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Everything posted by DrBob

  1. Just be a bit careful & do your research. e.g. The following brands are all part of HBOS, so don't put your money into two of these if you want to spread risk: - Halifax - Bank of Scotland - Intelligent Finance - Birmingham Midshires - Sainsbury's Bank
  2. I think you've hit the nail on the head here. The BoE will know that if they even give a hint that they will lower IRs, Sterling will collapse (and inflation will take off). They really are between a rock and a hard place. I suspect rates will stay where they are for a couple more months, then rise to 6% as soon as there's a lull in the credit storm. There certainly won't be any quick easing of policy...
  3. Great! A whole new acronym and opaque financial product to try and digest. Still, this explains why 49 banks took up the ECB offer of credit last week, rather than just the handful who had admitted to losing money. This must also be what someone meant when they said that money 'flows' through the financial system - arbitrage on a massive scale...
  4. Sold up about three weeks ago, eh? Are you sure he didn't sell them to pay for flood repairs to his home? Tycoon's home flooded 6:22pm Sunday 22nd July 2007 http://www.thisisoxfordshire.co.uk/display...ome_flooded.php http://www.thisisoxfordshire.co.uk/display.var.1563715.0.tycoons_home_flooded.php' rel="external nofollow">Even multi-millionaires didn't escape the floods as Sir Richard Branson's house was submerged in Kidlington. The Virgin boss was one of an unlucky few whose houses in Mill End were not protected by the flood defences alongside the River Cherwell. Village county councillor Maurice Billington said: "Richard Branson has been flooded. I think it's about a foot of water.
  5. Saturday's Telegraph beautifully illustrates the credit crunch: For "asset prices" read "house prices"! See their article at: http://www.telegraph.co.uk/money/main.jhtm...11/cnfsa111.xml
  6. Some more credit crunch news for believers: Esporta faces bankruptcy if bank talks fail Last Updated: 11:59pm BST 04/08/2007 http://www.telegraph.co.uk/money/main.jhtm...nesporta105.xml http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/08/05/cnesporta105.xml' rel="external nofollow">Halabi acquired the upmarket chain last November for about £480m but SocGen is understood to have had difficulty in syndicating an estimated £330m of debt funding. The situation has been exacerbated by the turmoil in the credit markets as banks have shied away from agreeing loans to private equity firms, which traditionally take on lots of debt to help fund takeover deals. On Friday, the turmoil claimed its latest victim when banks trying to finance the takeover of Alliance Boots were forced to shelve the sale of £1bn of second-lien debt after failing to attract buyers. The banks had already conceded the main £5bn tranche of debt on the deal - which is viewed as a bellwether of European sentiment - would not sell. Boots said the delay in placing the debt would have no impact on its £11bn takeover by private equity group Kohlberg Kravis Roberts. Other high-profile deals have already been delayed. The board of Cadbury Schweppes will decide "within weeks" whether to pursue a sale or demerger of its US beverages operation, which has been valued at about £7bn The company, which last week said it would temporarily halt an auction being run by Morgan Stanley and UBS because of the precarious state of the leveraged debt markets, is understood to have told prospective bidders that it will not wait indefinitely for financing conditions to stabilise. The auction of Virgin Media is also believed to be facing delays. Esporta could become the next victim of the market -turmoil. The company, which is one of Britain's largest fitness chains, is already in breach of its banking covenants and cannot afford to wait for a cash injection. The chain has struggled with poor trading since Halabi bought it from private equity firm Duke Street Capital last year, although the turbulence in the debt markets has made the situation more difficult. Halabi is understood to have tried, but failed, to refinance Esporta. He held talks with JP Morgan about a new borrowing deal last month, but could not strike a deal. In an era of shrinking disposable incomes, gyms might not do very well...
  7. So just what do you suggest a property bear does with his/her savings? Short of stockpiling heating oil, cans of baked beans or physical gold (all of which are difficult when you live in a small and less-than-100%-secure 1-bedroom flat) there's no option but to keep your money with the banks. I take some comfort in the FSCS guarantee, and try to stick to AA-rated institutions...
  8. UK banks could absorb a £25bn loss without collapsing. The annual profit of HSBC alone is about £14bn. But I still can't get over the sheer lunacy of people getting into £25k or £30k credit card debt! Large student loans (eg for medical students) or loans of up to £5k (for a necessary car etc) I can understand, but £25k on credit cards is sheer madness on the part of both borrowers and lenders.
  9. Here is a satellite shot from Google maps. The top right marker is the Pirbright Laboratory, which is actively engaged in foot and mouth research activities. The bottom left marker is Westwood Lane in Normandy, the centre of Friday's foot and mouth outbreak. Does anyone think there could be a relation??
  10. Wait until this scandal hits the press: The current foot and mouth outbreak (in Wanborough, Surrey) is only 3 miles from the Institute of Animal Health's Pirbright Laboratory, which is actively involved in Foot & Mouth research (with live virus).
