
The Telegraph: Joanna Lumley calls for ‘adoptive grannies’ to provide after-school care for children
“We all say it to each other: 'When I get to that stage, for pity’s sake, collect up the pills, mash them up with some jam and I’ll go off on cloud nine.' Everyone says that, because nobody wants to be stuck in a home, drooling, unvisited and unwanted and unloved. So maybe if old people’s homes were better, fewer people would think, 'God what a bloody old age I’ve got come ahead: lonely, frightened, ill, hating it all.'"
All's well in EuroLand
BBC: Greece rescue hope sends euro and stocks higher
There you go, everything's fine. Nothing to worry about. Markets are on the up. My @rse!
Friday, April 9, 2010
House Price Inflation
Blog: House Prices
Inflation is usually regarded as bad, but not with houses as many people today think that rising house prices are a good thing. I don't
Smoke and mirrors
Wsj: Major Banks Mask Their Risk Levels
Major banks have masked their risk levels in the past five quarters by temporarily lowering their debt just before reporting it to the public, according to data from the Federal Reserve Bank of New York. ... banks have become ... sensitive about showing high levels of debt and risk, worried that their stocks and credit ratings could be punished.
Gordon is a moron
Mail: Labour attacked for giving £170m in aid to China
I'm not a fan of the Mail but this caught my eye. Given our current financial problems surely it's wrong to be giving aid to the world's third largest economy, in which case Chinese poverty should be the responsibility of the Chinese government?
Did Tony see the housing bubble coming?
Daily Telegraph: A Prime Minister who knows something about the economy?
Here’s a quote – see if you can guess who said it and when: “The real problem we’re left with is that we now have an economy which is so locked in to international trading, so dependent on what happens in America, that anything that happens in Wall Street reverberates around the world. Now the key lesson that we’ve got to take out of this is the necessity for governments of any political colour to work together to stop the excesses of the free market, because that’s what’s really been shown over the last few days.”
Higher Interest Rates coming
Telegraph: Petrol price surge raises the prospect of higher interest rates
A rise in the cost of petrol drove a bigger-than-expected increase in producer prices in March, pushing the pound up and increasing the likelihood that the Bank of England will raise interest rates by the end of the year.
Meaningless Figures
Financial Times: House price indices out of kilter
House prices rose in March following a decline in February but property experts have warned that national house price indices have become “meaningless” in the current environment.
The gold bulls are right – US inflation is on the up
Investment Postcards: The gold bulls are right – US inflation is on the up
Is the rising gold price conveying a particular message about higher inflation ahead? Glancing over a number of economic charts, showed up rather interesting results, as reported in this article. Here is the link: http://www.investmentpostcards.com/2010/04/09/the-gold-bulls-are-right-%E2%80%93-us-inflation-is-on-the-up/
Number of first time buyers falls sharply
Yahoo: Number of first time buyers falls sharply
The proportion of people who plan to buy a property who are first-time buyers has dropped for the second consecutive quarter to 25.8pc, according to property website Rightmove (LSE: RMV.L - news) . The group warned that the figure was well down on the 40pc of housing transactions that would usually be carried out by people buying their first home in a healthy market.
Mortgage approvals fall again
Yahoo: Mortgage approvals fall again
The number of mortgages approved for house purchase fell for the third month in a row during February. *******can anyone tell me how if this is happening, sales are supposed to be increasing?******
Did this bet win because G Sachs made the same bet?
Telegraph: Fed boss Greenspan says no-one saw the crisis coming. Really?
Michael Burry was the guy who made billions on CDSs that bet that packaged mortgages would nosedive. But there was no conventional market in CDSs, so for him to win his bet somebody had to decide to mark up their value. The CDSs were designed by Goldman Sachs and they didn't rise in value (as the fundamentals suggested they should) until the Vampire Squid itself found a greater fool that allowed it to make the same bet as Burry. Once the Squid was "on" the same horse as Burry the required upwards revaluation of the CDSs took place.
One for str2007
Bournemouth Daily Echo: Southampton house price slump shock
Last month house sales across the South East increased by 5.9 per cent compared to February, according to the latest Agency Express Property Activity Index. The study, which found that year-on-year house sales rose by 48.8 per cent compared to March 2009, reported that over the same period house sales in Southampton slumped by 25 per cent, to their lowest level for two years. London saw a 5.4 per cent increase in monthly house sales in March with Brighton experiencing a rise of 3.8 per cent.
