Friday, August 10, 2007

Black Friday?

ECB injects a further €61bn into markets

It would appear the the further €61bn pumped into the markets is having little impact. The FTSE is doing an apt impersonation of a lead balloon, down 3% as of midday today and currently still dropping.

Posted by denzil @ 11:54 AM (1777 views)
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15 thoughts on “Black Friday?

  • The general talk has been that the ECB would raise rates in September, and now they are pumping out more money?

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  • Here we go!!!!

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  • OH FOR GOODNESS SAKE!!!!!

    Just turn off the HPI machine let the markets bottom house prices and asset prices out and get back to normal.

    Can’t we just write off the debt?

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  • The ECB (and the Fed) are desperately flooding the market with more funny money(again), while claiming that inflation is their major concern????????

    Oh what a tangled web we weave.

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  • Maybe these cash injections are doing just the opposite, and making the markets panic. Have the central banks learnt nothing from the UKs expeience during Black Wednesday. Surely this money will only goto waste. Think of the number of hospitals that could be built with £90 billion pounds. Shows that the banks are in panic mode.

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  • japanese uncle says:

    It’s obvious that the Bank is showing official gesture, to convince the majority of the public (excluding devil’s advocates.) that they are doing their best bona fide. It may well fail, but ‘imconpetence defence’ is always available, in which case they will be let off the hook just by being whipped (or whisked) on the back of their hands.

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  • Stock markets are crashing all over the world. The good times are over, no matter how much money central banks throw at the situation.

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  • How long is it before they wheel out Evan Davis on the BBC with his patronizing tone telling everybody “there there children go back to sleep nothing to worry about”

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  • To be fair to Evan Davies his blog is far more pragmatic and realistic. He has pointed out that we have experienced a credit boom, and that a bust will surely follow.

    David Smith from the Times is OTOH, a muppet.

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  • Funny how the UK as not been hit yet. I would have thought the UK would be far more prone than the rest of Europe.

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  • Problem is that when people can’t rely on the share market they look for other places to put their money. BTL’ers will be saying “Thank god I didnt put my money in the stock market. ” This is very much what happened after the stock market crash in 1987 investors piled into commercial property mind you a couple of years later that bombed too.

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  • You are suggesting the house prices will double in near future?

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  • I think it’s fair to say that putting money into anything is easy. The trick is getting it out at the right time. BTL’ers may be counting their blessings this week but if they don’t have the courage to liquidate their portfolios when the alarm bells are all ringing very very loudly (i.e. right about now) they could well be (and probably will be) wiped out next.

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  • From AOL news “Other FTSE 250 stocks caught by the market sell-off included Rightmove, which fell 9% or 49p to 513.5p”

    Nice one!

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  • Let me say upfront that I hope there is a HPC (I need one in order to buy) but I have been renting in Horsham for a year now and similar properties in our road (2,3 or 4 bed Victorian semi-detached cottages) are still selling fast (i.e. within 1 week). 2 bed went for 300k, 3 bed went for 330k and 4 bed went for 360k within last month. Another 4 bed on market today at 375k. These are not large houses, difference between 2 and 4 bedrooms is just a loft conversion (~30k to do). Last year, April 2006, a 4 bed went for 300k, so essentailly there has been 20-25% HPI in 12 months. Personaly, I think it is still screaming ahead because IR’s are far too low (should be 8-10%) and real inflation is closer to 6-8%, not 3% as BoE says using CPI, so in effect, it is still comparatively cheap to lend. Also agents are suggesting that alot of people are moving out of London (especially SW like Putney) to Horsham. Presumably, they were in flats and their money is insufficient to buy a house in Putney but can buy a small house in Horsham. Also bear in mind that these houses in Horsham are bottom end in terms of price, so at the moment, with a 6 figure deposit and a 50k salary, I would still need a 200-250k mortgage to buy one. I need a 20-30% correction just to bring them back to where they were 12-18 months ago! Is that likely? I have come to the conclusion that either (1) My salary is at the bottom end of the scale, everyone is earning £100k and my deposit is a trifling amount or (2) The world, his wife and dog are lending astronomical multiples just to get into the housing market. For my sanity, I hope it is point (2). Either way, it is not going to slow in Horsham overnight and I will be very concerned if it hasn’t settled down by Xmas when hopefully IR will be 6%. Hope I haven’t depressed you all and have a good weekend.

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