Sunday, March 11, 2007

Unusually bearish for a corporate rag

Crisis Looms in Market for Mortgages

Strange- the NY Times can usually find some upbeat lies to maintain the delusion- here, they seem rather worried

Posted by inflation is eating my savings @ 08:40 PM (759 views)
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13 thoughts on “Unusually bearish for a corporate rag

  • “Meanwhile, investors wait to see whether the spring home selling season will shore up the mortgage market. If home prices do not appreciate or if they fall, defaults will rise, and pension funds and others that embraced the mortgage securities market will have to record losses. And they will likely retreat from the market, analysts said, affecting consumers and the overall economy.”
    Let the carnage begin!

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  • Yes, I saw this report. There was hope that the mortgage crisis would be limited to the subprime sector; however, it now appears that prime borrowers are beginning defaulting. Oops. Given the turmoil that is unfolding in the states there is not a cat’s chance in hell of us not suffering in the UK.

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  • Not so sure myself harold. I still cannot see the link between US and UK housing markets in respect of HPC. The US have had a dozen IR rises over the last couple of years and although still low by UK standards is relatively high for the US consumer when compared to the earlier base rate. In the UK we are still comfortable with the rip off britain IR for the moment. We will have to wait and see.

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  • Wannabeemigre says:

    Yes but their houseprices are lower than ours and their disposable incomes greater-they may have had IR rises but they should have been able to cope, UK borrowers are already stretched and interest rates havent even started to rise back towards normal rates and when the B o J raises its rates against the wishes of the US/UK et al, that is when the shit really hits the fan, the Japanese are in a win/win situation as regards to rate movements drop them and you stoke further fires raise them and increase the value of the yen and get paid back more:-) The countries that manufacture are the ones that ultimately control the destiny of the western markets so i guess that learning japanese or mandarin would be a good idea because they now own our arses!!!!

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  • I agree with Harold. There are as many differences between the US and the UK as there are similarities. The US market is no longer booming, and some believe is on the verge of a major crash. The UK market is still growing at a pace against the prospect of one or two more quarter-point interest rate rises. This does not give me reason to even dare hope for a House Price Crash in the UK. And what is a crash? Houses might drop from being grossly, wholly and totally unaffordable to being merely totally unaffordable. Still won’t help!

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  • tyrellcorporation says:

    We’re still waiting for that change in sentiment in the British house buying public. Kirsy & Phil, et al, have kept the bubble going for way too long. even when the market spluttered in the summer of 2004, the TV channels just started showing repeats of earlier episodes when people were still selling houses at record profits.

    When cheap credit starts to evapourate (as it now is) not even this delerious VI waffle will keep the ship afloat.

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  • Surely the 5 x salary mortgages, the 100% mortgages over here are exactly the same.

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  • japanese uncle says:

    If anyone come across any question as respects Japanese language, I am more than happy to help. Learning Chinese may not be a good idea as it is nearly impossible to master all of their provincial dialects, which as experts say, are almost independent languages on their own. Thus learning Mandarine would not help in dealing with Kantonese businessmen, for instance. Having said that Japanese economy is probably over the hill sadly, while China and India will surely be dominating the world economy for the rest of this century.

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  • Well JU. I have certain issues with the Natsume Soseki’s 夢十夜 – why use 逢いに来る instead of 合いに来る etc. and why use 云う instead of 言う, but it’s hardly to do with the impending HPC.

    Having said that, I’m brushing up on my language skills to facilitate a move to Japan if all this HPI madness continues for another year or two!

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  • financial planner says:

    Really scary and great report by the voice of wall st. “Decreased funding for residential mortgage-backed securities could set off a downward spiral in credit availability that can deprive individuals of home ownership and substantially hurt the U.S. economy.” Oh, dear. We hadn’t considered that possibility – however extreme!!! The UK is full of BTLers with liar rental yields shown to lenders. When a) the lenders realise the yields are lies they will stop lending and b) when the BTLers see HPI stopping they will stop buying. Then c) when HP falls begin just watch the supply multiply as BTLers fall over themselves to put properties on the market. Supply and Demand…

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  • japanese uncle says:

    夢十夜 is certainly one of my favorite short stories. 「逢う」 「遭う」 「合う」 「会う」 「遇う」 are all pronouced like ‘au’ and mean a situation in which two things or people come into contact. But 「逢う」 implies tryst while 「会う」 refers to meeting of two or more people in general for whatever purpose including business. Incidentally 「合う」 does not refer to people but things coming into contact. Furthermore,「遭う」and「遇う」can be understood to mean ‘encounter’ rather than ‘meet’, such as an encountering with a misfortune.

    And 漱石 was probably the greatest writer that Japan has ever produced. But if you have time, I suggest you can try ‘Botchan’(「坊ちゃん」) and ‘I am a cat’ (「我が輩は猫である」), which are enormously funny and profound (the latter in particular), in case you have not read them.

    To my knowledge, you are the only Briton who read 夢十夜, which is impressive. Have you stayed in Japan?

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  • financial planner

    Good point but does anyone know how many BTL-ers are sailing close to the wind? Those who started in the late 1990s are probably laughing whereas those who started in 2004 are probably more worried. While I think your concept is right, it is only more right for the latter group and not really right at all for the former group. Until it is known how many BTL-ers are close to the wind, your idea may not affect market value (although I wish you are right).

    Paul, JU
    How on earth do you get those symbols into the text? Do you need to install a special Microsoft character set? (The computer-support chap who looks after my department claims he doesn’t know. He’s off to ring the next level of support which is, surprise surprise, in India).

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  • financial planner says:

    We have some evidence it’s a high proportion. Remember all the remortgages to buy yet more properties Also, literally hundreds of thousands of BTLers took out a mortgage (or remortgage) in last couple of years.

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