Facts About 40 Year Mortgage Rates
Blog: Facts About 40 Year Mortgage Rates And 40 Year Mortgage Rates Calculator
40 Year Mortgage Rates And 40 Year Mortgage Rates Calculator Information to you 40 year mortgage rates are comparable rates provided for shorter full term mortgages, such as 20 year and 30 year mortgages or even interest only mortgage rates and other jumbo mortgage rates. The reason 40 year mortgages are provided is that a few houses cost more than in early years and this allows for a house customer to offer a nice residence for their home while paying up a longer time period.
Election and House Price advice from Lemmy
Lemmy from Motörhead: Eat the Rich
Come on baby, eat the rich!!!
Cloud Cuckoo Land
Motley Fool: We're All Living On Fantasy Island!
An old article but still very pertinent today.
Thursday, April 8, 2010
Bull food anyone?
The Daily Telegraph: UK house prices rise at fastest pace for more than two years, Halifax says
Low interest rates seem to be doing the trick. For now....?
Stealth Taxes, Falling Pound weigh heavy
SKY: Pumped Up: Petrol Prices Hit Record High
Average petrol prices have risen to an all-time high of 120p a litre, eclipsing the previous peak of 119.7p seen in July 2008, new figures show.(If people are spending more on Food, Energy, Water & Petrol how can they afford higher house prices?).
Vote Tory ?
BBC: 1992: UK crashes out of ERM
Would it be perverse to suggest voting the Tories in to boost IRs for prudent savers... "Chancellor Norman Lamont raised interest rates from 10% to 12%, then to 15%, and authorised the spending of billions of pounds to buy up the sterling being frantically sold on the currency markets."
And the rest...
Yahoo: Average person's wealth fell by £16,000, ONS said
The average household wealth per person dropped by a substantial 15 per cent from £123,000 to £107,00, according to the Office for National Statistics, which published the latest instalment of its social trends report. This was the first fall in seven years
Stay calm. Panic will make things worse
Zero Hedge: Freefall: Greek Bonds Tumble, 3 bps Away From Critical 450 bps Threshold, ASE Index Plunges 5%
Panic in Greece as total freefall envelops both the bond and the stock market. The 10 Year is now at an absolute record 447 bps spread to bunds, or in the mid 7's in absolute terms. The stock market has tumbled by about 5% and Greek CDS have surged to a record.
Greek Bank tellers working overtime
Fundstrategy: Greek banks seek bail-out to counter €10 billion outflow
Greece’s four biggest banks are seeking state aid after savers took €10 billion (£8.8 billion) worth of deposits out of the financial system. According to the Financial Times, in the first two months of the year local savers moved deposits out of Greek banks to the value of about 4.5% of the total banking system. George Papaconstantinou, the Greek finance minster, said yesterday the banks–Alpha Bank, EFG, Eurobank, National Bank of Greece, and Piraeus Bank–had asked for access to the remaining funds of a €28 billion support plan.
Rates on hold again - despite recent CPI figures
BBC: UK interest rates kept on hold at 0.5%
UK interest rates have been kept on hold at the record low of 0.5%, after the Bank of England's latest meeting. The Bank also decided not to pump any more money into the UK economy under its policy of quantitative easing (QE). Interest rates have now been at 0.5% since March 2009, and analysts do not expect any rate rises soon while the economy continues its recovery.
Rates & QE held
BoE: Maintains Bank Rate at 0.5% and Maintains the size of the Asset Purchase Programme at £200 billion
he Bank of England’s Monetary Policy Committee today voted to maintain the official Bank Rate paid on commercial bank reserves at 0.5%. The Committee also voted to maintain the stock of asset purchases financed by the issuance of central bank reserves at £200 billion. The minutes of the meeting will be published at 9.30am on Wednesday 21 April.
"housing, water and fuel now represent the biggest area of spending"
BBC: UK household savings lowest in 40 years say ONS
in the UK are saving less than at any time in the past 40 years, according to the Office for National Statistics (ONS). The household saving ratio in the UK in 2008 was 1.7% of total resources, the lowest recorded since 1970, and well below the 7.6% average for that period.
The Greek tragedy explained..
WSJ: Investors Playing Defense Heighten Greek Debt Woes
A good, informative, and well written article about the Greek debt problem, and the market reaction to it. (Greek bond yields have reached a new high this morning..)
As Mad as a March Hare?
Halifax: March: +1.1% MoM +5.2%YoY
"House prices increased by 1.1% in March, partly offsetting February's 1.6% fall. This was the eighth rise in the past nine months, taking the average price to 9.1% above the low point reached last April. .... There are signs that an increase in the number of properties available for sale is beginning to reduce the imbalance between supply and demand. This should help to contain the upward pressure on house prices."
