August 2007 Archive

Thursday, August 30, 2007

Sssshh Its supposed to be a secret

Financial Times: Bank warns emergency borrowers

Naughty, naughty, the Bank of England reminds financial institutions authorised to use its emergency lending facility that they are not supposed to discuss it publicly.

Posted by enuii @ 09:20 PM 13 Comments

Everyone was Right It Was Barclays

Times: Barclays forced to arrange 1.6bn BoE emergency loan

Apparently 'Barclays said that a technical glitch with the market settlement system forced it to turn to the central bank for funds'.

Posted by enuii @ 09:16 PM 9 Comments

Mortgage revelations continue Freddie Mac profits plunge

Freddie Mac, the US home mortgage lender, on Thursday reported a 45 per cent plunge in second-quarter profits as it was hit by a $320m loss on new mortgages.

Posted by dohousescrashinthewoods @ 07:39 PM 1 Comments

But the article talks mostly of stability Outlook uncertain for housing

The British housing market has not yet shown any of the fragility of the US market. In a report on Thursday, David Miles of Morgan Stanley argued that the risk of falling prices in the UK was material but the market knock-on effects would be much lower as European lenders have not engaged in subprime loans on anything like the US scale.

Posted by dohousescrashinthewoods @ 07:38 PM 3 Comments

Will interest rates be cut by FED?

BBC: US economy receives growth boost

Can FED cut interest rates on much anticipated 18 Sep meeting. I don't think so if economy is growing above normal drop in interest rate will lead to fall in dollar and also stagflation.

Posted by deepak @ 07:34 PM 0 Comments

Why bother when you're in it for capital growth

Firstrung: Buy to let landlords fail to register with tenancy deposit scheme

The National Landlords Association reports that the majority of landlords have yet to register with a government-approved tenancy deposit scheme...Whist it is estimated that around 150,000 landlords have made the move to register with a scheme, it is clear that a large majority have yet to do so. Given the new legislation has been in place for almost five months, the number of landlords who have yet to register with a scheme could be a cause for concern. While landlords with tenancies that started before the scheme was launched on 6 April do not need to protect deposits until a new tenancy is created, there may be other, more worrying, reasons for the relatively slow take-up.

Posted by converted lurker @ 06:53 PM 7 Comments

The party is over

Firstrung: High Street Home Loans has increased its fixed rates by one per cent

Committed to the sub-prime market, the specialist lender held its rates for as long as possible, but with credit markets tightening, it has ultimately had to revise its product range. High Street Home Loans has, however, promised to honour the 250 million of existing pipeline business with its intermediary partners...

Posted by converted lurker @ 06:51 PM 0 Comments

It won't be pretty folks

The Kingsland Report: Home Price Decline to Accelerate - Count On It

It won't be pretty folks. If Goldman and Shilling are right, and historically housing bubbles have always deflated back to about where they started, consumer spending will die out and we'll see a recession by early next year.

Posted by yes @ 05:35 PM 0 Comments

Rose-tinted glasses of an ex-MPC member.

Telegraph Online: Business profile: MPC 'institutionally on the side of higher rates'

Stephen Nickell isn't a noshbag and, since departing the MPC, has been running the National Housing and Planning Advice Unit for Groondon Broone. Basing his theory on supply and demand, houses prices will eventually reach 10x average salary and there won't be a recession. Rather scary for a bloke who used to sit on the MPC. Provided as the alternative view.

Posted by talking rot @ 05:09 PM 7 Comments

Balance sheets are not in good shape Balance sheets are not in good shape

Just like the glib comments people make about the actual UK economy itself. On the surface all looks good. However, off-balance sheet .....

Posted by whiteknight @ 04:57 PM 0 Comments

No easy credit no houseprice boom Britain's Housing Lenders Tighten Subprime Credit

U.K. lenders responsible for 12 percent of the nation's mortgages are tightening standards for loans on house purchases.

Posted by thunder9912 @ 01:31 PM 0 Comments

Bankers have been playing an elaborate game of pass-the-parcel and the music has finally stopped

TimesOnline: Disasters, not Masters, of the Universe

This is an extremely insightful "tell it how it looks" which suggests sub-prime and associated credit crunch has been caused by a kind of blinkered pass-the-parcel game where debts have been sold, repacked, sold .... Those holding the parcel at its different stages in life all thought they were smart enough to predict when the music would stop. Worth a read this one and appears to be very much inline with what many outside of the finance industry view as farce.

Posted by denzil @ 01:20 PM 10 Comments

House Prices Fall By 65 Per Day

The Birmingham Post: Average house price falls

More than 2,000 was knocked off the price of an average house in the Midlands last month amid growing signs of a property slowdown. The value of the average property fell from 153,036 in June to 150,915 in July according to figures released by the Land Registry yesterday. The region was one of only three areas which experienced a downturn last month and contributed to the lowest national increase for more than a year.

Posted by cash_buyer @ 01:08 PM 0 Comments

No more cheap money to sustain the housing boom

MoneyWeek: Is UK housing set to follow the US into a slump?

House price rises in the UK appear to be finally slowing down. And with the cheap credit fountain that has sustained the housing boom shut down for the foreseeable future, the market looks set to weaken further.

Posted by mary @ 12:14 PM 6 Comments

Continuing cracks in the system? Sterling falls on BoE emergency lending

Sterling lost ground on Thursday after the Bank of England revealed it had lent 1.6bn through its standing facility to an unnamed borrower, sparking renewed fears over liquidity in the wake of the recent turmoil on credit markets.

Posted by whiteknight @ 11:59 AM 4 Comments

Winter of discontent on the horizon?

BBC News: Brown's prisons pay deal warning

Gordon Brown has warned prison officers that delaying part of this year's public sector pay rise was "an essential part" of tackling inflation.

Posted by thunder9912 @ 11:05 AM 0 Comments

BBC reports some bearish news.

BBC News: 'Clear signs' of housing slowdown

There are now "clearer signs" that demand in the housing market has slowed, according to the latest property survey from the Nationwide. Average UK house prices rose 0.6% in August from July, just above market expectations of a 0.5% gain, it found. But taken on an annual basis, the Nationwide said house price inflation fell to 9.6% from 9.9% in July, the slowest annual rate since March. The Nationwide added that it still expected house price growth for 2007 as a whole to slow to between 5% and 8%. Earlier this month, the Halifax also said that the housing market appeared to be slowing, as did the Land Registry on Wednesday.

Posted by little professor @ 09:33 AM 35 Comments

Loads A Money Lifts Market!

New York Times: Stocks Rally as Investors Chase Deals

Well it has worked so far......... and the soothing words that he will do all necessary to limit damage. Yet then the other post that seems to tell a different story. It seems that stocks will now rise again as markets are soothed by the kind words and money of the Fed.

Posted by waitingfor hpc @ 08:41 AM 2 Comments

Mmm... Now Looking For Credibility

New York Times: Fed Not Rushing to Bail Out Investors With Rate Cut: Report

So we have poured money in the system - which is now bouncing the market back at an alarming rate and he wants to show that he will not save asset prices???? Is this for real.

Posted by waitingfor hpc @ 08:35 AM 0 Comments

New builds not as brilliant as the sales pitch makes out

Guardian: Call to protect new homebuyers

People have more rights when they buy a kettle than a new home. Many homebuyers receive poor after-sales care and the average new home has 100 problems which need fixing. No surprise then that around 29% of new-build property developments are now deemed to be of poor quality and only a quarter of buyers would recommend their house builder to a friend.

Posted by su @ 08:24 AM 16 Comments

Housing Supply Do we need more houses?

Certainly a lot of astute sense set out in this article, both anti-myths and pro-facts.

Posted by paranoia blue @ 08:00 AM 1 Comments

Australian, N.Z. Dollars Fall; Bankrupt Fund Deters Carry Trade Despite its small population, Australia is regarded as the hedge fund capital of Asia. ... high-risk investment,

The two favorites for the so-called carry trade have suffered the biggest loss of the 16 most-active currencies in the past month as the U.S. housing crisis sent equity markets lower and eroded demand for riskier investments. Basis Capital Fund Management Ltd. reignited credit concerns after it sought to liquidate the assets of its Basis Yield Alpha Fund. `Another hedge fund causes a sell-off in Aussie and kiwi,'' said Charles Wiggins, senior dealer at Custom House Global Foreign Exchange in Sydney, referring to the currencies by their nicknames. ``These funds are coming out of the woodwork and you have so many of them, no one is really sure how much exposure to the subprime market is out there.''

Posted by chris @ 02:17 AM 0 Comments

Out-of-pocket living costs for Australia's 4.5 million working households rose by 3.1 per cent over the past year, well above the broader consumer price index which rose just 2.1 per cent. Rate rise eats into family budgets

"This data is yet more evidence that Mr Howard has fallen deeply out of touch with the realities of many household budgets," he said. The series of "Analytical Living Cost Indexes" released yesterday by the bureau show payments by working households to financial institutions - through interest on mortgage payments and insurance premiums - rose by 11.4 per cent last financial year. "This is attributable to the combined impact of increases in debt and higher interest rates," the bureau said.

Posted by chris @ 01:31 AM 0 Comments

The Fraud Element of HPI?

Times online: Police launch inquiry into suspected mortgage fraud gangs

Or as Jimmy2times so succinctly puts it 'the tip of the sh1tberg'!? I think the article speaks for itself really: From The TimesAugust 30, 2007 Police launch inquiry into suspected mortgage fraud gangsElizabeth Colman and Gr�inne Gilmore Detectives are investigating mortgage fraud rackets after lenders alerted City of London Police to an unusually high number of defaults on commercial and residential property loans over the past six months. The reports have led the police to believe that criminal gangs, working with corrupt valuers and solicitors, are obtaining several mortgages at a time to build commercial property portfolios worth millions of pounds.

Posted by stonethecrows @ 12:26 AM 3 Comments

Wednesday, August 29, 2007

In New Zealand subrrime is run by finance companies - and they are dropping like flies Five star finance collapse

The NZ housing bubble has been helped along by lending from so-called finance companies (effectively subprime lenders). They are starting to fall like flies (3 in 10 days) - when they pop they also take debenture holders money with them too (Mum and Dad investors). Financing for spec. builders, flippers, BTLs is alll evaporating here in NZ.........

Posted by andy h @ 11:15 PM 0 Comments

Brown's been spouting the brown again

FT: Setback to Brown's housing targets

Remember this bold initiative a few months ago in response to the protests at the Labour Party Conference? Well actually there won't be that all-smiles Brown ribbon-snipping ceremony in the nasty towerblock-of-the-future Thamesmeade development the year after next because it's being successfully bamboozled by vaguely-cited "independent inspectors".

Posted by paul @ 10:45 PM 1 Comments

Meltdown: Mattel's China syndrome

smh: THE alarm bell sounded just as Mattel was preparing to announce it would recall 1.5 million Chinese-made toys tainted with lead paint.

THE alarm bell sounded just as Mattel was preparing to announce it would recall 1.5 million Chinese-made toys tainted with lead paint. Surrounded by boxes of Barbies, Hot Wheels cars and other sample toys, Tom Debrowski, Mattel's executive vice-president for worldwide operations, was leading a tense, early-morning telephone conference with his team in Hong Kong, where it was 9pm. At the time, Mr Debrowski recalls, Mattel thought it was dealing with, at most, "a single failure, from a single vendor who made a big mistake".

Posted by chris @ 10:36 PM 0 Comments

Liquidity strapped banks and asset managers ditching 'investments'

Financial Times: SIVs set for $43bn asset firesales

Mounting liquidity crisis could force firesales of as much as $43bn in assets, according to an analysis by the Royal Bank of Scotland.

Posted by enuii @ 08:45 PM 3 Comments

0.1%rise, any last takers for the the rollercoaster of doom!

Financial Times: House prices falter after rate rises

House prices barely rose in July across England and Wales, the Land Registry said on Wednesday, completing the picture of a slowing housing market after a resilient start to the year.

Posted by mr crabs @ 08:39 PM 2 Comments

More inflation?

NY Times: Wages Up in China as Young Workers Grow Scarce

Higher wages in China are likely to lead to higher prices in the United States at the mall, at the grocery, even at the gas pump

Posted by sold 2 rent 1 @ 06:33 PM 0 Comments

Could the US open a third war?

The Raw Story: US preparing 'massive' military attack against Iran

The paper, "Considering a war with Iran: A discussion paper on WMD in the Middle East" written by well-respected British scholar and arms expert Dr. Dan Plesch, Director of the Centre for International Studies and Diplomacy of the School of Oriental and African Studies (SOAS) at the University of London, and Martin Butcher, a former Director of the British American Security Information Council (BASIC) and former adviser to the Foreign Affairs Committee of the European Parliament was exclusively provided to RAW STORY late Friday under embargo.

Posted by sold 2 rent 1 @ 04:57 PM 12 Comments

The figures paint a bleak picture of low-income renters, confirming they are worst hit by the housing affordability problem.

age: Parents in mortgage stress soar

The number of families with children struggling with higher mortgage repayments has almost doubled in five years, census figures show. Almost half of all households below the median household income of about $53,000 are in rental stress. The Australian Bureau of Statistics has released a breakdown of the latest census figures showing a million households to be in housing stress where more than 30 per cent of gross income is spent on rent or mortgage repayments

Posted by chris @ 03:03 PM 1 Comments

"It's massive. It's basically a daily thing that we are hearing about," the service's Patrick Ewin said

age: Tenants given 30 minutes to move out

Tenants are increasingly falling victim to their landlord's mortgage problems, and some are being given as little as 30 minutes to vacate properties repossessed by home loan providers. The Western Sydney Tenants' Service says it has seen a fivefold increase in renters receiving possession notices over the past three months.

Posted by chris @ 03:01 PM 1 Comments

Relentless denial persists at the Times

Times Online: Could contagion from the US finally kill off the boom?

The Times analyst Gabrial Rozenberg tries to convince himself and everyone else too that the UK market isn't headed for a crash like the USA because "Britains market will be cushioned by supply conditions" which are tighter than in the US, apparently. Ireland's definitely going to crash he notes at the end of the article - but the UK's doing just fine!!! Yep, no HPC in Britain! Nothing to see here, move along now... Funny the way everyone is trying to find some reason why the housing boom in their country is going to be the exception to the worldwide credit crunch.

Posted by an bearin bui @ 12:30 PM 13 Comments

Well, who'd a-thunk-it?

Bloomberg Opinion: Global Credit Crunch Will Dent London's Economy:

Some good points but a real misunderstanding of the real issues here. While Mr Lynn,s cursory analysis does well to show how London's prosperity in the last 5 years (arguably 10 years) has been tied to the whims of esoteric financial tides , I fear that his analysis is childlike in its shallowness. He fails to link the very motor of the UK economy to availability of cheap money. This spigot just got turned on and off a few times in a week and revealed the true weakness in our illusory edifice.

Posted by lvmreader @ 12:24 PM 3 Comments

Only extreme optimists should buy to let

MoneyWeek: Only extreme optimists should buy to let

One optimistic interpretation of the recent stockmarket turmoil is that its good news for the property market. Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors, told The Independent that people who were thinking of dipping their toe into the equity market may now be tempted to forget about stocks and buy to let instead. But anyone who does has clearly forgotten that is was property that got us into this mess in the first place.

Posted by mary @ 10:27 AM 31 Comments

The 'Waterbed' effect - The banks want their money back!

Telegraph: Credit card firms turn fee losses into charges

Credit card companies are imposing new charges to protect profits after a consumer watchdog forced them to reduce other fees. Last year, the Office of Fair Trading (OFT) ordered credit card providers to halve penalty fees, by setting a maximum charge of 12. Since then, the consumer group Which? has found that the range of other fees and charges levied on credit cards has "notably increased".

Posted by tyrellcorporation @ 09:31 AM 17 Comments

Food prices will rise !

The Times Online: Meat prices rise as East turns West for food

Consumers are likely to be hit by price rises for meat and dairy products as the Far East competes with the West for stocks, market analysts claim. Farmers are facing increasing costs for livestock feed and the supermarkets will, sooner or later, pass the increases on to the consumer, according to Deloitte & Touche LLP. Yeh, let's put interest rates down. Noone eats anymore - that's so last year, daaaling.

Posted by onyerhike @ 08:43 AM 11 Comments

Murder on the dancefloor

Firstrung: Pink Home Loans witness unprecedented mortgage product withdrawal over past 12 weeks

Pink Home Loans recently emailed brokers to warn them that 'turnaround times' have been hit by the frequent pricing and criteria changes made over the last couple of weeks by lenders...The packager says it has seen an unprecedented 67 product withdrawals in just a 12 week period across its sub-prime lender panel. It also says lenders are giving "unrealistic deadlines" for intermediaries to submit cases when they make changes to their offerings.

Posted by converted lurker @ 08:07 AM 0 Comments

We were right - Smith was wrong

The Telegraph: US housing crash reminds us we're due a correction

Over the next year or two, we will hear in the following order the C word, the R word, the D word, and the G word.

Posted by sold 2 rent 1 @ 07:20 AM 21 Comments

The warning follows recalls of Chinese-made toys and blankets in New Zealand and the announcement of an investigation by the consumer affairs ministry into allegations children's clothes made in China have been tainted with the chemical formaldehyde New Zealand Issues Warning Against Poison in Chinese Toothpaste

New Zealand's health ministry warned consumers against using 11 brands of Chinese-made toothpaste after they were found to contain the poison diethylene glycol, an ingredient used in antifreeze.

Posted by chris @ 04:33 AM 2 Comments

Well maybe time to paralyze the Oil

BBC: Bush warns Iran over insurgents

As everyone knows, Oil is bought in Dollars. So if Iran supply is catastropihically disabled. Then prices will shoot, as for inflation.. Who cares.. It's all about self preservation as Iraq is turning out to be the US's Afghanistan. Relationship to the housing market, well with everything going up, meat, wheat, etc. Nikkei down, cofidence lost in the markets, misinformation. You would think Goebbels was still alive. This follow something I read regarding a catastropy, no catastrophy, like everything with this regime in the US, planned and premiditated.

Posted by stevie dee @ 01:50 AM 2 Comments

Tuesday, August 28, 2007

Climate of distrust claims more wall street victims

BBC News Online: Stock markets suffer fresh falls

Merrill Lynch tells clients not to buy shares in Bear Stearns, Lehman Brothers and Citigroup and shares in US bank State Street fell on newspaper reports that the money manager is exposed to bad debt.

Posted by enuii @ 11:17 PM 1 Comments

US property slump now beyond denial

Times Online: US house prices fall worst for 20 years

Those who have been following US house price blogs will not be surprised by this. How long will we have to wait before we are reading similar headline about the UK? I give it about 2 years yet.

Posted by quiet guy @ 10:38 PM 2 Comments

subprime woes wont go away

times online: credit crisis claims wall street casualties

Subprime "OLD NEWS" I dont think so

Posted by sold out @ 10:17 PM 0 Comments

China cannot save us this time!!

Reuters: Meat prices set to rise as feed costs soar

Deloitte said many livestock producers were facing almost 100 percent price rises in feed costs

Posted by cheeky charlie @ 10:03 PM 1 Comments

Possibilities of what lies ahead

kitco: Serious Credit Collapse Could Strengthen Dollar and Hit Gold

How this crisis might play out

Posted by sold 2 rent 1 @ 05:58 PM 12 Comments

Mystery trader bets on huge downturn

prisonplanet: Market Crash Forecast Suggests New 9/11

A mystery trader risks losing around $1 billion dollars after placing 245,000 put options on the Dow Jones Eurostoxx 50 index, leading many analysts to speculate that a stock market crash preceded by a new 9/11 style catastrophe could take place within the next month.

Such a cataclysmic jolt could only happen as a result of two factors, China dumping its vast dollar reserves in reaction to the sub-prime mortgage collapse, which it has threatened to do, or a massive terror attack on the same scale or larger than 9/11.

Posted by sold 2 rent 1 @ 04:56 PM 30 Comments

Stuff the stock markets, rescue the bees instead

CNN: As bees go missing, a $9.3B crisis lurks

Could this spark high inflation then high interest resulting in property prices crashing all because of a little bee

Posted by mark @ 04:22 PM 8 Comments

Record Drop:this only ever going one way

The Street: Record Drop in Home Prices

Either like the Chess Grandmaster you knock over the king now, or like the beginner do you need to follow through every single pre-ordained move until the end? The UK is next. It may even overtake the US on the way down.

