Risk

Returning to HPC through frustration (been a long time!) - anyone agree that ESPC is a complete joke?

it was probably an "off the wall" bid anyway

Bids will be submitted by the participants, have a look at the timetable below this sets out what will happen 9:45 a.m.-10 a.m. Auction participants will submit bids and offers for the debt backing the credit default swaps, which will be used to determine the initial recovery rate of the swaps. 10:30 a.m. Auction administrators Creditex and Markit will publish the initial recovery price and the open interest for the contracts will be published. The open interest reflects the amount of bids and offers that have been made, and will show if there are more buyers than sellers, or vice versa. 12:45 p.m. -1 p.m. Participating dealers will submit limit orders for the debt on behalf of themselves and their clients to fill the open interest 2 p.m. The final price of the auction will be published. (Reporting by Karen Brettell; Editing by Chizu Nomiyama)

A number of the main players have signed up to accept the 2pm (US time) auction result. What does this mean? The auction will set the settlement price for these CDS contrats. By way of a simple example: I'm an investor who holds 10m of Lehman debt (bonds), I don't like my exsposure so I buy a 10m CDS contract. As a result I have a net zero position in Lehman. On default I give my 10m Lehman bonds (worth less than 10m) to the insurer in return for 10m cash. However the majority of these contracts are cash settled, therefore rather than return bonds the insurer will pay the difference between the auction price and 100. ie 100 - 9.75

I didn't mean for this to sound like I have a chip on my shoulder however I think it highlights the fact we're firmly in the denial stage of the cycle. People still expect to make 10% - 20% on 2007 prices. I'm sure many have spent cash on their property however they need to get into the real world.

I have zero respect, this was purchased in March 2007 for £214,500......

mortgage approvals have historically been a good lead indicator on the state of the hosuing market..... we all know how they are doing

What planet are you from?

Muswell, Love the research, keep up the good work! Taking into account the rent on a standard two bedroom, I suppose around 175K / 180K would be fair value? What u think?

Yolande Barnes (Head of research @ Savills) should be sacked for stating "It's not about affordability"

You make a very interesting point and I think this is the paradigm shift the market is experiencing.

Great spot and interesting post..... have a look at 17 Arden street if 55 can't sell what chance has 17 got?

in a rising market none of these issues matter

Hi roblpm, Notice you have an interest in the Ediburgh market and know this sub forum well. Has anyone picked up on the change to the ESPC publication? More specifically the chance to the front page were they no longer publish the number sold / new to the market? Interested to know if there is a thread on it... Cheers, Risk

no such thing as BMV - the price PAID is the market

seek profressional advice is my response

form the first article "struggling auctioneers are urging sellers to drop their reserve prices and some investors are quietly snapping up deals for up to 40 per cent below market value. " when will people get into their head that this is not 40% below market value ....... this is the NEW MARKET VALUE

it would appear to me the auction house is taking bids of the wall as so many get close to reserve price but dont sell...... people are still over paying for these properties because of it. Didn't watch this one but they can be very good at it and gives the impression of activity.

"most of his eggs".... owning a chain of Tile shops it not much of a hedge against a housing down turm

can we please get over this supply issue? We have had one of the biggest property booms history over the last 10 years and we have the lowest owner occupier rates for 10 years. This means we have a lot of weak longs in the market which will simply add to the problem

Exactly! Used in the offers over system in Scotland, whereby you attach a low offers over price to drum up interest.

Great Work! Many thanks M21er ..... It would appear the only Vendors willing to accept a loss at the moment is the Mortgagee.

your work has been excellent, truely is an indication on the market from the coal face. keep it up! Risk

Hi Emily, Many thanks for the reply. Some of the other replies have mentioned the positive aspects of house price falls, however I suspect that the media will not be interested in these as they don't sell. What does sell is horror stories of people in financial ruin, and the public will not be able to get enough. Leading to further demand.......You can see it on this site, how excited people get about negitive stories - all part of the cycle I suppose. Let us know how you get on.

Hi Emily, Many thanks for the reply. Some of the other replies have mentioned the positive aspects of house price falls, however I suspect that the media will not be interested in these as they don't sell. What does sell is horror stories of people in financial ruin, and the public will not be able to get enough. Leading to further demand.......You can see it on this site, how excited people get about negitive stories - all part of the cycle I suppose. Let us know how you get on.