But £433 a person to advise debtors is a success
BBC: Government debt advice strategy branded a 'failure'
The Government has spent £600m on giving people debt advice (I presume that is how to get out of it). Only one project, which cost £433 a person has been deemed a success and "good value for money". The figures are so big I had to get out the scientific calculator !
Hidden precipice
Telegraph: Sovereign debt crisis at 'boiling point', warns Bank for International Settlements
The risk is an "abrupt rise in government bond yields" as investors choke on a surfeit of public debt. "Bond traders are notoriously short-sighted, assuming they can get out before the storm hits: their time horizons are days or weeks, not years or decade. We take a longer and less benign view of current developments," said the study, entitled "The Future of Public Debt", by the bank's chief economist Stephen Cecchetti.
Self-satire
Daily Express: GYPSIES WHO GET INTEREST-FREE LOANS COURTESY OF YOU
GYPSIES are being offered interest-free loans to buy land for their caravan sites. Mendip Council which provoked anger with the scheme said yesterday it would help to banish the “negative stereotype” of rubbish-strewn rented camps. But last night the project, which will see travellers borrow up to £50,000 a time, was dismissed as an insult to struggling buyers from other communities. Tessa Munt, prospective Liberal Democrat MP, said Mendip Council ought to be helping all first-time buyers.“House prices here are high,” she added. “Mendip ought to publicise the homebuy scheme more.”
Wednesday, April 7, 2010
Has anyone seen a 'Recovery' around here? So much for the 'Green shoots'.
Bloomberg: British Pound Declines as Services Growth Misses Estimates
The pound fell against the dollar after a report showed weaker-than-forecast growth for U.K. service companies, adding to concern that the economic recovery may falter.
From the UK to the BIS: we don't do austerity measures
The Telegraph: UK needs 'drastic austerity measures' to prevent debt explosion
Britain will need "drastic" austerity measures to prevent public debt exploding out of control, the Bank for International Settlements (BIS), has declared. Interest payments on the UK's public debt will double from 5pc of GDP to 10pc within a decade under the bank's "baseline scenario" before spiralling upwards to 27pc by 2040 – by far the highest among the OECD club of developed countries.
Use your mortgage to beat inflation
MoneyWeek: Use your mortgage to beat inflation
If you've got a mortgage, it's time to think about inflation. With UK Government debt now standing at £857.5 billion, it's likely that our government will encourage inflation at some point. How else are they going to clear this great big debt?
Common sense
TheLondon Irvine Report: More on “God’s Work.”
"There is no example of a nation become rich by paying its debts. There are dozens of examples of nations becoming rich by defaulting or renegotiating." We open today with the rise of the just default camp, in the world of sovereign debt. Since much of the debt was accumulated corruptly, between brain dead or venal politicians on the take, and great vampire squids aiding and abetting a crime on the public, just default, and let the great vampire squids take the heat and most of the loss. Kings and countries have been doing it since time immemorial, this time it's not different after all.
Hmmm..........
BBC News: UK economy set to outpace most rivals, says OECD
The UK economy is forecast to outstrip its G7 rivals in the second quarter of this year, says the Organisation for Economic Co-operation and Development.
Tax relief on holiday homes to continue
Reuters: Plans for broadband tax delayed
A third measure announced by Chancellor Alistair Darling in March's budget to scrap tax relief on letting holiday homes - raising 25 million pounds in 2011/12 and 15 million pounds in 2012/13 - will also be shelved until after the May 6 election. If Labour hold on to power, the broadband tax and holiday home measure will be reintroduced in a second finance bill and the party will look to extend the cider duty increase. The Conservatives, ahead in opinion polls, say they have alternatives to all three measures.
After Australia's IR increase...
Bloomberg: BOE Will Keep Rate at 0.5% Until at Least November, BCC Says
The Bank of England will keep the benchmark interest rate at a record low of 0.5 percent until at least November because the economic recovery remains “vulnerable,” the British Chambers of Commerce said. “In the last forecast, we envisaged an increase to 0.75 percent in August and to 1 percent at the end of the year,” BCC Chief Economist David Kern said in a Bloomberg Television interview yesterday. “If you asked me what I think today will happen, I see the first to 0.75 percent in November or December, and then only next year to 1 percent or higher.”