Posted by whiteknight @ 03:58 PM 19 Comments

isnt this the bank that nearly when down?

yahoo: Deutsche Bank Americas chief says crisis starting to end

read this article, then you will know what BS this guy is talking, trying to get markets back up?? so they can bail out maybe?? read this link too (Subprime fallout heightens global rate doubts)

Posted by mark very cheesed off with uk potholed roads @ 03:36 PM 2 Comments

Mortgage lending Falls

The Daily Mail: Property market cools as mortgage lending falls to lowest level for three months

The number of people taking out a mortgage to buy a house fallen to its lowest level in three months in a further sign the property market may be cooling.

Posted by loneranger @ 02:40 PM 0 Comments

Households, the credit crunch and interest rates. Households hurt by crunch

Great article by Deutsch Bank Chief UK economist George Buckley. Reasons the view that banks will want to be paid more when they lend money to their counterparts to compensate for the 'riskier' environment.. The article states that if banks can only get money at a premium then they will likely pass on the extra cost to us!

Posted by loneranger @ 02:38 PM 0 Comments

Builder resorts to eBay

Idaho Business Review: You have been outbid on the item New Home in Meridian, Idaho

What does it say about the housing market in Idaho when Corey Barton puts its houses on eBay? Courtesy of, just the press release, plus a few neat comments.

Posted by dohousescrashinthewoods @ 01:38 PM 5 Comments

Hopes of sustained rally subside as Wall Street and ECB balk

The Times: Business News Article

David? I thought the only way was up now? And this is before the reporting season?

Posted by orwell @ 12:01 PM 0 Comments

Burn your way through red tape in Greece!

Evening Standard: Has Greece been set alight by property developers

Rogue property developers have been accused of starting the forest fires that continue to destroy large swathes of Greece. Police have arrested 33 suspects amid claims that some were paid by developers to get round planning laws.

Posted by Webmaster @ 11:34 AM 5 Comments

Commercial property owners are starting to sell up

MoneyWeek: Why City banks might need less office space than they think

Commercial property looks like its glory days are behind it. Returns are already at multi-year lows and, with things in the City looking precarious, there could be worse to come.

Posted by mary @ 11:25 AM 0 Comments

Free homes for criminals

Times: Crime suspects swap cells for city flats to ease prison crowding

Some new customers for BTL I think . . . Thousands of crime suspects are to be housed in flats and houses in cities around England and Wales while awaiting trial, in an emergency measure to ease prison overcrowding. Hundreds of low-risk criminals with no fixed address are also expected to benefit by becoming eligible for early release on a tag. The 18 million-a-year deal, in which a private company will provide accommodation for suspects and ex-prisoners, is the latest measure aimed at freeing up cells in jails.

Posted by benedict @ 11:06 AM 6 Comments

Most overpriced markets worldwide

Forbes: Worlds most overpriced real estate markets

Good article looking at prices worldwide, seems to have a reasonable methodology: The rankings were compiled by calculating an effective annualized rate of return on a property based on annual cash flows derived from renting and adjusted for capital gains tax, transaction fees, operating costs and maintenance, appreciation and inflation. For each market, it assumed no debt financing; a constant cost of capital as the buyer wouldn't shift funds based on where they buy; a 10-year hold of the property and that the property would be a nonprimary residence. Interestingly: Many of the world's most expensive markets, such as London and New York, didn't make the top 10, and were beaten out by less expensive markets that had lower yields and smaller rates of appreciation.

Posted by benedict @ 11:04 AM 2 Comments

Why our prisons are full ... 9 months for sleeping it off in an un-used car park !!!

Times Online: Is it time to rethink the ASBO?

Sorry a bit off track, but is this where aIl our hard earned Tax is being wasted ??? "The town drunk used to be given a day in the cells sobering up. Now he can be thrown in jail for nine months" B&B with bacon & eggs in jail = 20, and good public relations. 9 months in jail = something like 5,000 per month, and bad public relations.

Posted by fahrenheit451 @ 10:48 AM 6 Comments

Slow to a standstill ?

Financial Times Online: House prices expected to slow to near standstill

The house price boom of recent years could be set to slow to a near standstill next year even assuming the credit market storm blows over. Fionnuala Earley, chief economist at Nationwide Building Society, said she expected property values to rise just 2 to 4 per cent in 2008 earnings growth or less as affordability constraints take hold and expectations for further price rises reduce. Does anyone know - have house prices ever "stood still" ? From the graphs I have seen they tend to go up and down - but stand still ?????

Posted by onyerhike @ 10:30 AM 4 Comments

Rewards for Failure?

Guardian: City bonuses hit record high with 14bn payout

Uhm ... aren't the city bonuses supposed to be going down what with CDOs being devalued and a liquidity/insolvency crisis? It appears that we will have two house markets: one for city yuppies (booming) and another for the rest of us (topping out).

Posted by quiet guy @ 09:25 AM 22 Comments

Convergence of their Theories based upon the Long Wave Hypothesis

southerndomains: Smith, Marx, Kondratieff and Keynes

Written in 1998, this paper looks at the works of 4 economists (Smith, Marx, Kondratieff and Keynes) with respect to long-wave theories.

The article is clearly dated by viewing the internet as "a new business paradigm" which the bursting of the dot-com bubble proved incorrect.

The author clearly thought that another debt-level expansion was not possible as debt levels were at saturation limits back then. He did not foresee US IR going to 1% allowing another surge of debt levels to 360pc of GDP.

The worrying aspect is that even if we do have a depression, there is no labour-based innovation that will lead us to the next upswing in the long-wave cycle

The coming depression will last until this labour-based innovation can be discovered and implemented.

Posted by sold 2 rent 1 @ 08:10 AM 14 Comments

Monday, August 27, 2007

Houseprices caught in pincer movement on two economic fronts

Finance Markets: Inflation set to surge on food prices

Two good quotes in this article sum up the downward pressure's mounting on UK house prices this autumn. The combination of falling supply with rising demand means the inevitable increase in food prices. As these form a core basis of the CPI in the UK for measuring inflation, we can be assured that this will encourage inflationary pressures." With Britain already experiencing record levels of debt, and a collapsing lending market worldwide, there is no more redundancy left in the economy to help bolster consumer spending."

Posted by enuii @ 11:43 PM 13 Comments

Some "honesty" from the EAs.

Firstrung: House prices have suffered negative impact of recent interest rate rises

It was also revealed that 61% agents had experienced a sharp drop in the number of house hunters on their books following the latest rise.

Posted by mr crabs @ 10:54 PM 1 Comments

Credit where credit's due ?????

Financial Times: Credit-card defaults on rise in US

US consumers are defaulting on credit-card payments at a significantly higher rate than last year, raising the prospect of problems in the stricken US subprime mortgage market spreading to other types of consumer debt. Oh dearie, dearie me. Where is this all gonna end ????

Posted by onyerhike @ 07:27 PM 2 Comments

Anybody want to buy a bank? No thought not!

Yahoo: Troubled German bank sold in wake of subprime crisis

To avoid bankruptcy a German state run bank has been sold after suffering losses in the U.S. subprime crisis

Posted by ian @ 06:53 PM 1 Comments

The supply of unsold single-family homes reaches the highest level since 1991.

Reuters: U.S. stocks fall, bonds up on housing gloom

The problems just won't go away, looks like we can expect further bad data and market falls throughout the week.

Posted by enuii @ 06:42 PM 1 Comments

Sensible but Depressing Article

This is North Scotland: Falling in to Serious Debt can Happen to Anyone

Middle class can also fall in to serious dept

Posted by ian @ 04:59 PM 3 Comments

So much for the end of US sub-prime

BBC News: US home sales decline yet further

Concern that US house prices could fall sharply has returned after a key survey showed that sales fell to a near five-year low in the year to July.

Posted by paulos @ 04:18 PM 2 Comments

Alternative to BBC bias

Bloomberg: Home Resales in U.S. Probably Dropped in July for Fifth Month

Aug. 27 (Bloomberg) -- U.S. sales of previously owned homes probably fell in July for a fifth consecutive month, showing the housing slump that triggered a collapse in credit markets will drag on, economists said before a report today.

Posted by novicepete @ 12:23 PM 9 Comments

This is for you David!

CNN NEWS: Mortgage applications slip

Mortgage Bankers Association index falls 5.5 percent on lower demand for home-purchase and refinancing loans. Is this a recovery????

Posted by waitingfor hpc @ 11:56 AM 37 Comments

Hometracks says house prices have stalled

SKY News: Market Gloom As House Prices Stay Flat

House prices stalled during August as the market was hit by higher interest rates and more cautious consumers, new figures have shown. Property information group Hometrack said it was the first time for 20 months that prices in England and Wales had failed to move ahead.

Posted by Webmaster @ 09:02 AM 28 Comments

We're not the only ones!

Telegraph: Overheating sees house price downturn in Europe

Ireland & Baltic states have seen house prices fall. Romania, Bulgaria, Croatia & Russia look like they might be joining them soon. Debt levels are above 100% in Ireland, Britain, Spain, Netherlands & Denmark. Even France is starting to see some falls.

Posted by su @ 07:10 AM 4 Comments

Hometrack recognises house prices are falling.

Channel 4 News: Rate rises hit house prices

Richard Donnell, Hometrack's director or research, reckons only 9% of England and Wales saw price rises during August with 7% of the country seeing a fall. Even London, where most of the price rises were, only rose 0.1%.

Posted by su @ 06:47 AM 1 Comments

Central banks are trying to save the system.... will they succeed?

International Herald Tribune: Central banks try to prevent the global system from unraveling

By Michael R. Sesit Bloomberg News Published: August 26, 2007 PARIS: 'This financial crisis is far from over," says Rob Carnell, London-based chief international economist at ING Wholesale Banking. "U.S. house prices have further to fall; delinquency rates have further to rise; and subprime mortgage-backed assets will likely fall further." The world's major central banks face four challenges as they strive to prevent the global financial system from unraveling and growth from stagnating: Acting in a concerted manner; improving transparency; deciding who gets bailed out and who doesn't; and making sure whatever monetary medicine is administered doesn't come with destabilizing side effects.

Posted by cgnao @ 03:03 AM 2 Comments

Sunday, August 26, 2007

Santa Claus is coming earlier this year for UK Investors. Santa Claus is coming earlier this year for UK Investors.

Landlords are look to diverse areas of the world to realise there investments.

Posted by tim woz @ 10:40 AM 7 Comments

Will the "Bernanke put" happen?

Telegraph: Should the Fed cut Rates? Should it Heck!

Global stock markets appeared eerily calm last week. In London, New York and elsewhere, share prices ended most trading sessions flat, if anything posting small gains. But don't be fooled. Under the surface, the markets remain extremely volatile. Reassuring closing prices mask alarming daily swings. Across the world, the fear of another big drop remains palpable as more and more evidence emerges that banks beyond the US are nursing serious sub-prime losses.

Posted by auntir @ 09:04 AM 16 Comments

US foresees first national drop in house prices.

The New York Times: Drop Foreseen in Median Price of US Homes

The median price of American homes is expected to fall this year for the first time since federal housing agencies began keeping statistics in 1950.

Posted by baudot @ 09:01 AM 2 Comments

No subprime crisis in the UK ..... NOT! Brokers 'urge buyers to lie for home loans'

Mortgage brokers are encouraging prospective homeowners to lie about their income in a bid to secure massive loans, it is claimed. Sandra Ashcroft, 59, said she was advised by brokers to lie about her salary to secure a 102,000 loan in 2003. Two years later she increased that loan to 122,000 after claiming she was a 35,000-a-year senior midwife. In fact, she received an annual wage of between 3,000 and 5,500.

Posted by uncle chris @ 07:43 AM 17 Comments

The big banks are struggling ...

Telegraph: Loans block up London banking

Although an air of calm has descended on equity markets, the short-term money markets remain chaotic say senior bankers, who warn that the market for asset backed commercial paper (ABCP) - loans that typically last between 60 and 90 days - has ground to a halt. Problems in the ABCP markets have forced the restructuring of a number of credit vehicles linked to Barclays Capital. HBOS last week refinanced its ABCP vehicle, owing to the liquidity issues in the market. One analyst said: "With banks still struggling with liquidity, and short-term lines nearing capacity, I expect to see five-year or 10-year bonds issued in sterling or euros by big, cash-starved banks in the coming days or weeks."

Posted by uncle chris @ 07:36 AM 2 Comments

What goes around,,,.

Guardian: City stars humbled as meltdown hits Mr Sub-prime

"One hedge fund of funds manager said: Weve never seen such heavy losses in such a short space of time. It has been brutal and caught many managers out. Well, if you do inflate a balloon, don't be upset if it goes POP!

Posted by planning4acrash @ 07:30 AM 1 Comments

Interest Rates? 6% before Christmas, 6.25% before Valentines.

Guardian: GDP up for sixth consecutive quarter

Phew, I missed this at the time, GDP up to 3.2%. And people have been calling for a cut in rates!!

Posted by planning4acrash @ 07:25 AM 1 Comments

Changing sentiment from the VIs

Timesonline: Turmoil to dent house price growth

Analysts are warning that the continued uncertainty on global financial markets could pose a threat to the value of British homes Even if it blows over, homeowners are warned that the highest interest rates for six years and affordability constraints could spell the end of the housing-market boom.

Posted by mr crabs @ 01:43 AM 0 Comments

Herd mentality and sentiment

The New York Times: A Psychology Lesson From the Markets

IT is no surprise that the Federal Reserves discount rate cut has not entirely reassured investors. The Fed can stop a run on the banks, but it cannot control the speculative cycle a cycle built on psychology and misperceptions that has been sweeping much of the world for the last 10 or 12 years.

Posted by mr crabs @ 01:36 AM 1 Comments

MEW advice gone MAD or interesting sales ploy ?

Guardian: 'Release cash in your home while you've still got time'

An equity release specialist is so worried about a property crash that it is urging clients to act now rather than wait for retirement, writes Jill Insley

Posted by mr crabs @ 01:18 AM 1 Comments

Saturday, August 25, 2007

Average rural house price in Scotland is 177,007

Scotsman: Appeal of life in the country puts a rural home beyond locals' reach

HOUSE prices in rural Scotland are soaring above the cost of city dwellings, with first-time buyers and locals priced out of the market by wealthy incomers.

Posted by scunnered @ 07:39 PM 0 Comments

Central Banks Continue to Printe Billions, but this will not stop the crash Central Banks Print Another $167 bln: This Will Not Solve The Problem

In an attempt to prevent a financial crisis, the European Central Bank pumped an emergency 94.8bn ($131bn) into the banking system. This cash injection is larger than that the one that happened the day after 9/11 (69bn) which shows what a big problem the ECB is facing. This cash injection is really just the ECB printing loads of worthless fiat currency and throwing it at the problem, but this will not prevent the coming financial crisis that will hit the credit systems, including mortgages and home loans, particularly hard. Along with printing this vast amount of money, the ECB also made a one day pledge to fulfil any and all funding requests from financial institutions.

Posted by dave @ 06:46 PM 0 Comments

Flat prices go into reverse - BTL lambs to the slaughter

BBC News: UK House Prices

Might have already been done here. At first the BBC pulled these figures from its News website as they thought there was a problem with the Land Registry statistics. On checking again many of the UK's flat prices are floundering and many areas have seen reverse fortunes including many high profile locations plumeting. Scaremongering, no. Slowly but surely Semi Detached and Detached properties look to go the same way with minimal gains and again in some area actually dropping. Just like the US took 18 months to convince people prices were actually dropping, I can see these figures being dismissed as market jitters rather than an actual HPC, for now anyway.

Posted by mattpascoe @ 03:44 PM 13 Comments

Buy To Let Fever Continues as more Punters Plough Funds In

FT dot com: Rate rises fail to halt UK buy-to-let rush

So called Investors are continuing to plough money into the buy-to-let market, despite fears that rising interest rates have made the sector completely unsustainable to new entrants.

Posted by enuii @ 02:14 PM 5 Comments

Subprime woes: Foreclosures at 8-yr high in UK

business standard: Subprime woes: Foreclosures at 8-yr high in UK

"Foreclosures are at an eight-year high, lenders have repossessed a record 14,000 properties in 2007, 30% more than at the same time last year, according to the Council of Mortgage Lenders. An additional 1,25,100 households are behind in their mortgage payments,"

Posted by frank @ 01:36 PM 3 Comments

7% of adults express grave concern over their exposure to debt

SKY: Millions Worried By Rising Debts

7% may not seem like a lot but according to this report 7% is around 2 million adults. When questioned people tend to not confess to debt problems or may not realise their level of exposure because they have just MEW'ed. What hits me as frightening is that despite interest rate rises over the last year a quarter of consumers have increased their borrowing. For balance the article also states that just under a quarter of those surveyed were debt free with another 40% were not worried about their ability to repay their debts.

Posted by denzil @ 12:41 PM 19 Comments

surveyors stop and look at houses instead of doing drive buy valuations

telegraph: Surveyors clamp down in the wake of US housing crisis

Surveyors are starting to clamp down on mortgage valuations, as lenders prepare to protect themselves against the risk that house prices may falter and even fall.

Posted by mr crabs @ 12:29 PM 3 Comments

The most worrying news yet.......

CNN: Fed bends rules

Seems the Fed has admitted yesterday bending its own rules to get two massive banks out of the morass (2 of the very same banks that used the discount window for 'symbolic purposes' earlier). wow this goes deep.........

Posted by andy h @ 10:16 AM 3 Comments

Pressure on prices

reuters: Rates on the rise for subprime mortgage borrowers

UK subprime mortgage borrowers are facing a sharp rise in rates as credit market turbulence adds to pressure on funding costs, lenders and brokers said on Friday, reviving fears of increased arrears and repossessions. Combine this with reported central london property decline - (lead article on today: and what do we get...

Posted by mken @ 09:04 AM 0 Comments

Cracks or major fault lines benig revealed?

Firstrung: Sub prime mortgage lending beginning to crack

"It's a sign of the times that the Bank of England has been forced to use its position of lender of last resort and offer a helping hand, granting a 314m loan at 6.75% to an unidentified lender". "While its a little too early, for the prime mortgage market to be affected by the stock market turmoil, the sub prime sector is beginning to show cracks. Victoria Mortgages has withdrawn its sub prime range, GMAC-RFC increased rates by 0.75%, Mortgages Plc increased rates by up to 1% and Northern Rock by up to 0.55%. SALT will no longer considering applications from borrowers with any arrears in the last three months.

Posted by converted lurker @ 08:03 AM 8 Comments

Ratings agencies suddenly go bearish

Firstrung: Ratings agency expects arrears and repossession levels in UK to rocket

Fitch Ratings has announced that they expect arrears and possession levels in the UK sub-prime mortgage sector to continue to increase over the next few months... The agency recently published their latest quarterly performance report for the sub prime mortgage lending sector revealing a deterioration in arrears in Q2 2007 compared to Q1 2007.

Posted by converted lurker @ 08:01 AM 10 Comments

US credit turmoil hits London property

FT: US credit turmoil hits London property

Fears are growing that the fallout from the US subprime mortgage meltdown will hit house prices in central London, one of the worlds hottest high-end property markets.

Posted by homerjay @ 12:39 AM 1 Comments

Friday, August 24, 2007

Looks Like The Party Is Over (for a while)

FT dot com: House prices expected to slow to near standstill

Don't you just love Bank Holiday Weekends as you can get all sorts of 'bad news' (sic) stories out in the hope that they will all be forgotten about by Tuesday.

Posted by enuii @ 08:56 PM 15 Comments

Buy now pay later is ingrained in UK consumer culture

The Daily Reckoning: UK Consumer Debt More Than GDP

Well and truly gone are those days when saving for goods or a rainy day was the norm. Consumer debt has risen 10% since this time last year and now stands at 1,345bn. Debt now exceeds the entire output of goods and services according to accountants Grant Thornton.

Posted by denzil @ 06:56 PM 3 Comments

2nd Quarter Statistics for Scotland now available

BBC: IK House Prices

Just noticed the 2nd Quarter statistics for Scotland are out. This link is also available on HPC external links. House prices in your area with the BBC.

Posted by su @ 05:00 PM 3 Comments

Does personal debt exceed GDP?

David Smith: Business Article

Well does it? I thought everybody had agreed it was 167% of GDP?

Posted by orwell @ 02:36 PM 0 Comments

While interest rates go up, we are also being taxed into submission.