  11. And of course your friend should put the maximum allowable into the NS&I Index Linked Savings Certificates, since these are tax free so even though the headline interest rates are lower, they provide a much better return than any bank/building society account.
  12. Farm infected with foot-and-mouth http://news.bbc.co.uk/2/hi/uk_news/england/6930684.stm http://news.bbc.co.uk/2/hi/uk_news/england/6930684.stm' rel="external nofollow">Last Updated: Saturday, 4 August 2007, 00:56 GMT 01:56 UK Cattle at a farm in Surrey have been found to be infected with foot-and-mouth disease. Some 60 animals on the farm near Guildford have tested positive for the disease which wreaked havoc in 2001. A 3km protection zone has been put in place around the premises and a UK ban imposed on movement of all livestock. The outbreak in 2001 led to between 6.5 million and 10 million animals being destroyed and cost as much as £8.5bn. Many farms and other rural businesses were ruined. National Farmers' Union President Peter Kendall said of the latest incident: "This is a matter of grave concern. We have an industry still depressed from low prices. We have to ensure this is a small isolated incident. We are working with the government to ensure the right steps are taken." Yes, it definitely is a Black Saturday.
  13. Irrespective of stock market activity, it will be a hold. There cannot be a cut whilst inflation is above target. There will not be a rise because they don't like back-to-back rises and they will want to wait for the BoE inflation report (due out later this month).
  14. I've said this before, and I'll say it again. The remarkable thing about the 'record' oil prices (or 'near-record' if you strip out the effect of dollar weakening) is that this is occuring in the absence of any major supply shock! There is no hurricaine, no cyclone, no war in Iran, no civil uprising in Saudi Arabia, no mass unrest in Nigeria. The only way for oil prices now is up (unless bird flu hits, in which case they'll plummet for a year or so).
  15. I absolutely agree. The 0.25% changes might have made sense when IRs were 3-4%, but surely they need to be a bit more bold now! There seems to be an aversion to anything which might unsettle home-owners' fragile souls. Amazingly, with inflation running amok, the New Zealand central bank took the bold(!) step of raising interest rates from 8.00 to 8.25%! Pathetic!
  16. Agreed! The BoE should make their rate decisions on inflation expectations, and should be independent of political / media / financial market pressures. They can take things like house prices / market conditions into account, but only insofar as they might influence future inflation. Having said all that, I still think they'll hold rates this time, because they'll want to wait for their next inflation report (due 8th August 2007). PS: I made another bad Betfair bet a few weeks back, putting £40 on an IR rise at the August MPC at odds of approx 8.0. Odds are now 22 and I think there's zero chance of a rise this time. Whoops! PPS: I still reckon 6.25% is on the cards by Christmas, though...
  17. See you there! I'll be in Wellington (earthquakes notwithstanding). Meanwhile, here's a beautiful illustration of the current state of the NZ (and UK) housing markets. (Analogy credited to National Bank of New Zealand)
  18. Did someone get paid to write that article? It sounds like a financial advisor's drunken rant! Do you think the author took a dictaphone to the pub and recorded his ramblings after his 8th Guinness?
  19. Great find - thanks! Moving to NZ in December, so I'll show this to the lady to support my 'there's no way I'm buying there for a few years yet' stance! I'm intruiged at the jokey tone of this official bank publication. I particularly like the way that the outlook for NZ house prices is summarised as: "Anyone for a game of Jenga™?"
  20. Agreed! It's not a one-way bet. Remember that a crafty political nudge could send house prices back up again (e.g. MIRAS reintroduction, stamp duty reform). Spread betting sounds like a fast way to lose a lot of money (unless you have inside knowledge).
  21. Agreed - the way to ensure customers get the worst deal is to privatise an industry where the customer doesn't have a real choice of provider. Then you couple shareholders' interest (i.e. profit, profit, profit) with a monopoly. Water, rail and PFI deals spring to mind. It's nothing short of scandalous.
  22. Interesting idea! A few questions: 1. What are the criteria for joining the Euro, and do we meet them? 2. Would big business let us join the Euro at the current exchange rate (which would lock us into an uncompetitive export position)? 3. What happens if you have a long-term fixed mortgage rate and your govt joins the Euro?
  23. I don't think many of us are wishing for financial meltdown (are we?) A correction (and that means nominal falls) in house prices would do... This credit crunch will surely just lead to an unwinding of some over-exuberant valuations (stock market and asset) of the last couple of years. I think our financial system will remain intact, as it did in the dotcom crash. Remember, China and Japan still have billions (trillions?) of dollars in savings, which China at least will be keen to invest at the right price...
  24. Yes, of course he was. He's the one on the far right, next to Captain Manwaring.
  25. Icesave seem pretty well protected, by both the FSA and by an Icelandic scheme: http://www.icesave.co.uk/financial-protection.html Their Moody's credit rating is Aa3, which isn't too bad: http://www.landsbanki.is/english/investorr...s/creditratings Perhaps they can offer such high rates by lending to Icelandic mortgage holders at 15% and borrowing from UK savers at 6.5%? Sounds legit to me!
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