Governor Glenn Stevens will increase the overnight cash rate target to 5.25 percent by the end of Ma
Bloomberg: Australian Export Boom May Prove Rates ‘Game Changer’
RBA’s economic analysis department, said “the growing issue is whether 4.75 to 5 percent will be sufficient, or whether they’ll have to keep punching rates higher through 2011.”
Tuesday, April 6, 2010
Another bullbias article?
Bloomberg: U.K. Homeowners Predict 5.7% Price Increase, Web Survey Shows
“The lack of mortgage funding, especially for first-time buyers, remains the single biggest threat to a full housing market recovery.” What about affordability??? Yet again no mention of over inflated house prices. But what should we expect from VI? Whee's the moral compass? Where's the commont sense argument against hig personal debt?
Any views on this?
Motley Fool: Cash Is King
A top fund manager is moving heavily into cash.
Give up on UK now, whats the point?
Dailymail: Petrol prices look set to soar higher as dollar strengthens and oil rises Read more: http://www.dailymail.co.uk/money/article-1263964/Petrol-prices-look-set-soar-higher-dollar-strengthens-oil-rises.html#ixzz0kKyQ60Ed
rivers could be hit with new record petrol prices soon. They already look set to pass the previous high of 119.7p reached in July 2008, when oil was priced at $148 a barrel. Now oil has crept back up to its highest level since October 2008 - albeit still only at $87 a barrel.
Better than a battered mars bar
Yahoo: Greece battered on markets
Market News International quoted unidentified senior Greek government sources as saying Athens wanted to renegotiate the EU aid deal intended to protect Greece from potential default as it struggles to handle a 300 billion euro ($402.3 billion) debt in a crisis that has shaken the euro
"losses have largely come from “reckless” property development lending
Fundstrategy: Irish bank crisis set to worsen when rate rises
Ireland’s crisis-hit banks could face further problems as the European Central Bank (ECB) prepares to raise the rate at which it lends. Ireland’s banks, as well as those in Italy and Greece, are heavily dependent on the ECB’s special lending facility, which makes up about 40-50% of their borrowing. However, Jean-Claude Trichet, the president of the ECB, announced plans earlier this month to raise its 1% lending rate, bringing it closer into line with the market, which would pile further pressure on the banks.
It's pay back time
BBC: Home owners' equity is still increasing
UK homeowners increased the value of their stake in their properties by £22.3bn last year, Bank of England figures show. They reflect continued decisions by homeowners to pay off more of their mortgages, and lenders' insistence that borrowers put down large deposits. The trend towards equity injections started in the second quarter of 2009. In the preceding 10 years, homeowners had borrowed £327bn against the inflated value of their homes.
More pent up supply
Introducer Today: Repossession crisis looms
"Homeowners should heed warning signs of the harsh fiscal environment looming on the horizon post-Election, according to the latest Property Portfolio Rescue (PPR) Distress Index. The firm said the number of distressed home sellers contacting PPR in Q1 2010 is more than double that of the pre-credit crunch years, as squeezed household incomes and the rocketing cost of living is causing households to default on mortgage repayments and credit card debts. Measures outlined in the March Budget, including the first time buyer stamp duty holiday and the small business growth package, have diverted attention from the more severe tax hikes and public spending cuts already in the pipeline, said PPR. The firm said repossessions will remain at record levels throughout 2010, with 50,000 forecast..."
Pent up supply
Introducer Today: Sellers hit 20 month high
"The latest Agency Express Property Activity Index shows that the UK’s house sales were down on February’s levels but the number of properties that were put on the market hit a 20-month high. Nationally, the number of houses sold in March was 13.7 per cent less than in February but was still 5.1 per cent up on March 2009. The number of properties that were put up ‘For Sale’ rose by 5.3 per cent on February to their highest level since July 2008, which is a 38.9 per cent increase year on year."
Whats going on here then?
Commodity Online: Will fraud lift gold prices to $10,000/ounce?
"There is 100-times more paper-gold outstanding than physical gold.".........Any thoughts on this? and yes I know its a bit off topic but its also very relevant. Basically if this article isn't a load of rubbish then there may be trouble ahead.
Everything is fine now the election date has been announced
Yahoo: Construction expands for first time in two years
believe this BS then you should vote for labour.... lol seems funny all the great news and figures coming out just before the election...
With forecasters projecting higher interest rates and the market anxiously awaiting
Money cnn: Bonds in the 'danger zone'
"We're in the danger zone," said Bill Larkin, a portfolio manager at Cabot Money Management in Salem, Mass. "There's likely to be some sort of hit to the bond market."