Property Week: Conservative group calls for abolition of Inheritance Tax

One of my old gripes against this government, but the Conservative Party is suggesting an abolition of the Inheritance Tax, and other reductions, definitiely a step in the right direction ... "A Conservative policy group has proposed abolishing Inheritance Tax and slashing corporate taxes to make the UK more economically competitive." "The report, which is not binding on the party, also called for reduced taxes on business profits to make the economy more competitive. It said Corporation Tax, which is payable on business profits, should be reduced from 30p in the pound to 25p. It recommended that the tax for small businesses should be 20p in the pound."

Posted by fahrenheit451 @ 12:08 PM 43 Comments

It's not a bed of roses, even for commercial property ...

Property Week: Credit crunch hits Macquarie HQ hunt

"Macquarie has put its search for London and New York office headquarters on ice because the turmoil in the credit markets." "City sources say that, given the recent credit crunch, the bank has decided against taking any decision at this point. It is understood to have put the search on hold last week and will renew its options again next year."

Posted by fahrenheit451 @ 12:01 PM 0 Comments

People really should read the things they sign

BBC News: Shrewd lenders spark US mortgage chaos

"In Milwaukee alone, 20 to 25 new homes with a combined market value of some $2m (1m) are being foreclosed, or repossessed, every day. State-wide there was a 34% rise in the number of people who faced eviction in 2006 and Ms Derus believes that that number will double this year."

Posted by night @ 12:00 PM 2 Comments

Where's my cheap credit gone?!?

BBC: Northern Rock ups sub-prime rates

Northern Rock is to lift the rates on its range of fixed-term mortgages for borrowers with patchy credit histories. From 29 August, sub-prime home loans at the lender will cost up to 1.25% more. Loans that track the Bank of England's base rate will no longer be available. ...I Liked this line! 'The bank said it was not at risk from sub-prime lending, as it passes those loans to an arm of Lehman Brothers.' ...pooof, the nasty debt magically disappears!

Posted by tyrellcorporation @ 11:30 AM 7 Comments

auctioneers bidding for vendor, whats next outright fraud?

Right move: Alpraham, CW6

what is interesting is this, how is this legal? Method of Sale he property will be sold at a reserve price and the Auctioneer reserves the right to bid on behalf of the vendor or to withdraw the property.

Posted by mark @ 11:29 AM 2 Comments

The Helicopter remains firmly grounded (US rates won't be cut)

The Economist: The Fed keeps its head

"Investors should think twice before assuming that Mr Bernanke will soon act to reduce the federal funds rate. While mortgage lenders and financial institutions heavily invested in American mortgage securities have struggled mightily, recent reports from the broader economy have been anything but uniformly negative. Employment numbers have held up even as home construction has collapsed. For the moment, conforming mortgages remain stable and large firms unconnected to the home-mortgage market have yet to experience serious trouble. Moreover, financial markets remain in positive territory for the year, despite the past weeks gyrations. Do not expect Mr Bernanke to bend to the demands of overextended investors suffering through short-run volatility." - Hmmm, so the "real economy" is ok?

Posted by drewster @ 11:18 AM 0 Comments

benefits of a recession

The Economist: Does America need a recession?

Some economists believe that recessions are a necessary feature of economic growth. Joseph Schumpeter argued that recessions are a process of creative destruction in which inefficient firms are weeded out. Only by allowing the winds of creative destruction to blow freely could capital be released from dying firms to new industries

Posted by sold 2 rent 1 @ 10:37 AM 10 Comments

Too early to send in cavalry to save mortgage defaulters

TELEGRAPH UK: Retailers batten down the hatches

argues that two million mortgage defaults - that's the alarming projection doing the rounds - could lead to the worst property slump since the Great Depression, with prices sliding by maybe 10pc or more.

Posted by chris :-)) @ 10:08 AM 0 Comments

Global poison

Guardian: Bank of China admits sub-prime exposure

Countrywide, the largest US mortgage lender, warned yesterday that the US economy was teetering on the brink of recession after a severe downturn in the housing market and a sharp slowdown in consumer spending.

Posted by inbreda @ 09:38 AM 0 Comments

Barclays Capital's CDO chief quits

FT Online: Barclays Capital banker quits

Edward Cahill, a banker who ran the collateralised debt obligation division at Barclay Capital's quits after holiday. Rumours abound. There's a piece in the Daily Mail's City diary that Barcap may be exposed in a big way...

Posted by neil @ 09:31 AM 0 Comments

Markets regain liquidity but outlook unclear

The Times: Business News

Investors are unlikely to see the full damage that turmoil in credit markets has wrought on the banks until their third-quarter results are released. The market is watching for signs of discomfort. In the US, hopes that Countrywide was on a firmer footing after a $2 billion capital infusion by Bank of America were set back after the chief executive of the home-loan provider struck a negative tone on the housing market. Angelo Mozilo, Countrywides founder, said: If this trend continues, its going to have an impact on the overall economy. Ive seen this movie before, and the ending of the movie always ends up in some form of recession. What Recession Mr. Mozilo? Don't you mean a depression?

Posted by orwell @ 09:02 AM 0 Comments

Debt destruction (depression) here we come.

Independent: For the first time, Britons' personal debt exceeds Britain's GDP

Image if all that liquidity had gone into securing - Elimination of the UK's carbon footprint. - Restoration of the nation's crumbling listed buildings - A high speed rail network covering Cornwall, Wales and Scotland - Crossrail and tube upgrades - Housing association new build and new council housing - Expansion and linking of our national parks and other natural treasure. Oh, shi%t, the government spent it on a war in Iraq and we spent it on houses we already had, betting on rising prosperity of homeowners without doing anything to raise our productivity, oops! Its the biggest waste and nonsense in history. Are humans smarter than yeast?

Posted by planning4acrash @ 06:50 AM 4 Comments

6% IR and we're doomed! say EAs

WhatInvestment: Interest rates start to bite

NAEA survey reveals interesting statistics about housing market. All is not rosy in EA land and they're desperately clinging to the hope that interest rates are not rising (at least temporarily.)

Posted by su @ 06:07 AM 8 Comments

Repossession Tragedy

BBC: Shrewd lenders spark US mortgage chaos

Story of crippled divorcee losing her home, the article manages to cram in everything: Bills, debt, refinance, race (why is it mentioned?), small print, repossession, banks, brokers, borrowers, bonds, subprime, negative equity. I could quote from every paragraph, but what i want to know is what is the 5th B? bankrupt ?

Posted by ds_t @ 05:16 AM 1 Comments

Buy it, quick

BBC: Buyers 'pick home in 17 minutes'

"The pace of today's housing market puts a huge amount of stress on buyers and our research shows this can lead to snap decisions being made when choosing a new home,"

Posted by ds_t @ 04:24 AM 2 Comments

Rise, Drop, I always get those confused.

999Today: UK property prices to rise 40% by 2012

The average house price in the UK will rise by 40 per cent over the next five years to reach 302,400, a report finds. The National Housing Federation (NHF) report also shows that the average property price in London will increase to almost 500,000 by 2012.

Posted by mr crabs @ 02:48 AM 4 Comments

A depressing observation from a UK political blog about debt.

Guido Fawkes Blog: Every Week 2,000 People Go Bust

Gordon likes to talk about stability and prudence, but rising indebtedness and rising interest rates have led to people going bust and losing everything at the rate of 2,000 a week.

Posted by quiet guy @ 12:58 AM 1 Comments

Thursday, August 23, 2007

When being bullish is really just bull

BBC News: Wall Street shares decline, AGAIN.

US stocks ended lower on Thursday after the head of the country's largest mortgage lender warned that the housing market slump could spark a recession.

Posted by planning4acrash @ 11:44 PM 2 Comments

Inflation, inflation, inflation.

FT: Wheat prices jump to record high

Ooo aaar, I think I'll settle myself with a bottle of cider to calm mi farmer nerves, aaare.

Posted by planning4acrash @ 11:29 PM 2 Comments

Northern Rock initiates moves to retreat from UK sub-prime mortgages by escalating interest rates on fixed-rate loans

The Times: Northern Rock prices itself out of sub-prime

"It (Northern Rock) has now hiked interest rates on its fixed-rate loans for future borrowers by up to 1.25 per cent and scrapped its tracker range". Phew, that's an extra 2500/yr on a 200k mortgage, or 48-quid a week. I know that I'd be a bit pi*ed, if my rent went up by that much, and I spend nothing close to what a homeowner (flat in Ldn) pays. If this is just the beginning then it must be the beginning of the end. There's no way that house prices can sustain this kind of carnage. What I couldn't find out is, what is their rate now, their website keeps that a bit quiet, can't find rates on it, what a surprise!

Posted by planning4acrash @ 11:27 PM 8 Comments

Be very careful. Interest rates in Europe and Asia are that much higher now, with delayed effects starting to bite hard. Japans economy has stalled to 0.1pc growth in Q2; the euro-zone has slowed to 0.3pc; and Chinas refusal to import (by currency manip

TELEGRAPH UK: Brace yourself for the insolvency crunch

These CDOs were the only way to get rid of the riskiest tranches of subprime debt. Interestingly enough, these buyers (mainland Chinese banks, the Chinese Government, Taiwanese banks, Korean banks, German banks, French banks, U.K. banks) possess the 'excess' pools of liquidity around the globe. These pools are basically derived from two sources: 1) massive trade surpluses with the U.S. in U.S. dollars, 2) petrodollar recyclers. These two pools of excess capital are U.S. dollar-denominated and have had a virtually insatiable demand for U.S. dollar-denominated debt . . . until now.

Posted by chris :-)) @ 11:20 PM 0 Comments

Can't say I have any sympathy. It was a free money arbitrage situation which was used to create ridiculous amounts of leverage. When you gamble that way, you take your chances and if you aren't smart enough to get out before the scam ends, you deserve to

agonist.: The Yen Carry Trade Unwinds

unwinding now because large numbers of people are having to close out positions and thus repay their Yen denominated loans standard play was to borrow in Japan (which has had zero or near zero prime rates all decade) and then buy foreign denominated assets. When you unwind you have to convert your foreign currency back into Yen.That increased demand is driving up the price of the Yen. As the Yen goes up, you get into a classic vicious spiral - the higher the Yen is compared to when you borrowed, the worst the (non Yen) assets you bought with that loan are looking.A large enough rise in the value of the Yen can wipe out your gains entirely, or even convert them into losses.

Posted by chris :-)) @ 10:46 PM 0 Comments

Immigration divides England into two zones

Telegraph: Immigration divides England into two zones

The British are fleeing to the countryside while the cities are overwelmed with immigrants. Quite a bold article. New Labour, the far left in disguise, has sold our country.

Posted by scott @ 09:58 PM 0 Comments

UK Sub prime in Manchester

Manchester Evening News: Low paid 'urged to lie' for mortgage

UK sub prime? - On the front page the the Manchester Evening News of all places!

Posted by ds_t @ 08:45 PM 0 Comments

"Save us, Mr Bush"

Telegraph: Bush should bail out sub-prime industry

Mr Gross (managing director or Pimco urged Bush to "write some cheques" to "prevent destructive housing deflation". He warned that house prices in the US could drop by as much as 10% which would amount to throwing 2,000,000 homeowners to the wolves in 2007.

Posted by su @ 05:24 PM 6 Comments

Bailing out the offenders is not without consequences

FT: The next financial crisis starts here

There was a great cartoon in the print edition of the FT this morning under this article.

Posted by paul @ 04:29 PM 1 Comments

who is next? redrow? barrett? bobby the builder?

BBC: US builder hit by mortgage woes

this is an interesting little article about some builders in the USA...

Posted by mark @ 02:38 PM 0 Comments

It's OK, the ECB & Fed are going to subsidise our gambling habits permanently.

BBC News: Credit markets get rates bounce

OK, if you hit yourself on the head with a cricket bat you quickly learn never to do it again.

Posted by symo @ 12:09 PM 7 Comments

Is it one more IR rise?

The Telegraph: Full order books put pressure on Bank to raise interest rates again

The CBI said its barometer of factory orders jumped from -6 to +9 points in August - the highest level since May 1995.

Posted by sold 2 rent 1 @ 11:48 AM 3 Comments

70 year debt cycle near peak

Safe Haven: Liquidity Can't Solve Insolvency

"In the 1950's, every dollar of new debt produced over $4.00 of economic activity. But by Year 2000 it had dropped to 20 cents of GDP growth and only 10 cents by 2005. Last month fell to only a nickel of economic growth for every dollar of debt growth"

Posted by sold 2 rent 1 @ 11:41 AM 19 Comments

Wages rising in China

The Telegraph: Hoover owner looks at moving out of China

TTI, which transformed its international profile when it paid just over $100m (50m) for Hoover last December, said a combination of rising raw material costs, wage inflation in southern China and an increased tax burden meant it was sensible to increase its production capacity in low-cost markets where it was closer to some of its major customers. These include Mexico, where it already has factories, and possibly lower-cost countries in eastern Europe.

Posted by sold 2 rent 1 @ 11:29 AM 5 Comments

Now it's getting nasty, handbags at twenty paces

Timesonline: HSBC denies blame for forcing Barclays into the red over loan

Barclays faced fresh embarrassment yesterday over its 314 million emergency loan from the Bank of England, when HSBC, its rival, furiously denied that an error by its bankers had forced Barclays into the red.

Posted by mrmickey @ 10:52 AM 0 Comments

BoJ bottles it

BBC: Bank of Japan keeps rates on hold

The Bank of Japan has opted to keep its key interest rate unchanged at 0.5% for the sixth month in a row.

Posted by holding out @ 09:13 AM 6 Comments

They coincided with a warning from mortgage lender Nationwide that house prices are set to fall sharply back into line with wage inflation next year, as the credit crunch pushes up interest rates for families around the UK.

TELEGRAPH UK: Record numbers face debt meltdown

The scale of Britain's personal debt mountain has come into sharp focus with new research showing a record number of households are facing serious debt repayment problems, and that Britons owe more money than the entire economy can generate in a year.

Posted by chris :-)) @ 06:57 AM 1 Comments

In the hand of the inevitable

Independent: City braces itself for job losses as crisis spreads

This will result in a lot more than a 10% drop in bonuses and a third of structured credit jobs going. This is the start of a mini-Armageddon: a hurricane, tsunami, earthquake and plague all in one.

Posted by lvmreader @ 05:58 AM 28 Comments

He drives a Ferrari and lives in a $50-million mansion that has drawn the ire of neighbours and the NSW Greens. He defends the house and sets the record straight on just how many bedrooms and bathrooms he has. I began by asking him just how much impact th

ABC news: Well nobody can predict because we've got some nasty clouds out there. They certainly, those clouds have opened up in Europe and in Canada, I've heard. It could be a quarter of a per cent, it could be a half per cent. But the upside to that is, if that di

mortgage mogul John Symond. Love him or hate him, his face and voice is synonymous with the home loan industry. John Symond has made a fortune, about $365-million, selling cheap loans to Australians, but now, he says, we've gone too far. We've over-borrowed. We're maxed out as a society. So the looming credit crunch is going to hurt us all the more.

Posted by chris :-)) @ 04:47 AM 0 Comments

Dont Worry I Have A Good Place


One of Woody Allen's best jokes was: "A stockbroker is someone who takes your money and invests it... until it has all gone." Laugh, I nearly called my financial adviser and told him to switch everything into government-backed bills.

Posted by chris :-)) @ 02:12 AM 0 Comments

Debt, debt and more debt.

Telegraph: Record numbers face debt meltdown

Wow, we already passed the point where we have more debt than the size of our economy (some time ago, I didn't realise that). This just goes to show that a number of people here may be right when they say that, not only must asset prices (houses) go down, but debt destruction must also occur. Of course, this can occur by a reduction in value or by inflation. We have a choice and it seems that banks would prefer inflation at present, with all the liquidity they are feeding the system.

Posted by planning4acrash @ 12:30 AM 10 Comments

Cannex estimates that the low-doc mortgage market is worth $38 billion today and accounts for 16 per cent of the home loan market. It reviewed 389 loans. The most significant finding of the survey was the wide variation in rates. No record, no salary, no problem

They liked the loans because they didn't have to supply a year's worth of payslips to get approval. Because of what is happening in the US, experts say we have only seen the tip of the iceberg. Cannex said the 15 biggest banks may do more than just threaten to push up variable home loan rates in the coming months if the crisis worsens, but it was the smaller Australian low-documentation lenders that may start to drop like flies

Posted by chris :-)) @ 12:21 AM 0 Comments

Wednesday, August 22, 2007

The liquidity pump remains firmly on...

FT: ECB move to inject funds lifts markets

The ECB is still busy getting money out onto the market as fast as it can. The damage will be longer term.

Posted by whiteknight @ 10:40 PM 3 Comments

Lehman Brothers kisses bye-bye to their subprime business

New York Times: Lehman Closes Subprime Unit and Lays Off 1,200

Well, that's more that 4% of their workforce gone. Still, it's 4% fewer people clamouring for bonuses at Xmas time "Lehman Brothers, a leader in packaging subprime mortgages into securities, is shutting down one of its home lending units and laying off 1,200 employees. The bank said it would take a $52 million hit to third-quarter earnings. Lehman Brothers announced today that market conditions have necessitated a substantial reduction in its resources and capacity in the subprime space, the firm said in a news release. Lehmans decision to shutter the lending unit, BNC Mortgage, makes it the latest casualty in the subprime mortgage meltdown that started earlier this year and rippled into the broader credit markets starting in late July. "

Posted by jeremiah @ 10:22 PM 0 Comments

sub prime in the uk squeeze

BBC News: Risky borrowers see loans tighten

Would-be UK home owners with bad credit histories are finding it harder to get mortgages, experts have told the BBC.

Posted by james @ 09:45 PM 0 Comments

European Central Bank announced it would add an additional 40bn ECB move to inject funds lifts markets

Global equities rallied while safe-haven government bonds continued a dramatic sell-off after the European Central Bank announced it would add an additional 40bn into the three-month money market where interest rates have shot higher during the recent financial turmoil. The European Central Bank also signalled its monetary policy would not be blown off course by the credit turmoil by hinting it would also increase its main interest rate again in September.

Posted by chris :-)) @ 09:23 PM 1 Comments

Yet more banks line up to take easy money ... Big Banks Tap Fed Window

Citi and JPMorgan seek to ease credit crunch concerns.... apparently having to borrow $500 million in this fashion is now described as "aiming to make a show of confidence".

Posted by whiteknight @ 07:29 PM 2 Comments

Structural Inflationary pressures remain a backdrop to calls for rate cuts.

The Oil Drum - Canada: World Oil Forecasts Including Saudi Arabia - Update Aug 2007

"World total liquids production remains on a peak plateau since 2006 and is forecast to fall off this peak plateau in 2009. According to the IEA, the current peak production of 86.13 mbd occurred on July 2006 and only one year later, June 2007 total liquids production fell to an unexpectedly low 84.28 mbd. As long as demand continues increasing then prices will also continue increasing".

Posted by planning4acrash @ 07:18 PM 1 Comments

UK Housing Market Crash of 2007 - 2008

Market Oracle: UK Housing Market Crash of 2007 - 2008 and Steps to Protect Your Wealth

Summary of the current state of affairs, including all the widely known factors; adjustable rate mortgages coming to an end; increasing reposessions, decline of city bonuses (who's gonna reward fund managers for losing one year of gains?), BTL market, etc.

Posted by ernesto garbarino @ 07:07 PM 3 Comments

is this the start?

yahoo: Nationwide says market turmoil more risk for housing

This sounds to like oh Sh** it is going to crash..

Posted by mark @ 04:44 PM 0 Comments

The credit crunch and the UK debts blacklist

This is money: One in six soon to be on a debts blacklist

The global credit crunch will see a sharp rise in the number of Britons put on a debt blacklist and denied mortgages, loans and credit cards, experts claim. The seven million turned down by mainstream lenders in 2006 is predicted to soar to at least 8.6m by 2011 - around one in six of the adult population.

Posted by loneranger @ 04:29 PM 1 Comments

Subprime Turmoil in the UK

The Daily Mail: Will subprime turmoil hit UK mortgages?

Homeowners have been left baffled by mixed messages from the mortgage market, with the cost of some loans falling while warnings are sounded that others will rise.

Posted by loneranger @ 04:25 PM 0 Comments

Thousands of jobs may be lost in the City of London, with record-breaking bonuses cut, as a result of the turmoil in the markets

BBC News: Market woes 'to cost City jobs'

Mr Said added that he also expected to see City bonuses fall by up to 15% in 2007 as other businesses try to trim costs. Last year, bonuses in London's financial centre - which employs 340,000 professional workers - rose 18% to a record 8.8bn ($17.5bn).