American Renters Smile
Bloomberg: U.S. Apartment Rents Decline as Vacancies at Record, Reis Says
“Landlords are saying: ‘Even before we talk about the free month off, and even before we talk about the free gym, we want to lower the asking rents to get you through the door,’
...time to join your own dole queue Gordon...(but of cours, the banks will still hire you)
BBC: Gordon Brown calls 6 May general election
"He said he came from an "ordinary" background and would fight hard for families on "modest incomes"..... cough cough how far the apple has fallen from the tree
Will UK rates follow?
Bloomberg: Australia Raises Key Interest Rate to 4.25%
"Australia’s central bank raised its benchmark interest rate to 4.25 percent and signaled further increases".
Slow motion train wreck - sounds delightful - NOT!
Telegraph: UK house prices face prolonged bear market
The housing market may now be trapped in a long-term bear market and may not bounce back to the peaks it reached in 2007 for generations, a leading economic consultancy has warned.
Monday, April 5, 2010
Same old tripe about FTB house affordability, with absolutely no mention of prices being too high!
BBC: The struggle of first-time house buyers
Richard Westcott reports on the obvious - FTB's can't afford a home, and doesn't even mention the fact that house prices are 5x salary. Dooh, wake up and smell the coffee. Prices are too high. People aren't buying because they can't afford the inflated prices.
Hedge Fund manager who made all the right calls
New York Times: I saw the crisis coming, why didn't the Fed?
All the signs were there for this HF manager, who bet against (took CDS positions on) MBSs and the bonds of financial companies which would go belly-up when the crisis hit. Dangers were obvious from way back in the early 2000s. Then he took into account that counterparties to his CDSs could default, so he avoided Bear and Lehman, was suspicious of AIG's AAA-rating, and demanded daily collateral settlement. He liquidated most of his CDS positions in 2007 at a big profit. Then he figured that govt intervention would turn the tide, so he sold the remaining CDSs to Wall St. banks by then desperate to buy insurance against default. Greenspan, who made all the wrong calls, turned round and said the guy was just lucky!!!!! The only policy left after these screw-ups was to screw the taxpayer.
£33 million made available for housing associations to build affordable homes
Halifax Courier: £33m for family homes
Probably a good thing as it creates homes and jobs but £33 million for 240 properties = £137500 per home, sounds as if the council is being ripped off by the builders.
In a club owned by debt-ridden Americans?
Independent: Brown: UK economy like injured Rooney
So the UK economy is like Rooney. It just suffered a bit of ligament damage and will soon be back as good as ever.
Stock market sentiment – overbullish, but not in danger zone
Investment Postcards: Stock market sentiment – overbullish, but not in danger zone
Although investment advisors are overbullish, the level has not yet reached the danger zone. However, given the overbought and overvalued condition of the US stock market, I am holding a defensive stance here.
Savers lose £26bn supporting debt-based monetary system
Guardian: Emergency interest rate cuts 'cost savers £18bn'
Savers lost out on £18bn of returns last year due to the Bank of England's emergency interest rate cuts, analysis by the Office for National Statistics reveals. Borrowers, however, benefited from a £26bn windfall, thanks to rock-bottom base rates of 0.5%.
But i thought people werent falling behind??
Yahoo: The cost of mortgage insurance up 50pc
Mortgage protection insurers said that they have been forced to hike premiums to counter the increase in the number of claims made by home owners that have fallen on hard times. Cardiff Pinnacle, protection provider for the Yorkshire Building Society, said that the increase in premiums is a direct result of the increased numbers in claims. It said that its premiums would rise by an average of £46 per year. A spokesperson said: "We have experienced a 166pc increase in the amount of claims paid from the end of 2008 to the end of 2009.
He NEARLY gets it
Reuters: Investors rethink US/UK safety as debt surges
"After all, if at the extreme, government default became a reality, what hope would there be for the banking system?" said Steven Major, a strategist at HSBC in London.
All is quiet in the print shop tonight..
Yahoo: Deflation on the prowl as Bernanke shuts down his printing press
We were all too close to the tipping point illustrated in Irving Fisher's Debt Deflation Causes of Great Depressions , the moment when the sailing ship catches water and capsizes instead of righting itself by natural rhythm. Work by Berkeley Professor Barry Eichengreen shows that global trade, industrial output, and stock markets all crashed at a faster rate over the six terrifying months after the Lehman crisis than during the early 1930s. How quickly we forget, and how easily we are seduced by a 76pc stock rally into thinking it was a storm in a teacup. Just wait until the day fiscal retribution comes.
Ok where now? borrow more money?