Posted by disillusioned @ 02:36 PM 0 Comments

US Liars loans (UK lie to buy)

BBC News: Liars loans

Explains whats happening in the US at the moment in the sub prime market and how this impacts banks globaly.

Posted by mark watkins @ 02:34 PM 0 Comments

An excellent article by one of my most respected financial analysts

The Market Oracle: UK Housing Market Crash of 2007 - 2008 and Steps to Protect Your Wealth

Whatever you do, remember that today's Idyllic pleasant picture in the UK is very shortly in for a rude awakening, much as the US home owners are experiencing in increasing numbers. The bull market in housing is over for now, better to realize this now whilst you have the opportunity to do something about it rather than be forced into a decision later on.

Posted by in the delhi @ 01:38 PM 0 Comments

rumour or not?

Here in the city: Rumour That Big US Investment Bank Is Going Belly Up

Rumours are sweeping Wall Street that a large US investment bank, thought to have taken a huge bath in the recent market turmoil, is going to go belly up and file for Chapter 11 bankruptcy protection.

Posted by joe le taxi @ 01:09 PM 0 Comments

Record number of people leave UK

BBC: Record number of people leave UK

Not suprising really; no prospects unless you either make it as a fund "manager" or a Gangsta.

Posted by doomwatch @ 12:48 PM 20 Comments

Some light relief for you all on a quiet day...


Nothing much happening here. Stocks up a bit, no-one very interested, so here's something amusing wot I found instead.

Posted by stoatgobbler @ 11:46 AM 5 Comments

Course it'll never happen here 'cos it never has (recently)

BBC: Surge in US home repossessions

The number of home repossessions in the US soared in July, figures suggest, underlining the woes facing the sector

Posted by holding out @ 09:36 AM 3 Comments

Pain being felt even where exposure is minimal. Very early on in the crisis I may add.

Independent: Credit crunch takes toll as HBOS steps in at Grampian

"The revelations came a day after yields on three-month US Treasury bills - a safe haven investment - fell to their lowest levels since 1982, registering a drop more extreme even than the one that occurred in the stock market crash of 1987, as investors fled risky assets".

Posted by planning4acrash @ 09:22 AM 3 Comments

Beware of the pundits

FT: Housing boom will not end in a crash, says Harvard

This article from only a year ago claims that there will be 'stagnation' in the US housing market. The justification for the soft landing are : 1) Immigration and house hold formation. 2) Low unemployment. 3) Historically low interest rates. Where have we heard this before????

Posted by davros @ 09:07 AM 7 Comments

and lays off 6000 workers

CNBC: Mortgage Lender First Magnus Files Chapter 11

First Magnus Financial, one of the largest independent U.S. mortgage lenders, filed for Chapter 11 bankruptcy protection on Tuesday, the latest home loan provider to collapse as the housing market slumps and credit crisis widens. It said it laid off most of its nearly 6,000 employees on Thursday, leaving about 60 workers. First Magnus was the 16th-largest U.S. mortgage lender from January to June, originating $17.1 billion of home loans, according to the newsletter Inside Mortgage Finance.

Posted by vfr @ 08:31 AM 0 Comments

Fed chairman signals US interest rate cut

Guardian: Business News Article

Well will he or won't he? I say he does and compunds the problem. Common sense says he shouldn't and that the Fed should have acted earlier to prevent the bigegst credit bubble in history. Bernake.... FEED ME.....

Posted by orwell @ 08:30 AM 0 Comments

A fugitive U.S. hedge fund manager who admitted defrauding investors out of millions of dollars was arrested in Greece on Monday, Greek police said on Tuesday.

Reuters: Fugitive U.S. hedge fund manager arrested in Greece

Haligiannis told investors his funds managed $180 million in 2003 and that the fund had achieve returns of 1,565 percent between 1996 and 2003, according to the indictment. Based on those claims, Haligiannis raised a total of $26 million from some 80 investors.

Posted by chris :-)) @ 08:23 AM 0 Comments

structure fall apart

Mr Lipsky said this had caused uncertainty about what risks a counterparty institution might be bearing and, in turn, contributed to the drying up of liquidity in parts of the markets.

FT: IMF warns of risk to global growth

Turmoil in the financial markets will affect growth worldwide, John Lipsky, the number two official at the International Monetary Fund, said on Tuesday.In the first interview by a senior IMF official since the market turmoil intensified, Mr Lipsky, a former senior banker at JPMorgan, told the Financial Times: This undoubtedly will dampen economic growth.

Posted by chris :-)) @ 02:06 AM 0 Comments

Commodity prices may no longer support many of the higher- yielding currencies that benefited from the carry trade, according to Yamamoto. Citigroup Raises Yen Forecasts as Subprime to Hurt Carry Trades

Aug. 20 (Bloomberg) -- Citigroup Inc. raised its year-end forecasts for the yen by 15 percent as financial market turmoil sparked by losses on U.S. subprime mortgages will reduce appetite for carry trades. The yen gained against the 16 most-active currencies last week and rose the most against the dollar in more than five months as delinquencies on mortgages to U.S. homeowners with poor credit made banks reluctant to lend. A credit crisis and a sell- off in global equities prompted a reversal of bets on higher- yielding and riskier assets made with borrowed yen, known as carry trades.

Posted by out of my carry @ 01:58 AM 0 Comments

The impact of those retail investors repatriating their funds is likely to be much larger than that which has been seen so far. Forex volatility threatens carry trade

Mr Sasaki estimates Y7,000bn ($61bn, 45bn 31bn) in yen short positions through margin trading, day traders bought back yen to the tune of Y3,800bn in just one week. big question is what the large number of Japanese investors who have bought investment trusts or uridashi bonds denominated in dollars high-yield currencies will do.these investors, who have generally invested surplus funds, have stood firm.US interest rates start to fall sharply and the dollar plunges as some believe will happen even those investors could choose to redeem.The impact of those retail investors repatriating their funds is likely to be much larger than that which has been seen so far.As one banker says:Japan is the provider of the worlds liquidity So the unwinding of that will have a big impact.

Posted by chris :-)) @ 12:49 AM 0 Comments

Tuesday, August 21, 2007

We sense in the markets that the readiness of foreign banks to extend credit lines to German banks has become difficult," WestLB Chief Executive Alexander Stuhlmann told journalists late on Monday in remarks embargoed until Tuesday

smh: Foreign banks 'wary' of German banks

German banks face a critical situation because foreign banks are reluctant to lend to them after the joint rescue of small-company lender IKB, state-backed lender WestLB's chief executive said. "We sense in the markets that the readiness of foreign banks to extend credit lines to German banks has become difficult," WestLB Chief Executive Alexander Stuhlmann told journalists late on Monday in remarks embargoed until Tuesday

Posted by chris :-)) @ 11:58 PM 0 Comments

Before it keels over, a bull market typically leaves a few road signs. Here's what to keep an eye on - from Money Magazine.

CNN Money: 5 ways to know if the bull is over

A fun article that says the obvious, but it gives focus to what's important. I'm glad that it recognises the importance of oil prices.

Posted by planning4acrash @ 11:00 PM 26 Comments

The credit crisis inched closer to the heart of the British financial system yesterday as HBOS, the banking group, disclosed that it was bailing out a vast in-house fund that has been struggling to finance itself.

times: HBOS bails out own fund as effect of credit crisis spreads

Sources described Barclayss use of the Banks emergency facility, which is priced at a punitive 1 per cent above base rate, as an operational issue and not related to fears over liquidity. It is the first time that the facility has been used since the credit market soured.

Posted by chris :-)) @ 10:43 PM 0 Comments

This news adds to our perception of downside earnings risk," it added.

times: Northern Rock falls on details of US debt exposure

Last night in response to investor inquiries the bank revealed it has invested 200 million in US collateralised debt obligations (CDOs) and a further 75 million in US home equity mortgage-backed securities. In reaction Panmure Gordon, the broker, said it would continue to put its forecast and price target for the group under review.

Posted by chris :-)) @ 10:39 PM 0 Comments

Now It's Commercial Paper Instead of Hedge Funds and Sub-Prime

Times Online: Banks get new battering as commercial paper is caught up in crisis

Apparently loans are bundled up and flogged to companies and financial institutions in special financing vehicles called conduits that are then sold to investors, such as money market funds, insurance companies or other banks, by issuing commercial paper, or bonds, which pay a coupon. Though apparently the punters have gone off them and now prefer short-term safe havens such as US government debt. Well I never, you learn something new every day.

Posted by enuii @ 10:23 PM 6 Comments

Countrywide fights back, says it's well capitalised

Economic Times: Business Article

If Countrywide is saying this then I warrant they must be in trouble.

Posted by orwell @ 10:08 PM 0 Comments

Bye Bye Northern Rock... I know a good Insolvency Practitioner

The Times: Business News Article

But what about its exposure to sub prime in the USA and Buy to Let over here (assuming BTL is Sub Prime as our Guru on his web site says it isn't). Will anybody want it.

Posted by orwell @ 10:00 PM 0 Comments

93% jump in filings for repossessions on the same month a year ago!

BBC News: Surge in US home repossessions

Data from consulting firm Challenger, Gray & Christmas said the housing industry had announced 87,962 job cuts so far this year - 75% more than recorded for all of 2006, with 41% linked to housing market troubles. Nearly a quarter of the year's cuts had been announced in August alone, it said. "Many companies expected the mortgage situation to implode. They've just been wondering when the bubble would burst," said chief executive John Challenger.

Posted by cheeky charlie @ 09:32 PM 0 Comments

Market illiquidity

Times Online: HBOS forced to tap balance sheet in illiquid markets

HBOS will provide emergency funding to Grampian, its $35bn credit investment vehicle, as credit markets prove too costly

Posted by alan @ 09:04 PM 0 Comments

Inflation quietly ticks away.

BBC News: Bank lifts China's interest rates

This will put a downward pressure on western currencies and confirms that Chinese inflation is about to be exported to a town near you!

Posted by planning4acrash @ 07:34 PM 1 Comments

Sharp practices by Britain's house builders

Channel 4 Dispatches: Britain's Bad Housing

A Dispatches program on a few weeks ago, but for those that missed it they have a web page up about it now. The program discussed: Common shoddy building. The fact that developers are only interested in building expensive and thus high profit margin properties (flash pads in fancy locations, high density). Little interest in schemes to encourage 'affordable' house building. Land banks and the myth that there isn't enough land to build on (though there may not be as much prime, highly profitable land with scenic country views as they might like). Corruption and collusion with councils and the like to seize profitable land for development (in one case compulsory purchase to knock down existing good homes). Etc. Confirming everything a cynic would expect from them really.

Posted by rentingruss @ 04:11 PM 7 Comments

'If I'd read the fine print I'd have steered away'

The Guardian: 'If I'd read the fine print I'd have steered away'

Alvin and Debbie Clavon have been caught up in the American sub-prime mortgage crisis that has rocked financial markets across the world

Posted by yes @ 03:08 PM 2 Comments

Woes mount as Countrywide dumps 500 jobs, S.F.'s Luminent sells stake cheap

San Fransisco Chronicle: Capital One shutters its GreenPoint Mortgage unit

Capital One Financial Corp. said Monday that it will cut 1,900 jobs - including 500 in Marin County - and shutter its wholesale mortgage banking business, a move that comes as lenders continue to struggle in the nation's housing and credit markets.

Posted by planning4acrash @ 01:57 PM 2 Comments

Rightmove reports modest increase in house prices for August

Rightmove: House Price Index Report

"This months rise of 0.6% is the fourth time sellers have pitched their prices at less than 1% above the previous month, a pattern not seen since January 2006. Should this trend continue, it would be consistent with the annual rate of house price inflation becoming more closely aligned with annual wage inflation, currently running at around 3% to 4%."

Posted by tttonyyy @ 01:56 PM 18 Comments

Another one bites the dust

The Independent: UK hedge fund manager Solent falls foul of credit market turmoil

Solent Capital, a UK hedge fund and specialist credit investor, has said it might have to sell some assets in one of its funds because its banks refused to loan it any more money. The fund, which manages $8.8bn (4.4bn) comprised mainly of asset-backed securities, is the first London hedge fund to publicly admit getting caught up in the meltdown of the sub-prime mortgage sector in the US. The fund in question, MainSail II, includes loans granted to Americans with poor credit histories. It may be forced to sell assets after having to take out emergency bank loans because commercial lenders refused to provide it with the short-term cash that it needs to make investments.

Posted by ellipse @ 12:18 PM 0 Comments

It is clear from market action that nothing approaching calm has returned to credit markets.

Reuters: Even Fed may not save our bacon this time: James Saft

VENDEMIAN, France, August 21 (Reuters) - It will take considerably more than the Federal Reserve's cut in the discount rate, and its likely upcoming move to cut the Federal Funds rate, to pull the market's fat out of the fire. While the Fed was right to cut its discount rate by a half a percent and take other steps to improve liquidity, the factors that scared bankers and money market managers into hiding under their desks haven't gone away.

Posted by chris :-)) @ 12:02 PM 3 Comments

No SubPrime here - This is Britain where we do things in a proper manner!

Bloomberg: Bank of England Loaned Money at Penalty Interest Rate

The Bank of England said its emergency lending facility was tapped for the first time since the U.S. subprime mortgage crisis prompted other central banks to inject liquidity into financial markets. The U.K. central bank said it loaned 314 million pounds ($628 million) from its standing facility at 6.75 percent yesterday.

Posted by tyrellcorporation @ 11:31 AM 17 Comments

companies will be forced to sell $75 billion of debt backed by mortgages Commercial Paper Roils Borrowers With $550 Billion Coming Due

The $1.1 trillion market for commercial paper used to buy assets from mortgages to car loans has seized up just as more than half of that amount comes due in the next 90 days, according to the Federal Reserve. Unless they find new buyers, hundreds of hedge funds and home-loan companies will be forced to sell $75 billion of debt backed by mortgages, according to Zurich-based UBS AG, Europe's largest bank.

Posted by chris :-)) @ 10:48 AM 1 Comments

Don't crack open the champagne just yet

MoneyWeek: Is the credit storm passing?

The pundits are already dismissing recent market volatility as a storm in a teacup. But it's worth remembering that, unlike other recent financial crises, this one has its roots planted firmly in the 'real' economy.

Posted by mary @ 10:31 AM 11 Comments

22,000 acre strategic landbank !!!!!!

BBC News: Persimmon upbeat on house market

The most interesting bit of this story is the 22,000 acre landbank. How many flats/houses are being kept from being built by that? Sounds like several years worth of the govt's "celebrated" 250K homes per annum. The supply side will never be sorted until these landbanks are addressed.(Not that there is a supply shortage - check out the lack of rental increases) I wonder where the buyers will get their mortgages from to keep Persimmon flush over the next few quarters?

Posted by voiceofreason @ 10:28 AM 18 Comments

Strong Sterling that was short lived

Bloomberg: Pound Drops on Concern Credit Market Crisis Spreading to U.K.

The pound dropped against the dollar and the euro on concern the credit market crisis is spreading to Europe's second-biggest economy.

Posted by mrmickey @ 09:53 AM 1 Comments

Those job cuts are countrywide!

BBC: 'Job cuts' at US mortgage lender

Countrywide Financial, the biggest US mortgage firm, has begun laying off staff as it tries to weather the credit crunch, according to US media reports.

Posted by tyrellcorporation @ 09:13 AM 1 Comments

Quick! launch more helicopters!

BBC: US mortgage lender sells assets

US mortgage lender Thornburg has sold $20.5bn (10.3bn) of assets and reduced its borrowings amid a tough market for home loans.

Posted by tyrellcorporation @ 09:11 AM 0 Comments

Another Manufacturing Company Cutting Back

Birmingham Post: Chips are down for 120 workers at McCain factory in Staffs

Up to 120 jobs are to be axed from a frozen food plant in Staffordshire. McCain Foods announced yesterday that "local environmental constraints" at its site in Wombourne had made the production of chips uneconomical.I wonder what environmental constraints are or is it just that people are cutting back on frozen foods.

Posted by jj @ 08:27 AM 9 Comments

nobody wants to lend money anymore

CNN: Capital One and the mortgage domino effect

"A severe economic slowdown is unavoidable given the seizure we've had in the financial markets," says Tom LaMalfa, managing director of the mortgage research company Wholesale Access. "As providers become fewer, it will increase the cost of mortgage financing until you get to the point where no one can get a loan."

Posted by vfr @ 08:10 AM 5 Comments

You don't need a helicopter to distribute free money these days

Firstrung: The Feds rate cut: why the markets positive reaction could be short-lived

The markets are crashing. It seems that no one can save them now. But wait a minute, what's that up there in the sky? Is it a bird? Is it a plane? No - it's a helicopter, actually. And the man at the controls, US Federal Reserve chief Ben Bernanke, clearly hopes that by flooding the US financial system with enough dollars, he can prevent the whole credit bubble from collapsing.

Posted by converted lurker @ 07:07 AM 1 Comments

Needles in haystacks?

Firstrung: Investors seek opportunities from stock market volatilty

Last week was a turbulent time for anyone invested in markets, with the FTSE suffering its worst fall in four years on Thursday and then leaping back up again on Friday...However, Barclays Stockbrokers has continued to see investors spotting opportunities amongst the turmoil. Instead of rushing out of the markets, experienced investors are taking the opportunity to buy; on Friday 58% of orders executed by Barclays Stockbrokers were buys

Posted by converted lurker @ 07:05 AM 0 Comments

The US housing market downturn, spiking foreclosures and tightening credit - caused in part by banks and investors shunning mortgage-backed securities - have triggered a wave of problems for mortgage companies.

TELEGRAPH UK: Troubled US mortgagee in $25bn asset sale

THORNBURG Mortgage said overnight it had sold $US20.5 billion ($25 bilion) of assets as it seeks to weather the financial storm buffeting the troubled US housing industry

Posted by chris :-)) @ 02:57 AM 0 Comments

Monday, August 20, 2007

One to watch?

BBC: Mexico coast braces for hurricane

This hurricane is set to crash through Cantarell, a field that is already in decline, is one of the biggest in the world, and supplies the US with a few million barrels a day. It looks set to be shut down for 10 days at least, and there is an outside chance of a category 2 hurricane direct hit, which some rig's won't be designed for. If it does hit, we will see what a supply side shock looks like when oil futures are floating around $75/barrel and will see whether, before the peak of the hurricane season, if this has the potential to cause sustained higher prices. for up to the minute commentry.

Posted by planning4acrash @ 11:19 PM 13 Comments

This is a big deal," said James Wood, co-chair of the insurance practice at LeBoeuf, Lamb, Greene & MacRae in San Francisco. "We expect this to grow in terms of litigation."

Reuters: Subprime crisis heightens insurance claims: Marsh

NEW YORK, Aug 20 (Reuters) - Marsh Inc. the world's largest insurance broker and risk adviser, on Monday warned financial institutions they may face more claims as a result of the subprime mortgage crisis. Marsh, a unit of Marsh & McLennan Companies (MMC.N: Quote, Profile, Research), said in a statement that insurers, banks and rating agencies could face greater liability claims under directors and officers (D&O) and errors and omissions (E&O) policies

Posted by chris :-)) @ 10:15 PM 1 Comments

Some mazing debt and bad lending stats contained within article

Channel 4 News: Debts mount for young homeowners

Young people under 24 who contact debt charity the Consumer Credit Counselling Service (CCCS) and owned their own home owed an average of 20,290 through credit cards, loans and overdraft, compared with 12,113 among those who were still renting.

Posted by enuii @ 08:26 PM 57 Comments

Take the crunch as red ?

TheTimesOnline: Wall Street falls into the red once again

Dow Jones dips in New York despite Fed injecting further $3.5bn into banking system, FTSE 100 closes up 14.5 points. Another downturn after the terminal spasm on Friday.......

Posted by onyerhike @ 07:42 PM 0 Comments

"Their new attitude ensures, right now, that the crisis WILL spread. Let me tell you why". So they all knew it was a bubble, now?

"As the markets keep on going through turbulence, and many conflicting opinions are heard as to whether this is just a harbinger of things to come (my position) or just a "welcome correction" (still that of most "serious" pundits and the conventional wisdom), what's most striking to me - and very revealing on its own - is how suddenly everybody is talking about the real estate bubble as it if were the most obvious thing".

Posted by planning4acrash @ 07:40 PM 2 Comments

Even with supposed 'cooling' house prices are still going up by over 1k a month.

Sky: House Prices Edge Ahead By Just 0.6%

August's increase added around 1,473 to the value of a home, pushing average house prices up to 241,474.

Posted by david20040_0 @ 06:36 PM 16 Comments

Are London investors now becoming wary?

Money Week: London falls 'could signal property slump' experts at Rightmove believe things are changing. Commercial director Miles Shipside said: 'This fall is the first we have seen for some time and is an early warning signal that even the buoyant London economy is susceptible to market forces.' Rightmove believes the situation in the capital will be reflected across the rest of the country. Mr Shipside added: 'The fall was only slight, at just 0.1%, but has to be seen against the fact that London prices have risen by an average of 2% a month for the last 12 months.'

Posted by loneranger @ 04:27 PM 1 Comments

Told you...!

BBC News: UK sub-prime market tightens up

Article about the UK's sub-prime lenders running scared. Officially 10% of the UK market is 'sub-prime', although I believe the proportion of mortgages affected will be much greater.

Posted by uncle tom @ 04:08 PM 12 Comments

The latest data suggest that the European Central Bank may have underestimated the extent of the housing market slowdown, as well as its implications for future economic growth and interest rate decisions

ft: Housing market threatens to hit eurozone growth

Eurozone house price growth is slowing and threatening to act as a brake on the region's economies. Average house prices in the 13-country eurozone will rise by just 4.3 per cent this year - the slowest pace since the launch of the euro in 1999 - according to forecasts by Barclays Capital, the London-based finance house.

Posted by chris :-)) @ 03:24 PM 0 Comments

Worried banks will go bust?

The Guardian: 'Shares to fall further, banks will go bust'

Check out this article and also this guy has high credibility.

Posted by fimac @ 02:58 PM 0 Comments

Asset-backed commercial paper issuers, who borrow in the short-term debt market to invest in longer-dated assets such as mortgages and bonds, are struggling to find buyers as the fallout from the subprime crisis spreads Asset-Backed Commercial Paper Issuers Struggle to Find Buyers

Issuers of asset-backed commercial paper in Europe failed to find buyers for more than half the debt maturing today because of the U.S. subprime mortgage rout. About $2.5 billion of asset-backed commercial paper was sold out of the $6 billion that came due, said Saher Bin Jung, a commercial paper trader at Commerzbank AG in London.

Posted by chris :-)) @ 02:39 PM 0 Comments

How deep does this rabbit hole go?

CreditFlux: Australian councils facing CDO losses, reports Daily Telegraph

I don't know Dorothy, but buckle your seatbelt because Kansas is going bye bye. Along with most of the World Mortgage system.

Posted by lvmreader @ 02:26 PM 2 Comments

Don't worry about debt - we're all wealthier!

BBC News: Does a trillion pounds of debt matter?

"This wealth is held in houses, pensions, shares, bank and building society accounts, and it is held very unequally, with the rich holding most of the wealth, as well as most of the debt."

Posted by nearly30 @ 02:25 PM 8 Comments

Is that why they were bailed out by the ECB to the tune of 17.3BILLION Euro

CreditFlux: Sachsen LB says Ormond Quay has zero CDO exposure

The collapsed ABCP conduit run by Sachsen LB has no investments in CDOs and is invested solely in triple A structured finance assets, Thomson Financial reports the bank as saying. The conduit, called Ormond Quay, was last week bailed out by the German savings banks association, after it failed to roll over its commercial paper funding. The savings banks stepped in with a 17.3 billion credit facility.

Posted by lvmreader @ 02:25 PM 0 Comments

Errm, guys - this isn't a game. You HAVE to provide a market valuation

CreditFlux: Thai Banks refuse to mark-to-market CDO holdings?

The Bangkok Post today reports that Thai local banks are refusing to mark CDOs to market. The newspaper says the banks insist this is not necessary for accounting purposes, despite a directive earlier in the week from the Securities and Exchange Commission for local auditors to monitor whether CDO investments had been properly marked to market in their balance sheets.

Posted by lvmreader @ 02:23 PM 0 Comments

Gross mortgage lending is 13% higher than the 30.6 billion lent in July of last year.

Council of Mortgage Lenders: Mortgage Lending hits a new July, says CML

Mortgage lending remains robust dispite the five rises in the interest rates. Lending is on target to reach 360 billion by the end of the year.

Posted by v9p3j @ 12:42 PM 0 Comments

Unbiased BBC editors still insisting everything is fine in the UK

BBC "News": Mortgage lending still 'robust'

The BBC Property section editors, known for their unbiased, fearless and untiring dedication to quality, strictly factual reporting, have changed their source this time (no doubt because their usual cheerleaders aren't towing the official "everything's fine" line).

Posted by paul @ 12:16 PM 9 Comments

Countrywide starts laying off staff in move to weather a credit crunch - report

Forbes: Business News Article

Has the long anticipated slide into insolvency started? Business Week also think that it is being propped up at the moment and that this was the real reason for the cut in FED borfrowing criteria:

Posted by orwell @ 12:15 PM 0 Comments

Big fall in gross lending by building societies YoY

Firstrung: Interest rate rises cause gross mortgage lending to fall - BSA

Commenting on the mortgage figures, Adrian Coles, Director General of the BSA said:"This is a tale of the five interest rate rises in the last year feeding through to the market. The strong start to the year has fallen away, with gross lending in July representing an 8.7% decrease on gross advances a year before. As mortgage payments increase, household finances are likely to be squeezed further. Even if interest rates are near to their peak, potential borrowers need to think about all of their outgoings to make sure they do not overstretch themselves financially.

Posted by converted lurker @ 11:37 AM 3 Comments

London house prices falling

London Evening Standard: With even London prices falling, could this be the end of the homes boom?

Hold tight...the rollercoaster has hit the top of the ramp and we are looking down into the dip.

Posted by swisstoni @ 11:16 AM 1 Comments

Top Swiss banker sees the Emperor in his new clothes

Daily Telegraph: Top Swiss banker attacks US lending standards as 'unbelievable'

The only person to speak the truth regarding the reality of the situation. Note the comments: Stockmarket historian David Schwartz warned investors not be fooled by signs of recovery. "The truth is no-one knows how serious the financial problem in the US is, nor how it will unfold. We do know central banks are scared out of their minds," he said. Also, "In Germany, the state bank SachsenLB admitted that it had received a 17.3bn bail-out after its investment arm Ormond Quai racked up huge losses on US sub-prime debt. It had previously denied holding direct exposure to sub-prime."

Posted by swisstoni @ 11:14 AM 1 Comments

Four major events will occur by 2010 that could have a devastating effect on your wealth

Moneyweek: BRITAIN: 2010

Entertaining article about the demise of the economy - not sure how factual any of this is given that they are trying to sell their advice but entertaining nonetheless!

Posted by jeremy @ 10:57 AM 2 Comments

Builders starting to down tools?

Firstrung: House building starts fall by 8% year on year to 169,000 - DCLG

Starts in most regions show falls from highs during the last two years. Most regions have maintained upward trends in completions, except for falls from recent high levels in the North West and the South East. The North East, Yorkshire and the Humber, East of England and South West currently show their highest levels of completions over the ten year period since 1996-07.

Posted by converted lurker @ 10:26 AM 2 Comments

Now London House Prices Fall

It costs money to buy a house

Guardian: Young homebuyers pile up debt

CCCS chairman Malcolm Hurlston said: "There is a danger in young people getting on the housing ladder before they are ready financially." "Before taking out a mortgage the under 25s should make sure they can still afford to live and not rely on credit to plug the gaps."

Posted by night @ 09:09 AM 7 Comments

Conspicuous by their absence but now safe for Economists to stick their neck out now. Prediction for outcome as well - bonus !

Telegraph: Sub-prime crisis is the edge of a financial hurricane

That combination, and Germany's initial uncompetitiveness, created booms in many other EMU countries. But, as in the US in the 1920 and again in the 1990s, inappropriate interest rates and temporarily booming growth totally distorted perceptions of today versus tomorrow. The result has been that firms and families in these countries have massively over-borrowed and banks and investors have massively over-lent, often on the illusory security of inflated house prices.

Posted by darren @ 08:55 AM 0 Comments

Surprising words of warning from the BBC

BBC: Market jitters and your pocket

Stock markets around the world have been in turmoil in recent days on fears that the crisis in the US housing market could undermine the global economy. There is more mention of the "troubled" mortgage market and irresponsible borrowing / lending further down the article.

Posted by george monsoon @ 08:34 AM 1 Comments

The top sources of extra stimulus to the world economy during the past two years have been the US, Spain (yes, Spain, the bubble king) and Britain, in that order. All three are debt addicts, running out of credit.

TELEGRAPH UK: Bernanke fears economy will hit a brick wall

Watch Japan, still top creditor by far. Growth slumped to 0.1pc in the second quarter. Retail prices have fallen five months in a row. The yen has snapped back 9pc against the euro and sterling this month, as funds playing the yen "carry trade" unwind speculative positions. The deflationary vice may now tighten hard.The total carry trade - where hedge funds to housewives chase yield across the world, much of it borrowed at near-zero rates in Tokyo - is now $1,200bn. It has been the super-fuel for the global asset boom. We had a taste of reversal last week. Liquidation pummelled New Zealand, South Africa, Brazil, Turkey, Iceland and indeed sterling. If and when rates come down in the West, yen reversal may accelerate and cause further havoc. Rate cuts may prove self-defeating at first

Posted by chris :-)) @ 08:15 AM 4 Comments

Fall in London house asking could signal easing across the country

The Times: Asking Prices in London Start to Fall

Asking prices for properties in London have fallen for the first time in a year, bringing hope that softer conditions in the capital could ease affordability pressures across the country. Rightmove, the property website, said that London asking prices, which had risen by around 2 per cent per month for the past year, fell by 0.1 per cent in the past month. The data suggested that sellers are adopting more realistic pricing expectations as purchasers struggle to cope with the impact of five rises in interest rates over the past year and mounting global economic uncertainty.

Posted by cash_buyer @ 07:21 AM 8 Comments

London house prices mirror cool August Rightmove reports fall in London asking prices

Britain's housing market has continued to cool during August, figures revealed today show, with prices in London actually falling for the first time in a year. Rightmove, the property website, said the average cost of a home in England and Wales - its figures exclude Scotland and Northern Ireland - has risen by just 0.6 per cent to 241,474 over the past month, though the annual housing market inflation rate is still running at 12.6 per cent. However, the average figure obscured a dip of 0.1 per cent in house prices in London over the past month, Rightmove said. Prices also fell by 2.2 per cent in the West Midlands and by 0.6 per cent in the north of England.

Posted by cash_buyer @ 07:19 AM 0 Comments

Asking prices start to fall in London

Daily Mail: With even London prices falling, could this be the end of the homes boom?

Asking prices for homes in London - seen as the engine of the property market across the country - have fallen for the first time in a year. Five interest rate rises in the last 12 months are also cooling the market in other parts of the country, including the West Midlands, the North of England and the South-West. At the same time, there has been a fall in the number of new homes coming onto the market, which could be a result of the introduction of Home Information Packs.

Posted by cash_buyer @ 07:16 AM 0 Comments

The uncertainty has again stoked worries that China may not be doing enough to cooperate with the outside world when it comes to diseases. In 2002 and 2003, the Chinese government initially tried to cover up the outbreak of severe acute respiratory syndro

wallstreetjournal: Pig Virus Leaves Doctors Skeptical About Beijing

But some animal-health experts, both within and outside China, wonder whether the Chinese research team has the right diagnosis. Since blue-ear disease usually doesn't kill adult pigs, "it's very, very strange for us," says Juan Lubroth, head of infectious diseases at the United Nation's Food and Agriculture Organization. "For the Chinese to say this is the responsible agent for this killer virus, I think it could be a component" of a mix of pathogens, perhaps including a bacterial agent, a different virus or a combination of the two.

Posted by chris :-)) @ 02:31 AM 3 Comments

Sunday, August 19, 2007

Over the last two weeks, this slowly building wave became a tsunami in the global financial markets.

nytimes: How Missed Signs Contributed to a Mortgage Meltdown

So in October, as mortgage-backed bonds were still flying high, he bet $10 million that these bonds would plunge in value, using complex derivatives available to any institutional investor. As his gamble began to pay off in the first months of 2007, Mr. Melcher, a money manager based in New York, plowed the profits into ever bigger wagers that the mortgage crisis would worsen further, eventually risking some $60 million of the funds money

Posted by chris :-)) @ 11:38 PM 0 Comments

Mr Smith - the financial establishment - at his hustling best.

Sunday Times: Swallows in the air

David Smith understands the rules of the game.
The finance establishment can lend themselves into a frenzy, then when it all goes t*** up, they can rely on their pals in the central banks to bail them out.
Count "Economists" as part of the establishment.
Message is clear. Only mugs (like us) work normal jobs earning money. The smart guys (finance industry) hustle for it.

Posted by voiceofreason @ 08:43 PM 4 Comments

Huge increase in debt recovery

The Times: Debt collectors workload triples

"THE amount of debt passed to collection agencies has tripled in the past six years to 21 billion, with more than 20m individual cases being handled in the past year alone." And so Bad Debt Britain continues trying to run away from its obligations.

Posted by jeremiah @ 02:56 PM 0 Comments

Rate cut didn't help.

BBC: Market turmoil 'set to continue'

What are the consequences of a FED rate cut. More liquidity in the market which leads to inflated prices for all assets.

Posted by deepak @ 01:58 PM 15 Comments

This says it all

FT: Your Money

FT money yesterday said it all. Mortgage rates on the way up without the BoE needing to do anything. The race to cash, might lots of City investment properties be flooding back onto the market very soon? Rent a room to keep your head above water - where are all of these extra tenants going to come from - existing BTLs?

Posted by crash1 @ 12:51 PM 0 Comments

Mortgage fraud in UK

Sunday Times: Home loan fraud hits UK

Chickens coming home to roost! Widespread fraud on mortgage applications is being investigated by the police around London. 11 people arrested already. And we dont have a sub-prime problem! We can expect more of this story in near future.

Posted by flapjack @ 11:57 AM 1 Comments

Nothing left for a rainy day

Firstrung: Britons living on the edge with one in four adults having no savings

Almost one in four Brits (23%) have no savings set aside for a rainy day - and parents with young children are those most likely to be living on the edge - according to new research from Combined Insurance... "Over the last two years, our community research has revealed that many Brits can see the cost of living going up, yet an alarming number have no savings at all. The longstanding rule of thumb that people should have three months salary in savings has gone out the window as many people are simply living from hand to mouth. The nation is living on the edge"

Posted by converted lurker @ 11:15 AM 13 Comments

That's sparked concern among customers of Countrywide Bank, the company's banking business. People jammed the phone lines and Web site of the bank on Thursday and crowded into branches to pull out their savings, the Los Angeles Times reported on Friday.

market watch: Countrywide Hopes To Avert Run On Its Bank

"Earlier in the day, there were rumors of a run on the bank," said Erin Swanson, an equity analyst at Morningstar. Countrywide's statement "was an effort to calm fears and settle things down."

Posted by chris :-)) @ 10:46 AM 0 Comments

The man with a crystal ball

Wall Street Journal: In Time of Tumult, Obscure Economist Gains Currency

The recent market turmoil is rocking investors around the globe. But it is raising the stock of one person: a little-known economist whose views have suddenly become very popular.

Posted by mike haywood @ 08:15 AM 0 Comments

Get out the thermals !

The Telegraph Online: Business fears over 'Big Chill'

"There have been several corrections recently but this one is different: this time there is a reason for it and it's a pretty significant one.".

Posted by onyerhike @ 08:13 AM 0 Comments

Saturday, August 18, 2007

The London bubble seen from across the pond

Bloomberg Markets (Sept 07): Gazumping London

VIs ~ "No broker has fed the frenzy like London-based Foxtons, which has helped drive up prices and, in the process, its own commissions, by inflating home valuations, wooing buyers and sellers--and pushing agents to close, close, close".

Posted by alan @ 09:55 PM 0 Comments

Turning off the tap

FT: Banks get tough on subprime mortgages

Homebuyers will face higher interest rates and tougher tests for a mortgage if they have a poor credit history, as banks tighten their lending rules in the face of the global credit crunch.

Posted by anon @ 08:48 PM 0 Comments

Why no march for affordable housing??

BBC News: March against flood-plain housing

I find it strange that people can organise a march against building on flood plains but yet we cant organise a march for building more houses...

Posted by delboypass @ 08:43 PM 0 Comments

Let's try to look on the bright side.. please let's..!

Telegraph: Chaos that may just bring stability to the banks' lending rates.

Note the change in tense:- "So, now they are slowly coming to terms with the fact that an almost unprecedented era of cheap borrowing - for both companies and individuals - has come to an end."

Posted by bidin'matime @ 08:24 PM 7 Comments

Sub-Prime spreads to EU - How long for problems to surface here

MercoPress: Sub-prime quake: EU will review credit rating industry

The European Commission is planning to review the credit rating industry after suggestions the sector was too slow to warn on the US sub-prime loans crisis, according to The Financial Times. With the weakness in the sub-prime mortgage market sparking fears of a global credit squeeze, Brussels will probe the industry's voluntary code. This code aimed to stop any conflict of interest over the fact credit agencies can be paid by the firms they rule on.

Posted by pixel8r @ 03:02 PM 0 Comments

Bad news for American economy?

Guardian: We're not out of the woods

Is that it then? Crisis over, hedge funds happy again, and normal service restored in stock markets? Don't count on it just yet.

Posted by quiet guy @ 01:43 PM 0 Comments

Lenders will pass on higher charges as a result of the credit crunch

Financial Times: Business News Article

Looks bad for Northern Rock's customers and those with BTL mortgages. Apparently it will soon find out if they are sub prime borrowers. Oh and by the way David Smith thinks that highly leveraged BTL's as second (or more) mortgages are not Sub Prime. David (as you have banned us all from your blog), your comments on this ?

Posted by orwell @ 11:29 AM 0 Comments

The tides have turned!

Guardian: Those who say this is just a market wobble are in denial

Larry Elliott's excellent summary of the current global situation. Great reading for those of us who struggle to understand some of the lingo.

Posted by deadman @ 11:10 AM 0 Comments

can't even hide the poisons in the mud

Firstrung: "No bids for UK sub-prime mortgage securitised paper" - Victoria Mortgages

Victoria Mortgages has repriced its entire mortgage product range, with near-prime products rising by 1.25% and sub-prime products going up by 2.5%...The lender cites the global liquidity 'crunch' of the last few weeks has now created a position, "where there is effectively no bid for UK sub-prime mortgage securitised paper".

Posted by converted lurker @ 10:41 AM 3 Comments

Why asset prices are just thin air and are now worthless

larouchepub (via Bull Not Bull .com: Panic in the air as finacial system implodes

The Fed caved in and reduced its lending rate and flooded the place with cash to bail out Countrywide et al. Big mistake. Fear has set in and no amount of cash is going to change sentiment in the market - just look at Nikeii down 5% on Friday. Greenspan the villain all along! It really is going to be a grreat show next week...

Posted by the capitalist @ 09:11 AM 0 Comments

Friday, August 17, 2007


Times: Home pack extension sparks fears of slump

Will HIP's be the convenient media scapegoat/excuse for any downward adjustment of the property market.

Posted by enuii @ 11:24 PM 5 Comments

Government Job Creation Scheme Extended

Telegraph: HIPs extended to cover three-bedroom homes

HIP Infection Spreads to Smaller Properties as government entends the non-job, borrowed money employment sector in the UK.

Posted by enuii @ 08:53 PM 1 Comments

Coming to a country near you - the Implode-o-Meter

The Mortgage Lender: Implode-o-Meter

Quote of the Week: "Conventional thinking has it that had the Fed only created $5 billion and filled the hole in bank capital, the [Great Depression] could have been avoided. But the issue at the time wasn't, as conventional monetary economists believe today, the few billions necessary to recapitalize the banking system - but the ongoing tens of billions that would be required to sustain unsustainable Credit Bubble-induced inflated asset prices, inflated corporate profits, inflated earnings, and myriad worsening economic maladjustments."

Posted by uncle chris @ 08:49 PM 4 Comments

No Bs In This

CNN: The escape of the enablers

read it then think why are they such sh**s, the governments I mean...

Posted by mark @ 08:03 PM 3 Comments

How can prices crash if the Fed keeps bailing the Stock Markets out? European stocks boosted by US bank move

London's FTSE 100 index was boosted today after the US central bank announced that it was cutting the interest rate at which it lends cash to banks

Posted by david20040_0 @ 06:50 PM 40 Comments

Crash? Fed recovers and prices still booming.

Mail: Property price boom in university towns

Property investors are piling into university towns - sending house prices soaring by up to four times the rate in the rest of the country.