Yahoo: Investors rethink US/UK safety as debt surges
A surge in public borrowing in Britain and the United States has distorted historic market relationships and may have put to rest the long-held notion of risk-free U.S. and U.K. government debt. For the first time on record, investors are demanding higher premiums on U.S. and U.K. government bonds than on debt issued between top-rated banks in the two countries.
"Modern homes provide less living space than the inside of a Ford Galaxy people carrier"
Times: Stamp duty tax break fails to tempt first-time buyers
First-time buyers are not yet benefiting from the Budget stamp duty tax break on homes up to £250,000, although the concession was supposed to ease their path on to the housing ladder before the general election. Jeremy Leaf, of Leaf & Co, a London-based estate agency, said that first-time buyers were not booking viewings because they did not have the 20 per cent deposits required for a competitively priced loan.
The "demand" myth exploded
Guardian: Half a million houses empty
So we need affordable housing? Here it is folks. Now, remind me again, who was that property developer in the news moaning about planning so they could build more little boxes?
Plummeting transactions spun as good news for house prices
Telegraph: Lack of houses for sale triggers mounting demand
Housing transactions over the last two years have struck a record low, building pent-up demand from 1.5m potential buyers that is waiting to explode on to the market, according to new research from Savills. Savills says the buyers who stayed out of the market could drive "several years of relatively high house price growth" if mortgage lending eases and they return. "The extent to which transaction levels have been suppressed, means that significant pent-up demand for home ownership is building."
Sunday, April 4, 2010
It's all coming to a head
The Telegraph: Deflation on the prowl as Bernanke shuts down his printing press
The $1.7 trillion created out of nothing will vanish as the bonds are sold on the open market. Not too quickly, let us hope. Easy money must cushion the blow of spending cuts.
US bonds - the end of a 30-year bull market
Investment Postcards: US bonds - the end of a 30-year bull market
The US jobless report on Friday sparked a jump in Treasury bond yields, sending the yield on 10-year Notes to 3.95% – the highest level since June last year. Rising bond yields have far-reaching implications for many variables, including house prices and the stock market.
The reality of a house price boom.....
Times: The secret cannabis kings next door
After splitting up with the father of her child, she retrained as a primary-school teacher and moved out of the capital. Like many recent graduates, she has “significant” student debts. So, two years ago, she turned, as many of her friends had done before her, to a lucrative hobby. She began growing weed. Hannah generates much less money through cannabis than Alex, but still makes enough to pay her rent and bills.
UK house price is bad? Try China's 25x income
Mish Economic Blog: China 25x house price to income
China seemed to be ahead of UK in nearly everything, including housing bubble which in some place is now at 25x income.
A lesson for the UK?
Figaro: 1500 houses to be destroyed
Firstly, apologies this is in French. However the picture says it all. Nice seaside houses (like Sandbanks maybe) have been flooded by the bad weather and the plan is to knock them all down. Between 1300 and 1500 to be bulldozed. Yet still in the UK we have people begging to relax planning restrictions and build property on the flood plains. I wonder if the local authorities will pick up the tab, as is happening here?
Banks say, just let us do our thang man!
Timesonline: FSA faces opposition to ban on 100% mortgages
The City watchdog has met with opposition to its proposals to ban riskier "100 per cent mortgages" which require borrowers to put down little or none of their own equity, it said today.
Saturday, April 3, 2010
Halligan's hairshirt rant #693
Telegraph: Twelve months ago, credit downgrades and a deeply alarming fiscal deficit prompted bond investors to include Ireland in a group of fiscal stinkers known as the PIGS – standing for Portugal, Ireland, Greece and Spain. A year on, the Republic isn't quite
"British economists of international repute have been writing letters to newspapers arguing that we can avoid addressing the UK's shocking fiscal problems because to do so would be "to accept as binding the view of the same financial markets whose mistakes precipitated this crisis in the first place. This is irresponsible nonsense. Financial markets didn't cause this crisis. What caused it was fraud, dire political leadership and a lack of genuine regulation." Slack jawed at this nonsense in a national newspaper. "Financial markets didn't cause this crisis"????
Can't go wrong with Bricks and Mortar!
Telegraph: Property tycoon Simon Halabi bankrupt
Simon Halabi, the property tycoon who was estimated to be worth £3bn in 2007 and whose portfolio includes London HQs of JP Morgan, Aviva and Old Mutual, has been declared bankrupt. The bankruptcy order was made in the High Court on Tuesday over a £56.3m loan he received from failed Icelandic bank Kaupthing Singer & Friedlander. The financial health of Mr Halabi has so far been difficult to establish because his control of the properties was through a web of off-shore vehicles and family trusts.
Nearly time to show your hand
Mi2g: Derivatives Quadrillion Play: How Far Away Are We From A Second Financial Crisis?
In March 2010, the trans-national play of all types of derivatives is down to USD 1.048 Quadrillion, a decline of -25% worldwide. As a result, the global size of the derivatives bubble which was calculated last year at USD 206k per person-on-planet, has fallen to USD 149k per person-on-planet. In parallel, since peaking in the second quarter of 2007, US household wealth is also down by USD 14 trillion. It makes one wonder, how much of the perceived wealth is real, and how much is illusory? "Walls-of-Money" that are no more than leverage, levitating and underpinned by derivatives-based-instruments manifest as complex securities.
25% mortgage holder in negative equity / how to stop them walking away
Washington Post: New program will help homeowners facing foreclosure with short sales
As foreclosure prevention efforts struggle to make an impact, the Obama administration will launch a program Monday encouraging lenders to allow more distressed homeowners to sell their property for less than they owe on their mortgage.
Happening in the UK as well?
Irish Times: The finance manager who tried to play by the rules
Interesting tale from the Republic of Ireland. Regulators ignore their own rules.
Don't take your eye off the ball
The Business Times: Greek euro problems may spell trouble for ECB
GOVERNMENTS, bankers and the press have concentrated on Greece's difficulties in servicing and repaying its debt, but a much bigger problem looms. The European Central Bank has lent hundreds of billions of euros to stricken commercial banks that are exposed to the imploding bubble economies of the so-called 'PIGS' nations - Portugal, Ireland, Greece and Spain. It is absurd that German Cabinet ministers and central bankers proclaim that there should not be one cent of aid for Greece while they keep mum about the tens of billions in indirect financing that flowed to the eurozone periphery countries through the back door. Via its so-called 'liquidity operations', the ECB has been lending massively to the weakest banks against collateral made up of increasingly dodgy mortgage assets
Boomers getting bashed
Guardian: Property market exposes the priced out generation
Decent article on the theme of the younger generation being shafted by the older boomer crows. Shame it trumpets PricedOut.org.uk, which is pretty much a dead site, rather than HPC.
Friday, April 2, 2010
UK default: better first than last?
The Telegraph: The IMF should impose default on Greece to end the charade
I just had lunch with Carmen Reinhart, author of `This Time is Different: Eight Centuries of Financial Folly” and a world authority on sovereign defaults. Suitably, she was wearing a medallion of a Spanish silver coin dating from 1580, celebrating Philip II’s third default in eighteen years. These magnificent defaults did not stop Spain launching the Armada against Elizabethan England a little later, or attempting to roll back the Protestant Reformation in a last maniacal attempt to impose Habsburg-Papal absolutism on free thinkers, but it did cripple some great European banking dynasties — about 20 in all.
Gain in Payrolls Shows Recovery More Entrenched
Bloomberg: U.S. Economy: Gain in Payrolls Shows Recovery More Entrenched
Forget Lithuania - let's see what's happening in the real world!
On the flip side... another side to a falling pound
BBC News: Fuel thieves target Greater Manchester petrol stations
"Thieves have stolen thousands of pounds worth of fuel from petrol stations in Greater Manchester... Police said the fuel card had been cloned and has been linked to other fuel thefts, worth a total of £2,000." A falling pound does have serious consequences. How much more of this are we going to see after the General Election? How much civil unrest will there be once the music stops and interest rates have to go north? Some tough choices ahead and I wonder just how much the consumer-machine (sheeple) realise this? Oh dear...
By 2013, investment taxes for the wealthiest Americans will rise to roughly 24%
Money cnn: Higher taxes threaten stock rally
But this time around, the psychological impact may play a bigger role. With the U.S. economy still reeling in the aftermath of the worst recession since the 1930s, investors have more reason to show caution in the near term. "You'll probably see more of a sideways pattern in the stock market over the next few years, but it's a little muddy as to how the higher taxes might factor in," said Linda Duessel, equity market strategist at Federated Investors.
Heads they win ...
Guardian: I long for a real Labour voice to slam this City-fearing trio
Hard-hitting article on the intellectual bankruptcy of our political parties. A bit harsh on Vince Cable perhaps but sound on the rest of them.
Could this be Britain after the election?