Posted by david20040_0 @ 06:49 PM 13 Comments

News from the dark side!

Landlord Expert: Analysts say house prices coming under pressure

An investment bank, who on their home page pride themselves on questioning convention.

Posted by sickboy @ 04:39 PM 1 Comments

You Got To Know When To Hold Em And Know When To Fold Em

ft: Yen carry trade

The speed of this unwinding has been staggering. That underlines the extent to which speculative investors have been funding activities via low-yielding currencies. The Swiss franc has also rallied. Given that Japanese savers are unlikely to forgo the superior incomes generated overseas, at least in the short term, it is fair to say that hedge funds are responsible for the most of the moves so far.

Posted by dispondent housewife @ 03:29 PM 0 Comments

Anxious customers jammed the phone lines and website of Countrywide Bank and crowded its branch offices to pull out their savings because of concerns about the financial problems of the mortgage lender that owns the bank

la times: A rush to pull out cash

Bill Ashmore drove his Porsche Cayenne to Countrywide's Laguna Niguel office and waited half an hour to cash out $500,000, which he then wired to an account at Bank of America.The rush to withdraw money -- by depositors that included a former Los Angeles Kings star hockey player and an executive of a rival home-loan company -- came a day after fears arose that Countrywide Financial could file for bankruptcy protection because of a worsening credit crunch stemming from the sub-prime mortgage meltdown

Posted by chris :-)) @ 02:20 PM 3 Comments

fears the worsening credit environment could drag on growth

Reuters: Spanish fund limits withdrawals

MADRID, Aug 16 (Reuters) - Spanish fund March Monetario Dinamico has limited withdrawals for its around 3,000 investors due to knock-on effects from the world-wide credit squeeze, a Banca March spokesman said on Thursday. The limitation on withdrawals from the 250 million-euro ($337 million) fund of funds is due to the freezing of BNP Paribas fund Parvest Dynamic ABS, Banca March said in a statement to the Spanish stock market

Posted by jose @ 02:02 PM 0 Comments

Emergency cut in the Fed's discount rates

The Times: Fed cuts the discount rate by 0.5% to 5.75%

"The US Federal reserve today cut the rate at which banks lend to each after it said the credit crunch posed a threat to growth" What's that noise I hear? Is it sirens and klaxons and "ABANDON SHIP!"?

Posted by jeremiah @ 01:37 PM 2 Comments

Can you say Moral Hazard?

Bloomberg: Fed Cuts Discount Rate to 5.75 Percent to Ease Credit Crunch

The speculator's best friend has just stepped in to pull their bacon from the fire. Say goodbye to the value of the dollar.

Posted by richc @ 01:36 PM 37 Comments

Best way to lose a fortune ...

Times Online: To bid or not to bid: the lure of the auction

It seems that the Times has got wise to what's been going on for years ... No auctions are not the best place for first time buyers. 1) FTB's will always get caught out. 2) "Potential" owner-occupiers will always be too ambitious. 3) Amateurs are always nieve about value/work/legals/etc. "A recent survey for Standard Life Bank found that 98 per cent of buyers thought they would save money by buying at auction but less than half would pay for a survey. Yet buyers who fail to do their research risk being unable to secure a mortgage." "No lender will give you a mortgage for more than the property is worth. If you dont have the cash available to complete within 28 days, you will lose the 10 per cent deposit.

Posted by fahrenheit451 @ 12:55 PM 0 Comments

Here she goes again............

Times: Latest : London back into red after Asian plunge

Blue chips fail to hold on to early rally today as investors in Asian investors give Japan its worst day since the dot-com boom

Posted by sovietuk @ 11:56 AM 1 Comments

Hopefully this will create another flood of properties into the market

BBC: Hips extended to three-bed homes

The government has said it will extended its Home Information Pack scheme (Hips) to cover three-bedroom homes from 10 September, 2007.

Posted by tyrellcorporation @ 11:40 AM 5 Comments

Gold mining stocks down 23pc - correcting nicely

Safe Haven: Silver and Gold Update

For anyone who wants to preserve their savings when the world's central banks start slashing IRs later this year, gold stocks are a good, if not the only option. Don't buy just yet, but after this 20-25% crash has bottomed. GBP will fall quite sharply over the next year or 2. There is no point buying a house until 2010-2011 anyway - we all know that in our hearts. I am hoping that gold will peak (somewhere near the stratosphere) when HPC bottoms around 2011-2012 then its off to buy that Huf House in the Cotswolds and retire.

Posted by sold 2 rent 1 @ 10:31 AM 3 Comments

Slip, Sliding away.....

BBC: Shaky start to European trading

European markets had a mixed start to trading on Friday, following heavy falls on Asian stock markets. The interesting bits are near the bottom of the article "US shares were helped by rumours that Bear Stearns, which is heavily exposed to the mortgage sector, could get funding from a Chinese bank. There was talk that the Federal Reserve could cut interest rates to help support the troubled housing market."

Posted by george monsoon @ 09:49 AM 9 Comments

25 years on and back to square one ...

Firstrung: Lenders should introduce a three-year review for borrowers with interest-only mortgages

Non-repayment mortgages now make up around a quarter of all new mortgages and with lenders continuing to do whatever it takes to reel in growing numbers of customers, it's clear that many borrowers willing to take on more debt could be heading towards financial ruin. Funding for new cars, expensive holidays and the latest gadgets has to come from somewhere and worrying about repaying a mortgage due in 25 years is simply not on the radar for many spenders.

Posted by uncle chris @ 08:54 AM 3 Comments

And you thought it was just the UK economy built on debt? Japan market tumbles 5.4%

Japans benchmark Nikkei share index fell on Friday at its fastest pace since the September 2001 terrorist attacks, as a morning slide in share prices turned into an afternoon rout. The Nikkei 225 slumped 5.4 per cent to 15,273.68, depressed by slides of 10 per cent and more in some export-focused sectors.

Posted by uncle chris @ 08:43 AM 2 Comments

If hedge funds were a country, it would be the eighth-biggest on the planet. They can sink whole economies, and have the potential to crash the entire global financial system. Yet they are beyond regulation. We should be very afraid

statesman: Sell-out: Why hedge funds will destroy the world

Inside the hedge: a day in the life 45am: I am in front of my multiple screens at our St James's-based offices after a Tube ride from north London, beating the rush hour and allowing me to read up on news and concentrate on the ordre du jour.By 8am, when all European markets open, the phones stop ringing for about 45 minutes. This is when we decide what we'll do for the morning, trading-wise, until the US market opens or corporate and economic data feeds through. Today's story is that AMD is bidding for ATI in the US - great news if you hold European semiconductor stocks in Europe and Asia like me. The bad news is that Bank of Cyprus has pulled its counterbid for Emporiki Bank after a thumbs-down from Central Bank of Cyprus. I'd been building a position in Emporiki in the hope that Crde

Posted by chris :-)) @ 07:48 AM 3 Comments

The yen carry trade a cheap money borrowing ploy that may have financed investment in global risk assets worth hundreds of billions of pounds is in danger of imploding.

TELEGRAPH UK: Yen carry trade faces implosion as investors sell shares to return cash

The yen carry trade a cheap money borrowing ploy that may have financed investment in global risk assets worth hundreds of billions of pounds is in danger of imploding. Currency experts said that yesterdays acute rise in the yen, particularly against sterling, the euro and the New Zealand and Australian dollars, was an absolute signal that the yen carry trade was unwinding a consequence of the equity market turmoil spilling out from Americas sub-prime lending crisis. The yen carry trade the practice of cheaply borrowing yen to finance investments across the globe is thought by some to be the core of the massive worldwide liquidity pool that is now contracting so violently.

Posted by chris :-)) @ 07:42 AM 2 Comments

Sliding pound and imported goods will fuel domestic inflation

The Telegraph: Investors shun sterling as credit implodes

"I'm afraid this may be worse than the 1998 sell-off because we're right at the top of the cycle, tipping down the hill. The only question is how fast we go down. This time the world no longer has imported disinflation from China, so it's harder for central banks to cut rates," he said.

Posted by in the delhi @ 06:37 AM 6 Comments

Made in the USA (not China) is a good thing in retailing today

business week: Given the recent spate of more recalls on products made in China, now may be the time to start promoting a Made in the USA message.

Remember the pet food scare? And the tainted seafood? And the contaminated toothpaste? Other products also include unstable hammock stands, kids jewelry with lead paint in it and more. I'm not trying to sound the alarm bell - you can find products coming from other countries that are dangerous. However, according to an article on, products from China were recalled twice as often as those of other countries.

Posted by worried mother @ 06:04 AM 5 Comments

Thursday, August 16, 2007

Landlord Association predicts the top of the market?

Landlord Expert: UK property market should stand firm despite stock market decline

OK so I know it's not his work, but as he does not talk to us anymore I thought I would share this gem. "If you look back to the stock market crash of 1987, the housing market remained strong and continued to be so into 1988." Right then I'm off to get a 6x IO mortgage to buy a Chelsea broom cupboard if that's the case.

Posted by crash bandicoot @ 10:42 PM 4 Comments

Oh Dear.. and the beat goes on.

Bloomberg: Countrywide Taps $11.5 Billion Credit Line From Banks (Update5)

Countrywide turned to the emergency loan, which it said was provided by a group of 40 banks, a day after Merrill Lynch & Co. raised the prospect of bankruptcy for the Calabasas, California- based lender.

Posted by steve dee @ 09:36 PM 1 Comments

Knives are out for the Rock

Telegraph: Profit warning fears hit Northern Rock

Northern Rock seems to be a huge contradiction to press releases from the usual VI suspects. We are led to believe that the property market in the main looks reasonable bouyant but Northern Rock at present looks to be suffering. Currently it is now the most shorted banking stock in the sector and most analysts are selling its shares. However, Northern Rock are not alone with Bradford & Bingley, the buy-to-let specialist also taking heavy loses.

Posted by denzil @ 09:21 PM 1 Comments

Xmas shopping anyone???

The Telegraph Online: Don't buy yet, shares will get cheaper

After this morning's market mayhem the FTSE 100 is now down about 13pc from its recent six year high in mid-July - a big fall but don't panic, this is not the end of the western world.However, neither is it time to rush out and blow your cash on shares because they look cheap - they're going to get cheaper. The headlines are going to get worse before they get better......Until our debt fears are allayed, and I believe that won't be until Christmas, markets will remain in the red.

Posted by onyerhike @ 07:58 PM 1 Comments

Yeah, you're all screwed now baby.

BBC News: Heavy losses sweep world markets

OK, finally the BBC admits that their is a problem with no mention of a possible bounce back. Let's take bets on when they realise the house prices are reliant on what is causing the problems and will affect the UK too. Me I give the BBC etc 3 months to thread it all together.

Posted by symo @ 05:45 PM 2 Comments

Is Just Me Or Does Anyone Else Smell BS?

Reuters: A&L says 8.25 percent the tipping point for homeowners

The Alliance & Leicester says there's nothing to worry about at current base rates they would say that wouldn't they.

Posted by gcj @ 05:42 PM 1 Comments

This does not make sense to anyone with an IQ over 50

BBC website: Will house prices keep on rising?

The writer of this piece says that building more houses will not solve the housing crisis, but more BTL will. "...3 million new houses by 2020 is not in fact enough ..." "... And that means rapidly growing the rental sector..." Er.. hello ? I'd have thought that even the BBC could work out that you still need to build a house before you let it !!

Posted by voiceofreason @ 05:21 PM 5 Comments

Finally an Insight into how bad the current market is?

Money Marketing: Worst Banking Crisis in Decades

Leading Investment Manager has liquid the portfolio in favour of CASH. Abolished gearing and is waiting for the market to reach bottom when major casulties have come to BUY.

Posted by moley20 @ 04:53 PM 0 Comments

Here we go, here we go, here we go, here we we go

the guardian: Markets fall sharply

"What we are witnessing is a rapid unwinding of risk on a global scale," said Martin Slaney, head of spread betting at GFT Global Markets. "Even traditional safe havens such as gold are deemed too risky in this climate," he added. "In these extremely nervous market conditions, economic fundamentals have gone out of the window, and panic selling has set in."

Posted by yes @ 04:36 PM 0 Comments

countrywide begs for money, chairman cashes in shares!!!

CNN: Countrywide forced to turn to banks for help

This is almost criminal, this has to be read to be believed........cut the money to them, let him re-invest his share money back into it....

Posted by mark @ 04:17 PM 1 Comments

CountryWide borrows 11.4 billion dollars from 40 banks!

Houston Chronicle: Business News

Well whoever would have thought this would happen. Tell me are they any relation to Country wide in the UK?

Posted by orwell @ 03:20 PM 0 Comments

Ouch !

Bloomberg: Moody's cuts Countrywide to lowest investment grade

Moody's Investors Service has cut its debt rating for Countrywide Financial Corp. to the lowest rung of investment-grade and said it may cut again

Posted by alan @ 02:58 PM 0 Comments

His loss of $1.6 billion of investors' money is the biggest hedge fund collapse this year.

Larson's sudden fall has left investors, colleagues, and friends wondering how a prudent Midwesterner from River Falls, Wis. (population, 14,000), -- who came East and starred as a highly paid investment manager for Harvard University until he launched Sowood three years ago -- could have miscalculated so badly.

Posted by chris :-)) @ 12:47 PM 4 Comments

When the game is over, lots of players are left holding small losses instead of one player holding a big one.

economist: The game is up

During two exceedingly prosperous decades, that theory seemed to work just fine. But the swings in almost all financial markets this month have made dispersed risk suddenly morph into dispersed mistrust. The uncertainty has been magnified by the way that bad risks have become so hard to value. Investors have bought asset-backed securities that use shaky subprime mortgages in America as collateral, but as defaults have risen, the value of that collateral has tumbled.

Posted by chris :-)) @ 12:42 PM 3 Comments

German bank heading for trouble ?

BBC: Greenspan gets Deutsche Bank role

Former US Federal Reserve chairman Alan Greenspan has taken on the role of senior adviser to Deutsche Bank's investment banking unit. After all as GWB would say "he done a real good job"

Posted by holding out @ 12:16 PM 5 Comments

Cheap money propping things up again! - Is it too late?!?!

Bloomberg: Fed Has Already Introduced `Temporary' Easing:

The U.S. Federal Reserve has already introduced a ``temporary'' reduction in interest rates by driving the four-week Treasury bill below the Fed funds target, says Charles Diebel, a strategist at Nomura International in London. ``It is clear that a `temporary' easing has been put in place by the Fed,'' Diebel wrote in a research note today. ``This is what has really spooked markets overnight.''

Posted by tyrellcorporation @ 12:07 PM 13 Comments


Bloomberg: Coventree Seeks $729 Million of Emergency Funding

Coventree Inc., Canada's biggest non- bank issuer of asset-backed commercial paper, is seeking an additional C$790 million ($729 million) of emergency funds after failing to sell any notes yesterday.

Posted by tyrellcorporation @ 12:05 PM 5 Comments

Found a New Swish Dez-Rez for only 6,000

BBC News: Luxury tents for Glastonbury fans

Well I can imagine it now, this is "Tent City Milton Keynes 2008", "Watch out for the smaller suburb of tents over there, you might get robbed" , "But if you want something off of a back of a lorry, thats the place to go unfortunately." "As for planning permission, well, the Mayor is now my new next door neighbour"...

Posted by steve dee @ 11:41 AM 0 Comments

A bearish view of the housing market - it's all going to crash

MSN: Why house prices are going to crash

Nothing new in terms of what is said, but saying it on the front page of MSN right now is news.

Posted by othello @ 11:17 AM 2 Comments

Turn $35 into $100,000 in 37 years

Safe Haven: Lessons from History: The Simple Path to Resource Riches

Great graph.

My strategy. Gold until it peaks around 2012 and then into Indian and Chinese stocks.

The Chinese savings ratio is around 30% and their economy is investment-led.

After the coming crash in Chinese/Indian/emerging economies stocks they will recover and their economies will turn into consumer-led ones that are debt propelled (like ours did in the 1980's).

Posted by sold 2 rent 1 @ 10:51 AM 3 Comments

Some analysts see these cases as a taste of more to come. Some dealers may have put bad loans into these conduits as a way to offload them to investors, said Graham Fishers Rosner. When investors wake up to this fact, they may be reluctant to buy ABCP, l Trouble is mounting in the $2.2 trillion commercial paper market, and further deterioration could trigger problems for banks that would rival what theyve suffered from the subprime crisis

Many investors and dealers downplay the extent of potential problems in the $1.15 trillion asset-backed commercial paper market. The type of commercial paper that is struggling, known as extendible ABCP, makes up a relatively small portion of the total. The Canadian ABCP market is also relatively tiny, and plays by different rules than the U.S. market. Some of the biggest dealers in asset-backed commercial paper include Citigroup, Goldman Sachs Group Inc., Lehman Brothers Holdings Inc. and Merrill Lynch & Co. Inc.

Posted by chris :-)) @ 10:47 AM 0 Comments

Time to sniff out complicity and fraud? Rating agencies hit by subprime probe

The European Commission is to investigate credit ratings agencies amid growing dismay over their slow response to the subprime mortgage crisis. Officials in Brussels, and many other critics, believe the ratings agencies failed to act quickly enough to warn investors about the risks of investing in securities backed by US subprime mortgages the sector whose troubles triggered the recent global market volatility. "A lot of money has been lost and we want to know who gets the can of woopass opened on them" ;)

Posted by dohousescrashinthewoods @ 09:44 AM 7 Comments

FTSE nosedives and breaches 6000 mark

FT: European shares suffer heavy falls at open

European equity markets suffered sharp falls this morning with the FTSE dropping 2% soon after opening. Of note Northern Rock which relies heavily on the wholesale money market for financing fell another 6% today in addition to the 5% it lost yesterday. Overall Northern Rock is down 40% since the start of this year

Posted by denzil @ 09:03 AM 31 Comments

Sydney house prices fall

Sydney Morning Herald: Prices fall, but no joy for renters

When will they start calling it a house price crash? Sydney's average house prices fell 5.7 per cent in the last quarter. Some areas, like the upmarket Eastern suburb of Woollahra, have dropped by 18.8 percent since last year! Australia has been buoyed by a resources boom and low unemployment in recent years yet house prices are falling. Interest rates aren't that much higher than in the UK, with a base rate of 6.5 per cent yet repossessions are up. Perhaps this is what is in store for the ridiculously inflated UK housing market?

Posted by koala bear @ 08:48 AM 7 Comments

Sub-prime crisis engulfs 'jumbo' lenders

The Daily Telegraph: Business News

How long before either Northern Rock or Countrywide or both go under?

Posted by orwell @ 08:38 AM 0 Comments

The Yen carry trade starts to "implode"

The Times: Markets plunge around the world

"The sudden demise of the yen-carry trade, said dealers, is massively exacerbating the prevailing turmoil on global markets. The panic-stricken flight from equity risk, said one Nomura broker, is producing dangerous chaos on currency markets." Dum de dum de dum - looks like chanting "but it's different this time" may not actually have been able to change basic economics

Posted by jeremiah @ 08:30 AM 1 Comments

Banks left with Endemol debt as syndication is postponed

The Times: Business News

125 billion of deals are unstuck waiting on bank's balance sheets to be sold now...

Posted by orwell @ 08:28 AM 0 Comments

Do Stock up now on Candy Bars & Baked Beans now?

Bloomberg: Nestle Shares Surge on Profit Increase, Buyback Plan (Update7)

I wonder how much these products will be selling for on eBay next year. At least the supermarket has the beans & sausages on special at the moment.

Posted by steve dee @ 07:21 AM 0 Comments

This thing is more contagious than "Bird Flu"

Bloomberg: Global Stocks, High-Yield Currencies Tumble on Credit Crunch

Aug. 16 (Bloomberg) -- Asian stocks plunged the most in a year and the New Zealand dollar had the biggest drop since the 1987 stock market crash as investors fled high-risk assets because of a deepening global credit squeeze.

Posted by steve dee @ 07:17 AM 0 Comments

Don't Panic!! Mr Mainwaring - It's only a blip...

BBC News: (Close): Japanese shares closed down as concerns about global credit conditions - driven by problems in the US mortgage sector - continue to worry investors.

Imagine a Tsunami following an earthquake.. you know it is coming. Do you stay watch in awe? Or do you look for relative safety Or are you one of the poor souls who are completely oblivious to what is going to happen. I've heard this situation being described as "indigestion", Welll I think they really need to see a Doctor to get a second opinion. Rennie's won't help, but a pair pampers maybe more practical.