New York Times: From Lithuania, a View of Austerity’s Costs
If leaders of the world’s many indebted countries want to see what austerity looks like, they might want to visit this Baltic nation of 3.3 million. Faced with rising deficits that threatened to bankrupt the country, Lithuania cut public spending by 30% — including slashing public sector wages 20 to 30% and reducing pensions by as much as 11%. And the government didn’t stop there. It raised taxes on a wide variety of goods, like pharmaceutical products and alcohol. Corporate taxes rose to 20%, from 15%. VAT rose to 21%. The net effect on this country’s finances was a savings equal to 9% of GDP. But austerity has exacted its own price, in social and personal pain. Pensioners, their benefits cut, swamped soup kitchens. Unemployment jumped to a high of 14%.
Usual Times property spin
The Times: The mood is still fragile but confidence is building
but what interested me was the commentary about high speed rail. These kind of articles always talk about convenience of commuting but never price. The fact is, an annual season ticket to London from say, Norwich is £6,212 so anything you save from a mortgage by buying a less expensive house is lost on the cost of the commute. The future is perhaps home-working which I already do quite regularly (even though I live only a couple of miles from my office) although this is not practical for many workers.
"Public pay restraint, especially for the top earners"
Independent: More council fat cats than two years ago
My title is taken from what the "Three Chancellors" promised the other night. But the pay restraint is concentrated in the low pay levels. Do councils have to mirror the private economy, where globalisation increases income inequalities, because "we're competing with the private sector for the best people". I don't think so, and neither does Sean O'Grady (see his piece in the 'Related articles' link.)
Thursday, April 1, 2010
This might get the boomer bashers going
Express: FALLING POUND PUSHES EXPATS INTO DEBT CRISIS
Although I am a boomer myself and will stand up and fight against what I see as unfair attacks on my generation, I've got to say that some of these people probably do deserve criticism.
The global recovery goes through a patch of turbulence
The Telegraph: China's credit curbs pose mounting risk to commodities
The big global banks are quietly preparing for a slide in commodity prices over coming months as China clamps down on excess lending and the US Federal Reserve takes away the liquidity pot.
Daddy bear has your dinner
Telegraph: House prices to end 2010 lower
Capital Economics' Ed Stansfield tells Robert Miller that houses are still over-valued and prices will fall further in 2010. "More over-valued now than at the peak of the 1980's boom" Yummy yummy bear food.
Its the snow wot dunnit!
Bloomberg: U.K. Mortgage Demand May Increase in Second Quarter, BOE Says
"U.K. banks expect demand for mortgages to increase in the second quarter as the end of the longest cold snap in 30 years renews interest in the housing market, the Bank of England said".
Does the government really want houses built?
Northampton Chronicle and Echo: Government blocks plans for 9,000 homes on the edge of Northampton
"Housing developers have been dealt a major blow after plans to build more than 9,000 new homes on land between Daventry and Northampton were blocked by the Government." Does the government really want to provide houses or are the trying to keep supply low and prices high?
I don't believe this
Reuters: Manufacturing PMI hits 15-year high
I'm not sure how the PMI can be rigged to suit government propaganda but I don't see manufacturing output improving. Perhaps there's an increase in the number of Purchasing Managers accepting "bungs" from suppliers, who are struggling themselves, to buy stock that's not really needed.
The sale of Britain's gold
Yahoo / Telegraph: Gordon Brown accused of 'cover-up' over sale of Britain's gold
An email released under freedom of information laws shows that in December 1998 senior officials at the Bank refused to back a Treasury move to sell almost 400 million tons of gold. Hundreds of pages of documents thought to detail the Bank's concerns and advice to the chancellor have been withheld by the Treasury. Gordon Brown was chancellor at the time. The decision to sell the gold has since been described as one of the worst ever taken by the Treasury, costing the country about £7 billion due to a sharp rise in the price of bullion. The Treasury has declassified only limited information on the sale and refused to release most of the key documents. Some pages have been heavily censored.
Will UK borrowers need to pay more ?
Reuters: PIMCO sees UK downgrade
"Scott Mather, head of global portfolio management at Pacific Investment Management Co (PIMCO), told a briefing in Taipei on Thursday that the company was underweighting UK, U.S. and pan-European 10-year sovereign bonds. Last month, PIMCO said it was maintaining its negative stance on British gilts because the amount of debt the country would have to issue in the future should lead to inflation and a depreciating currency".
Can you buy? Yes. Would you buy? Probably not.
Monevator: What can a first-time buyer in the South East buy for less than £250,000?
Amusing article which tries to put a brave face on the prospect of escaping stamp duty by paying a quarter of a million quid for a rabbit hutch in Uxbridge.