Posted by steve dee @ 07:05 AM 0 Comments

More evidence of a k-winter

The Telegraph: Hedge funds take more than a trim

"On the down side, when the markets turn swiftly and erratically, with little basis to historical performance, things can go badly wrong"

We are entering into a new era. Maybe the historical data that these systems use didn't include what happened in 1929-1933. DJIA 3000 by 2012. We have never seen a credit crunch with debt levels this high - EVER. This is the biggest bubble in history bursting.

Posted by sold 2 rent 1 @ 06:33 AM 8 Comments

'Iceberg' begins to reveal its self

BBC news: Top US lender 'risks bankruptcy'

Merill Lynch warn of problems for top US lender Countrywide Financial, Its analyst Kenneth Bruce states the obvious: "If liquidations occur in a weak market, then it is possible for Countrywide to go bankrupt."

Posted by ticktock @ 06:15 AM 0 Comments

The Guardan: Buyers scared off housing market

Guardian Newspaper: Buyers scared off housing market

Buyers are shying away from the housing market with demand in July declining at the fastest pace for three years, in another sign that five interest rate rises in a year are squeezing borrowers' pockets.

Posted by eric pebble @ 03:08 AM 0 Comments

The head of a currency management group at one bank confirmed that he had corporate clients, whom he would not name, engaged in the carry trade, and he added that he did not think it was the smartest of maneuvers for companies. The carry trade is a very

financial: Corporate coffers exposed to yen-trade reversal

Corporate coffers exposed to yen-trade reversal Merrills Bernstein sees signs of potential bomb in U.S. balance sheets The Yen carry trade, which by some estimates could have $1 trillion tied up in it, appears poised to be the next market taken down by the credit meltdown. And corporations may be unexpectedand directvictims of a collapse to the extent they try to act like day-traders with a portion of their cash balance but are late to the game

Posted by chris :-)) @ 02:07 AM 0 Comments

A dramatic surge in the Japanese yen over recent days has cut off a key source of liquidity for the global asset boom, setting off a panic flight from emerging markets for the first time since the latest turmoil began.

Telegraph: Yen surges as carry trade unwinds

The Yen Trade begins to unwind, liquidity diminished. Soon, interest rates and the cost of credit will be irrelevant due to shortages.

Posted by planning4acrash @ 12:58 AM 2 Comments

Wednesday, August 15, 2007

Dow and Nasdaq end lower for fifth straight session on revived worries about credit and mortgage market, and talk of more trouble for Countrywide Financial.

CNN: Dow hits 4-month low

1. Rich said yesterday..."If you thought Tuesday in the markets was bad, just wait until Wednesday, when all those who have been exhorted to "hang together," and not request Sept. 30 redemption of their hedge fund investments, quietly file their requests anyway -- hoping the other guy didn't Thursday should be equally bad, as the impact of all that is absorbed". -- Right on matey!! David, I'm afraid that we'll have to wait an iccle longer than Wednesday for this to settle down!

Posted by planning4acrash @ 11:56 PM 0 Comments

Forget about HPC for the time being. More importantly is your CASH safe?

Market Watch: Only panic is left

"Worry about banks (all of them)" - more commentary on the impending credit crunch and some prudent advice on how to minimise your financial exposure to the possible evaporation of liquidity.

Posted by humptydumpty @ 11:39 PM 0 Comments

First Gulf storm of the season.

Caribbean Net News: Tropical Storm Dean heads towards Caribbean

With oil at $70/barrel, a category 3 hurricane in the Gulf will be bad news. 100 oil workers already being evacuated, this is one to watch.

Posted by planning4acrash @ 11:34 PM 3 Comments

Bonds gain on continued credit fears

london stock exchange: AFX UK Focus Story

Signs that credit concerns were multiplying sent markets into a tizzy, wizzy lets get busy

Posted by god @ 11:11 PM 0 Comments

How Solid is the Rock?

FT dot com: Northern Rock acts on funding fears

Northern Rock suffering from low B of E base rates which largely determine the pricing of mortgages, have not risen in line with wholesale funding costs. This highlights how little control the B of E / Gordon Brown ultimately has with its interest rate tool.

Posted by enuii @ 09:55 PM 3 Comments

You pay for what you get ! It's called inflation

BBC News: "Brand China" at risk after toy recall

From a 5,000-strong workforce, only a few remain. The loss here has been considerable, but the damage to China's reputation may be just as grave.

Posted by cheeky charlie @ 09:12 PM 2 Comments

Countrywide tumbles 19% on financing rumors

CNN Money: Countrywide tumbles 19% on financing rumors

Looks like contrywide in the states maybe unable to finance itself... If this isn't a big early scalp, I'm a dutchman!

Posted by ck one @ 08:58 PM 3 Comments

Countrywide Faces Bankruptcy Prospect

Bloomberg: Countrywide Falls; Merrill Cites Bankruptcy Prospect

`Effective insolvency'' would result should creditors force Countrywide to sell assets at depressed prices or investors lose confidence in its ability to raise cash, Kenneth Bruce, a Merrill analyst in San Francisco, said in a research note today.

Posted by jj @ 08:27 PM 0 Comments

The plot thickens...

CNN: Homebuilders' confidence at 16-year low

"Builders see subprime mortgage woes spreading with no sign of a turnaround until 2008 at earliest for battered new-home market." Interesting times ahead if this strain of flu reaches the UK...

Posted by einstein @ 08:17 PM 0 Comments

Northern Rock Tumbles 9% , Credit Worries is the UK now !!

Reuters: Credit market worries batter Northern Rock

Northern Rock tumbled over 9 percent to hit a 3-year low on Wednesday as fresh signs of credit market deterioration sparked concern over its earnings and speculation it could issue a fresh profit warning. The mortgage bank, which raises most of the funds for mortgage lending in the wholesale credit markets, said in June that profit growth would slow this year due to the impact on its borrowing costs of the five UK rate rises in the past year.Credit jitters on Wednesday prompted more worries over the impact of the liquidity crunch on banks like Northern Rock, which are hit by a rising cost of funds and the narrowing margin between this and what they earn on loans.

Posted by jj @ 07:20 PM 0 Comments

How the US Subprime fiasco came about

FT: Ratings agencies reap more of what they sowed

Amazing practices! "In 2000 ratings agencies said that a type of mortgage that involves a piggyback, where borrowers simultaneously take out a second loan for the down payment, was no more likely to default than a standard mortgage,

Posted by leoz @ 05:58 PM 1 Comments

Call off the party

BBC News: Markets settle down after storm

After spending the first half of the day watching the FTSE and Dow go negative, they're now looking far healthier. Darn.

Posted by disillusioned @ 04:42 PM 1 Comments

77% Drop in profits at Macys!!! - that's quite a big number.

BBC: US slowdown hits Macy's profits

Iconic US department store chain Macy's has become the latest retailer to warn of flagging demand from customers. It said profits in the three months to 4 August fell by 77% on the same period a year ago, to $74m (37.1m), in "a more challenging economic environment".

Posted by tyrellcorporation @ 03:51 PM 4 Comments

Will house prices go up or down in the next 12 months?

Daily Mail: Will house prices go up or down in the next 12 months?

Poll vote currently 43% Down 57% Up

Posted by doomwatch @ 02:38 PM 16 Comments

Bring on the crash!! oh, wait a second...oops

Bloomberg: U.S. MBA's Mortgage Applications Index Rose 3.4% Last Week

Aug. 15 (Bloomberg) -- Mortgage applications gained 3.4 percent last week to the highest level in almost three months, showing there is still demand to buy homes.

Posted by benstar @ 01:38 PM 0 Comments

Wow! a discovery

MSN: Why the property market is heading for a nasty fall

The importance of this MSN article is that it says the same thing as this website has said for the past 18 months. Imitaion is flattery!

Posted by alan @ 12:25 PM 2 Comments

London next!

Belfast Telegraph: Ulster property prices in 8% fall

The Royal Institution of Chartered Surveyors (RICS) and Ulster Bank housing survey showed 7% of surveyors recorded house prices falling by as much as 8%. The latest findings confirmed fears expressed by local estate agents in the Belfast Telegraph last week, who claimed there has been a summer slump. They said house prices had dropped by up to 7% in July but at that stage it was just anecdotal.

Posted by cash_buyer @ 12:04 PM 4 Comments

Interest Rates

Money Week: Has the inflation monster been slain already?

Money Week's view of the current UK inflation rate/base rates situation.

Posted by gcj @ 11:25 AM 5 Comments

Real estate job prospect summary Guest comment: Still plenty of mileage in real estate banking jobs

An short piece on job prospects in the real estate industry. The article concludes that "Despite the prospect of an impending correction in the UK real estate market, the outlook from a jobs perspective remains positive."

Posted by pie @ 11:03 AM 0 Comments

Because inflation is so low LOL!

BBC News: Bank voted 9-0 to hold UK rates

It appears the MPC think that what is going on is a mere blip. Plus that inflation news is great too! Can someone please tell where to buy the rose tinted specs I see those MPC guys wearing.

Posted by symo @ 10:45 AM 22 Comments

Housing boom coming to an end

BBC News: Housing boom 'coming to an end'

Scotland's housing price boom is coming to an end, experts have predicted. If the cracks are showing in Scotland now, how's it going to look come the end of the year when the effects of the last few interest rates have shaken down?

Posted by bunnykins @ 10:37 AM 4 Comments

But unlike ordinary markets that you and I are familiar with, this giant casino is not just about betting on a price that goes up or down. It's about betting on virtually every quirk and intricacy of nearly every investment under the sun.

marketoracle.: Global Financial System in Jeopardy

Back in 1998, that's almost what happened: Russia defaulted on its debts. A major hedge fund, Long Term Capital Management, collapsed. Banks recoiled in horror. Stock and bond markets nosedived. And the world's financial system was perilously close to the brink. That was nine years ago. Nine months ago, in our November 2006 Safe Money Report, we laid out a scenario of how this was likely to happen again and in a bigger way. We explained how a mortgage market collapse would lead to a credit crunch, and how a credit crunch could threaten the financial system.

Posted by chris :-)) @ 10:24 AM 5 Comments

Large-scale redemptions may prompt big sell-offs;

ft: Risks of being unprepared for redemptions were shown by investors in structured credit in May and June.

Hedge funds prepare for mass redemptions For anyone worried hedge funds could spark another market crisis, Wednesday is a red letter day: the final chance for investors to put in demands for their money back by the end of September at many funds using standard redemption terms needing 45 days notice.By Thursday, hedge funds with these terms will know exactly how much cash they must find to repay shareholders; cash they are likely to find by selling their investments. Large-scale redemptions may prompt big sell-offs; something BNP Paribas analysts say could cause irrational markets

Posted by chris :-)) @ 09:50 AM 0 Comments

Coming here? Business comment: Indicators come no clearer than stealing to survive

Love the quote "the liberation of goods by the financially challenged" Does bad economy lead to falling house prices or does falling house prices lead to a bad economy?

Posted by ds_t @ 09:04 AM 3 Comments

This is really starting to hurt

BBC: Woes continue among global stocks

FTSE is tanking and it may drop below 6000 by the end of day.... That would be a drop of over 700 points since July..

Posted by george monsoon @ 08:35 AM 25 Comments

slowdown in Europe, Japan and US

The Telegraph: ECB rate-rise doubts as global economy slows

The twin slowdown in Europe and Japan leaves the world increasingly vulnerable as the US economy slides into a deeper property slump than expected. China is still growing at a blistering pace but is a net drain on global demand since import growth is flat while exports surge.

The k-winter is not far away now.

Posted by sold 2 rent 1 @ 07:44 AM 1 Comments

Don't cry hurray yet, David

The Telegraph: Inflation dip eases pressure on Bank to raise interest rates

Inflation my be down but it may come back later this year

Much more important though is the slowing economy, high debt levels, falling real incomes, falling GBP, and falling stocks.

The road to recession (and in my view depression) is looking clear now.

Posted by sold 2 rent 1 @ 07:40 AM 8 Comments

Scotland's looking good!

Scotsman: Signs that Scottish property boom is ending as prices slip

According to Lloyds TSB Scotland Scottish House Price Monitor some places in Scotland are showing price drops of up to 10%. Some parts did show increase in prices but "there is clear evidence that the Scottish house price boom is ending."

Posted by kev @ 06:11 AM 1 Comments

wheel out the ol' "housing shortage" explanation

The Times: Shortage alters buy-to-let logic

Same old mantra.... it's a housing shortage ... "Nonetheless, in the UK, by contrast with much of the rest of Europe, property inflation has tended to outpace retail price inflation by a couple of percentage points. This is because one of the obstacles to a healthy economy continues to work in the favour of the buy-to-let investor: the housing shortage." Really ? Then why aren't rents going up then ?

Posted by voiceofreason @ 05:49 AM 4 Comments

founder of Aussie Home Loans, John Symond, said rates could rise by up to 0.25 percentage points, doubling the Reserve's interest rate rise of last week, because of the tighter credit market. That rise pushed up monthly repayments on a typical $300,000 mo

AUSTRALIAN: Credit squeeze to push rates higher

Commonwealth Bank chief Ralph Norris concedes that interest rates could rise for hundreds of thousands of mortgages - regardless of official increases by the Reserve Bank - because lenders are struggling with a global credit squeeze caused by the crisis in the US housing market. Mr Norris says there may well be some increase in interest rates as a result of the US subprime mortgage crisis for all Australian lenders.

Posted by chris :-)) @ 04:22 AM 0 Comments

"There is clear evidence that the Scottish house price boom is ending"

Scotsman: Signs that Scottish property boom is ending as prices slip

They're telling us about a report from Lloyds TSB: "In the three months to July 2007, property values in Glasgow and Aberdeen dropped by 1.2 per cent and 1.4 per cent respectively, compared with the previous quarter." This is the most downbeat report on Scottish house prices I've seen so far. Usually there's a spokesman from one estate agent or another explaining that the market's levelling off a bit, but that we can continue to expect modest growth; however, in this article all of the quotes appear to acknowledge that the party's over.

Posted by scunnered @ 12:55 AM 0 Comments

A sign of the times - 'higly leveraged' mortgages

Guardian: Homeowners breathe a sigh of relief

Interest rates may not rise by 0.25% after all and there are 'sighs of relief' all round. Are we so highly strung out in debt that this headline makes any sense? If so, surely we are vulnerable.

Posted by quiet guy @ 12:55 AM 0 Comments

RAMS sought to deflect the impact of the credit squeeze by saying that it has no actual exposure to the subprime market and all of its own loans were 100 per cent insured.

smh: The roof caves in on RAMS

NEWLY listed home loans group RAMS could take a hit of up to 15 per cent on its next round of net profits, having been engulfed by the financial contagion sweeping US debt markets. Analysts indicated yesterday that, under a worst case scenario, RAMS's forecast after-tax earnings of $58.6 million for this financial year could fall by between $5.8 million and $8.8 million if the higher costs of borrowing money to underwrite its mortgage offerings feeds through to its bottom line.

Posted by chris :-)) @ 12:14 AM 0 Comments

Tuesday, August 14, 2007

Japanese Housewives Will Be Cashing In The Winnings Forex Carry Trade Unwinds Nearly 6 Percent, History Says it May Go Further

Carry Trade Rout Grows Larger by Historical Standards -- The widely popular forex carry trade has recently fallen from previous heights, forcing sizeable drawdowns in portfolios that held long-carry positions. Going long the three highest-yielding G10 currencies and short the three lowest-yielders produced a 5.7 percent decline in a matter of 20 days. Viewed from a historical standpoint, this is the fourth largest drawdown since the inception of the Euro

Posted by chris :-)) @ 11:27 PM 0 Comments

A house price nightmare

Guardian: A house price nightmare

The current mortgage crisis in the US was exacerbated - and at least partly caused - by restrictive town planning policies.

Posted by david20040_0 @ 11:26 PM 7 Comments

Americans Running out of Grocery Money

The Times: If the Americans stop shopping, then panic

Very interesting article revealing that Wal-Mart sales are up 14 per cent which is a worrying sign suggesting that a surge of Americans are seeking low prices because they are so worried about their weekly shopping money that they can no longer afford to go to their regular, fancier supermarket. The feelgood factor of a rising housing market has gone. Existing home sales are down 12 per cent. The average time homes spend on the market is 8.7 months, the highest level in 15 years.

Posted by enuii @ 11:25 PM 4 Comments

Dow sinks 207 amid credit and consumer concerns.

CNN: Wall Street's terrible Tuesday

They just keep a fallin.

Posted by planning4acrash @ 11:22 PM 1 Comments

The politics and economics of a credit crunch.

The Oil Drum - Canada: The Resurgence of Risk A Primer on the Developing Credit Crunch

Interesting, very long read! Which gives an overview of where we are and how we got there, suggesting, counter-intuitively for the sheeple, but spot on for HPC people, that governments aren't scared by inflation, but freaked out by deflation, but keep talking about inflation because they would't get away with it given that their remit to voters is to ensure that inflation does not deflate people's standard of living.

Posted by planning4acrash @ 10:40 PM 5 Comments

Citi Confidential: $3 Billion of Credit Damage? Citigroup May Lose Profit on Debt Rout, Analyst Says

Citigroup Inc., the biggest U.S. bank by assets, may forfeit as much as $1 billion of third-quarter profit because of the credit crunch in mortgages and high-yield debt, according to analysts at Sanford C. Bernstein & Co. LLC.

Posted by chris :-)) @ 10:19 PM 0 Comments

experts talk about IR and why they will continue to rise

msn: what next for interest rates?

The slide in inflation was driven primarily by food prices, which look set to rebound later in the year due to recent floods. Furniture also had a large impact - but the record monthly decrease in July, as sales kicked in, followed a record monthly rise in June. Petrol prices and energy bills were another factor, but with oil prices remaining high, these cant be relied on to continue declining. So you could argue that these effects are effectively temporary downward blips.

Posted by sold out @ 09:11 PM 9 Comments

subprime fears wont go away

reuters: ftse down 1.2 pct as credit fears return

The FTSE 100 ended down 75.5 points, or 1.2 percent, at 6,143.5 after a choppy session in which European shares oscillated between higher and lower ground in yet another day of high volatility in global markets. The benchmark index has lost 2.6 percent week-to-date due to a renewed bout of worries over the health of credit markets.

Posted by sold out @ 08:46 PM 1 Comments

Stock sell off accelerates

CNN: Business News

DOW is tanking, FTSE to follow.....................

Posted by orwell @ 07:49 PM 0 Comments

Footsie loses heart as Wall St woes continue

Guardian: Business News

Deepak was nearly right when he said 100 points yesterday. I thought it might dive yesterday, but it rose 3% so I can eat humble... However, I think it may be level (ish) tomorrow and then dive Thursday/Friday. What are the current views? By the way, where have all the contributors gone from David Smith's blog? I always found them interesting even if only to consider how wrong they were!

Posted by orwell @ 06:31 PM 3 Comments

40% drop in Sub Prime

Mortgage Strategy: 40% drop in Sub Prime

Edeus chief executive Michael Bolton has predicted a 40% drop in sub-prime volumes across the board over the next 12 months and thinks there could be even worse to come. Mortgages PLC - which is wholly owned by Merrill Lynch - also confirmed today that within the next seven days its fixed rates will increase by a minimum of 0.75%, with some higher risk products increasing by greater than 1%.

Posted by moley20 @ 05:46 PM 0 Comments

US stocks fall on renewed jitters

BBC: US stocks fall on renewed jitters

US stocks have fallen in early trading, with problems in the mortgage sector continuing to have an adverse effect on market sentiment.

Posted by david20040_0 @ 05:30 PM 18 Comments

History: Germany 1923 - So the printing presses ran, and once they began to run, they were hard to stop.

Commanding Heights: The German Hyperinflation 1923

In interesting article about Germany 1923, everyone who was in a position of authority to try and do something were basically in denial. In life, we all need to face up to problems, not deny them. The longer you leave it, the worse it usually gets.

Posted by steve dee @ 05:27 PM 4 Comments

More lambs to the slaughter?

Telegraph: Buy-to-let mortgages smash records

Landlords have taken out a record number of buy-to-let mortgages, despite the well-flagged slowdown in the property market, according to latest figures from the Council of Mortgage Lenders. The CML said by the end of June the number of buy-to-let loans outstanding had reached an all-time high of almost 940,000. The value of the outstanding mortgages has reached 108bn - another record - and an increase of 14pc on the second half of 2006.

Posted by uncle chris @ 04:20 PM 19 Comments

Credit Crisis: they said "no problem" back in July

Bloomberg: Citi May Lose $3 Billion in Debt Rout, Bernstein Says

Citigroup Inc., the biggest U.S. bank by assets, may lose as much as $3 billion in the third quarter because of the credit crisis, according to analysts at Sanford C. Bernstein & Co. LLC

Posted by alan @ 02:26 PM 0 Comments

The one question you must never ask an economist

Times: News Article

A few questions for our guru on his site (if he didn't ban us blogging on it): Why does he keep getting his economics wrong?

Posted by orwell @ 02:23 PM 3 Comments

This is how the scam is financed

Inthenews: Top-up fees push up student debt

Student debt levels at English universities have risen by a quarter in the last year thanks to the introduction of top-up fees, a new survey suggests. The study also finds average projected debt on graduation has broken the 20,000 barrier at nine universities. So along with unaffordable housing and no pension you now get sh**fted to the tune of 20K if you want to be educated.

Posted by sovietuk @ 01:04 PM 4 Comments

Why the end of cheap money is going to hurt

MoneyWeek: The $300 billion dollar reason why you should be careful

$300bn of subprime debt is still lurking in the market, though no-one knows exactly where. Meanwhile, Goldman Sachs may have set a precendent with its $2bn bail-out of one of its troubled funds. Bankers may be trying to reassure us that the strength of the 'real economy' means this is just a blip - but, as John Stepek says, the UK economy is built on cheap debt.

Posted by mary @ 11:25 AM 4 Comments

Volatility or stability?

Financial Times: UK inflation falls below BoE target

"The main contributor to the slowing of inflation was falling food prices sparked by a supermarket price war" Adam Cole at RBC Capital Markets, said that it was probable that some of the effect of lower food prices would be reversed in August, but nevertheless the rate hike that looked like a near certainty after the [the Bank of Englands August] Report now looks more questionable. This will indeed give Doves a branch for a few months, but still 6% by Christmas, 6.25% by Feb March 2008, me thinks. I have a stinking suspicion that this leap and change could be a dramatic entrance of volatility, imagine if CPI went up 0.5%! Sales at furniture shops also helped curtail inflation, with discounts available on kitchens, bedroom and lounge furniture (Symptom of a housing downturn?

Posted by planning4acrash @ 10:56 AM 14 Comments

History: Life is unfortunately a cycle - Will it happen again? 1929 & 2007 Wall Street Crash of 1929

I read this article with interest and it is fascinating how similar things are today as they were 77 years ago. The Roaring Twenties was fueled by increased industrialization and new technologies, such as the radio and the automobile. Air flight was also becoming widespread, as well. The economy benefited greatly from the new life changing technologies.

Posted by steve dee @ 10:21 AM 6 Comments

BIG NEWS! - Does anyone believe these figures anymore?!?

Bloomberg: U.K. Inflation Unexpectedly Slows Below BOE Target

The stitch-up is going well for the BOE!!! The U.K.'s inflation rate unexpectedly dropped by the most in five years to settle below the Bank of England's target, weakening the case for further interest-rate increases. Consumer prices rose 1.9 percent from a year earlier, the least since March 2006, the Office for National Statistics said today in London. The reading compares with June's result of 2.4 percent and the 2.3 percent median forecast of 33 economists in a Bloomberg News survey. Prices dropped 0.6 percent on the month, the most since January.

Posted by tyrellcorporation @ 09:51 AM 48 Comments

UK July inflation falls to 1.9%

BBC News: UK July inflation falls to 1.9%

The UK's rate of inflation slowed to 1.9% in July, well below analysts' forecasts. The cost of living measured by the Consumer Price Index dropped sharply from June's level of 2.4%, helped by a supermarket price war. It is the first time UK inflation has fallen below the government's target of 2% since March 2006. The Retail Price Index, another inflation measure, fell to 3.8% in July from 4.4% the previous month

Posted by delboypass @ 09:51 AM 0 Comments

Credit crunch? That was last week's news, move on, now, back onto the Oil snap, crackle and pop.

TheOilDrum-Europe: Oilwatch Monthly - August 2007

Forced sales of oil will unwind and Oil WILL shoot back up, sending inflation and IR's to the Moon.

Posted by planning4acrash @ 09:19 AM 2 Comments

The recovery was very short lived...!

the Beeb: Stocks mixed as jitters continue

Asian stocks were mixed in Tuesday trading, as worries continue over the impact the downturn in the US mortgage market may have on the global economy.

Posted by george monsoon @ 09:17 AM 0 Comments

Slowly but surely...

Bloomberg: U.K. July House Price Expectations Lowest Since 2005

It seems that even in super-prime central London things are now regarded as being at a standstill by ESTATE AGENTS! Unreal. Anyway, seems that the asset price bubble is bursting. Equities looking soft again today and I'm pretty sure there'll be some more horrible news regarding fund redemptions/sub-prime/fund bailouts in the coming days too.

Posted by stoatgobbler @ 09:04 AM 0 Comments

More UK Manufacturing going to the Wall !!

Guardian: Sale of ICI will lead to British job losses

The Sale of ICI will result in job losses. Yet more UK Industry going to foreign climes. Will there be any industry left in the UK in the next few years. Ittruly is a sad day for british industry.

Posted by jj @ 08:54 AM 0 Comments

I remember many people telling me this was

New York Times: In a Credit Crisis, Large Mortgages Grow Costly

At the heart of the contagion problem is the combination of complexity and leverage. The securities that financed the rapid expansion of mortgage lending were hard to understand, and some of those who owned them had borrowed so much that even a small drop in value put pressure on them to raise cash. You find surprising linkages that you never would have expected, What matters is who owns what, who is under pressure to sell, and what else do they own, he said. People with mortgage securities found they could not sell them, and so they sold other things. If you cant sell what you want to sell, he said, you sell what you can sell.

Posted by lvmreader @ 08:07 AM 0 Comments

Credit Contagion Baby

New York Times: Pack Mentality Among Hedge Funds Fuels Market Volatility

On Wall Street, there is a rage against the machine. Skip to next paragraph Many Wall Street analysts attribute the fluctuations in the stock market to computer models used by hedge funds. Hedge funds with computer-driven or quantitative investment strategies have been recording significant losses this month. The managers of these funds are the products of the trading desks of the big investment banks, like Goldman Sachs and Morgan Stanley, both of which have investment operations that use computer models.

Posted by lvmreader @ 08:01 AM 1 Comments

'Market weakens further'

BBC News: First-time buyer demand 'drops'

The number of people looking to buy a house for the first time has fallen at its fastest rate in more than three years, a report says.

Posted by sold 2 rent 1 @ 06:44 AM 18 Comments

The Telegraph is slightly confused today.

Telegraph Talk: Inflation dip eases pressure on Bank to raise interest rates

The article states one positive factor, slightly lower CPI, concludes that IR's will not rise, then goes to summarise all the pipeline inflationary pressures that are heading our way. The conclusion does not match the analysis, so, a goodish article, rediculous title and conclusion. If inflation goes down to just 2.3%, then we may well be needing 6.25% rates soon, because, as the article mentions, higher energy costs are now starting to feed through, just as last autumn's energy price deflation starts to fall from the stats. Anybody reckon inflation could start to rise again by mid autumn? I certainly think its a distinct possibility.

Posted by planning4acrash @ 01:33 AM 1 Comments

FTBs can't and won't pay more...

Yahoo: First-time buyer numbers drop

The number of people looking to buy a new home fell at its fastest pace for three years during July as consumers speculated that the market may have peaked, figures show. The Royal Institution of Chartered Surveyors (RICS) said inquires from new buyers dropped at the fastest rate since August 2004 last month, while the number of unsold properties on surveyors' books rose to the highest level since the beginning of the year.

Posted by bearfaced-chic @ 12:41 AM 0 Comments

Monday, August 13, 2007

US Sub-prime mortgages - consumer effects

Business Week: US Homeowners in Crisis

Aug. 11 2007 - We talk to a homeowner on the brink of losing her house, and ask some experts for tips on how you can prevent your own foreclosure. Our market gurus talk about the wild stock swings and how the subprime crisis is affecting investors.

Posted by pdp @ 09:43 PM 0 Comments

2004 report - 3 Years on are we feeling the ripple

BBC News: Self-cert mortgages could skew market

Could you believe that a bank would invite customers to defraud it? It may sound incredible, but that is what some of Britain's biggest mortgage lenders have in effect been doing.

Posted by pdp @ 09:36 PM 0 Comments

Overpriced property caused the US housing crisis. Not Subprime!

The American Prospect: Tell Ben Stein, IT AIN'T SUBPRIME

Dean Baker (Ph.D in economics) disagrees with NYT columnist Ben Stein over the subprime debate. Dean says subprime hasn't caused the US housing problem, but blames overpriced housing. Subprimers are merely the first casualties of the housing crash. He also reckons the sheeple (or chicken littles) are starting to get wise to the facts thus accelerating the situation.

Posted by eyeore @ 08:46 PM 0 Comments

Inflation data shows pressure may be easing

Guardian: Inflation data shows pressure may be easing

Prices of goods leaving the factory gate rose as expected last month, while firms saw a surprise fall in their costs, official data showed today. Input prices fell 0.5% on the month in July, the weakest rate since January despite City forecasts for a monthly gain of 0.7%, the Office for National Statistics said.

Posted by david20040_0 @ 08:40 PM 5 Comments

House prices blowing hot and cold

The Telegraph Online: House prices to suffer from market volatility

.......Nationwide warned last month that house prices will slow this year, alongside market expectations, higher interest rates and affordability issues. It revealed that prices had grown an average of just 0.1pc in July, the slowest rate of growth for 15 months. But I thought pices were storming ahead in June ????? Are BBC and Telegraph reporters living in the same country ???

Posted by onyerhike @ 07:28 PM 0 Comments

House price rises double in just one month

Mail: House price rises double in just one month

The housing market raced ahead during June with annual price growth running at its highest level for more than two years, Government figures showed today.

Posted by david20040_0 @ 05:48 PM 41 Comments

House prices arehardly going to crash if this is happening.

Mail: More than 8,000 Eastern Europeans arrive in Britain every day

More than 8,350 Eastern Europeans are arriving in Britain every day, official figures reveal. In the past year alone, an astonishing 3,050,000 people poured into the country from the former Eastern Bloc - an increase of 25 per cent in only 12 months.

Posted by david20040_0 @ 05:46 PM 20 Comments

Pressure is being applied

Bloomberg: Bernanke, Trichet Urged by Markets to Do Rates U-Turn

Traders are paring bets on imminent rate increases in Europe and Japan, and some even speculate the Federal Reserve may execute an emergency cut

Posted by alan @ 05:01 PM 0 Comments

A problem, but still not a catastrophe

The Times: Comment

I like WRM, he is an old fashioned decent One Nation Tory.... What do you think?

Posted by orwell @ 04:22 PM 18 Comments

Fears grow that further interest rate rises will trigger a propertry crash Property price fears fuel increase in rentals

Rental demand is increasing according to ARLA and this is thought to be partly due to people fearing a property crash and hence holding off buying. According to Knight Frank rental instructions are 15% down as canny BTL investors are leaving the market and investing elsewhere. It looks like the rush to exit the BTL market is building momentum, despite possible rental increases.

Posted by othello @ 03:23 PM 4 Comments

Still rumbling Goldman injects $3bn into quant fund

After all the madness of last week, there are still rumblings. Could these guys be the next Bear Sterns? The question is, will: a) the market recover and the squall blow over; or b) head downhill from here; or c) dash for a peak and then crash. A group of investors led by Goldman Sachs said on Monday it plans to inject $3bn into the investment banks Global Equity Opportunities fund after it suffered heavy losses in last weeks global market turmoil. The move comes amid widespread speculation about broader losses in Goldmans asset management business, which operates some of the worlds largest hedge funds.

Posted by dohousescrashinthewoods @ 02:44 PM 4 Comments

Free Money In - Markets Up - Problem Over?

BBC: Global markets recover from falls

204 Billion Euro's Printed to Put In Equities? + 38 Billion $'s??? So the printer is working overtime and the markets are up. Problem solved. No HPC. & We can all get on with buying houses and HPI? I am gob smacked by how much money has been printed and now worried what effect this has on my savings.

Posted by waitingfor hpc @ 02:28 PM 40 Comments

An interesting read.. Five Time Bomb Investments to sell NOW!

These are tough times for investors. Because it's not the same world it was 5 years ago, one year ago, or even a few weeks ago. The reason is very simple. Markets move in great, long cycles. While we don't always know where we are in a particular cycle, the overall patterns are often remarkably clear. This is why the idea that you can just buy it and forget it - whether we're talking shares or property - is wrong. You'll only make real financial progress if you buy and forget it during an up-cycle. Get the timing wrong and your investment will go down... or nowhere.

Posted by soldinjuly! @ 02:25 PM 0 Comments

have repos

Firstrung: Repossession valuations up 62% year on year - e-surv

e.surv has revealed a significant rise in the request for repossession valuations during the last 12 months, with requests for 'post possession' valuations from lenders up 62% in July 2007 compared to July 2006... Richard Sexton, director of business development at e.surv: "This is a large rise, albeit from relatively low numbers. At present, we do not believe this will be a return to the early 90's and indeed with arrears beginning to fall, we may already have hit a peak.

Posted by converted lurker @ 01:52 PM 0 Comments

Flat Pack homes to the rescue!

The Argus: Ikea-style homes set for Sussex

"The scheme is emerging as a solution to the crisis in affordable and sustainable housing, with developers predicting a tenfold increase in the number of flat-pack homes within five years." Clearly this is the silver bullet we've all been waiting for ;-)

Posted by einstein @ 01:40 PM 0 Comments

One in 5 pensioners still has a mortgage

Guardian: Britain's pensioners are 57bn in debt

A lot of pensioners still have debt apparently. Although my heart isn't exactly bleeding for them, I bet manyhundreds of thousands in equity in their homes that they could be downsizing from. Various implications for long term mortgages & stuff as the article waffles on about etc

Posted by benedict @ 01:36 PM 2 Comments

Mayday in the UK?

MoneyWeek: Is Britain about to slide down the subprime slope?

As the US subprime mess is spilling into Europe, in the UK banks and other lenders foreclosed 14,000 properties in the first 6 months of 2007 - a worrying 30% jump over the same period in 2006 - according to the Council of Mortgage Lenders. And the bulk of the blame is attributed to increased subprime lending. But the problems for borrowers with bad debts could get worse...

Posted by mary @ 11:56 AM 14 Comments

Here it comes...FORCED SALES News: Debt forces quick sale nightmare

David Harber, National Homebuyers said: "The number of people contacting us because they are either in or are predicting financial difficulties has doubled since the beginning of this year. More people are uncomfortable with the state of the property market and homeowners want a fast way out. Our customer statistics are pretty shocking; however, it shows how the tide is turning on the traditional property market,

Posted by tinecu @ 11:54 AM 0 Comments

It's not just the young who have big debts - maybe this is worse as you can no-longer work to pay it off or rely on inheritance.

The Times: Pensioners saddled with debts of 57bn

"Pensioners are burdened with debts of 57 billion from mortgages and credit cards, new figures show. One fifth of retired people are still paying off a mortgage and a third owe an average of 5,900 on credit cards and loans, says Scottish Widows, the insurer. The 1.1 million pensioners who are still making repayments owe an average of 38,000 on their homes, compared with 35,000 last year. One in eight owes more than 50,000. In addition to these debts, almost 700,000 pensioners have children who are not financially independent. But only a third of these are schoolchildren."

Posted by catflap @ 11:47 AM 0 Comments

The feel BAD factor ..

BBC: Are you feeling bad enough yet?

The BBC never fail to impress and amuse all at the same time..

Posted by george monsoon @ 10:37 AM 3 Comments

HOW is this possible?!?!?!?!?!?!?!?!?!?!?!?!

BBC: House prices accelerate in June

UK house prices were 12.1% higher in June from a year earlier, according to the latest government figures. The rate of growth was higher than May's revised figure of 10.8%.

Posted by tyrellcorporation @ 10:19 AM 25 Comments

Credit crunch to continue into autumn

Cantos: Credit crunch to continue into autumn

The credit crunch will get worse before it improves, driven by liquidity issues says Jon Cunliffe. Rates may be cut in response to the developing crisis and opportunities will develop for investors as the yield curve steepens, he adds.

Posted by doomwatch @ 09:54 AM 1 Comments

Asking prices at uber-crash speed Confident sellers shrug off rate hikes.

Prices of homes on the market are rising at their fastest rate since Nov06 Asking Prices for homes in England and Wales are up 1.3% this month and are up 7.7% year-on-year (YoY). Greater London average Asking Price is now above 350,000 for the first time. Asking prices have risen in all Englands regions, Scotland and Wales since July.

Posted by tinecu @ 08:59 AM 8 Comments

Chinese inflation soared to a 10-year high of 5.6% in July, led by a sharp increase in food prices.

BBC News: China inflation hits 10-year high

A little reminder about why bankers will find it difficult to cut rates in response to recent volitility this time. This inflation WILL be exported, particularly when interest rates have to rise and the Yuan begins to appreciate and loose its dollar peg. We import too much from China to not be effected.

Posted by planning4acrash @ 07:44 AM 1 Comments

Sunday, August 12, 2007

no more money left, tough s**t

CNN: Who can't get a mortgage now

this is likely to happen in UK, then what? crash crash crash.... Read the last bit about the lawyer on 200k.... thats the city screwed..

Posted by mark @ 08:39 PM 5 Comments

Houston, we appear to have a problem

Indie on Sunday: The boom generation wakes up to reality

Includes mention of

Posted by financial planner @ 11:53 AM 17 Comments

mmmm.. cheap mortages... i think not!

The Mail: Deutsche Bank pulls UK subprime loans

So money is drying up already and our sub prime bomb, (sorry no sub prime in uk), is still ticking......... wow more fun to come. The mail claims BOE ready to offer unlimited funds to banks at base rate - will this help. I need a more knowledgable person to explain what this cheap money can achieve and the consequences??

Posted by waitingfor hpc @ 09:51 AM 75 Comments

US loan crisis set to claim fresh victims

Observer: Business News Article

Oh dear. In view of the 10% poll lead Gordon, I would go to the polls in October... What was it Callaghan said about not being left at the aisle or something?

Posted by orwell @ 09:49 AM 1 Comments

I can hear that helicopter coming now .........

Telegraph: Rescue plan to stem market crisis

Can this work? Do the banks that caused this problem get the money for free? Why should we save banks and not other comapnies like AWD steel in this case? Seems wrong to me and is this not going to cause INFLATION????? Anybody have any answers?

Posted by waitingfor hpc @ 09:32 AM 3 Comments

Saturday, August 11, 2007

US housebuilding/ homeowning in crisis

Sunday Times: No homes for Yanks to go to

I expect a lot of builders are about to lose their shirts on the housing market and the obvious areas where things will go bad first, and worse, are the newly hip areas such as Bed-Stuy. Its a story that is being replicated across America. Millions of people are stuck in homes they thought were great investments and saddled with mortgages that look increasingly burdensome. Builders are left with half-developed plots that few people can afford.

Posted by veritas @ 11:44 PM 1 Comments

The property party is well and truely over and now it's a long walk home in the dark with a hangover

Sunday Telegraph: Why yet another rise in interest rates will slaughter us

"Share prices in freefall, slaughter in Surrey, flood damage costed in the billions, a slowing housing market and a subdued high street. And yet amid all this gloom there is talk of a sixth interest rate rise in 13 months. Is there anyone else out there who thinks that all this talk of rates soaring to 6 per cent - or beyond - is pretty scary?"

Posted by catflap @ 11:40 PM 5 Comments

Free Market my ass.

SirChartsALot: The Plunge Protection Team working Overtime

An overview of suspected intervention by the mythical "Plunge Protection Team" during the recent market turmoil.

Posted by ictoa @ 10:19 PM 0 Comments

Deutsche Bank pulls UK subprime loans

thisismoney: Deutsche Bank pulls UK subprime loans

Subprime selling only in the US? Now worries spreading to UK subprime Which institutions hold how much junk? When will they come clean Can't only be Deutsche Bank. BTL considered "not" subprime for now....

Posted by mken @ 08:31 PM 0 Comments

Something is happening in the credit markets.

TheOilDrum: Credit markets: 'Don't panic', they beg

"This is a credit crunch" Say the clever people from Oil Drum. As usual, they draw together masses of stats, put the present into context, and have a stupidly clever conversation about it.

Posted by planning4acrash @ 08:10 PM 1 Comments

What has been happening to the world's stock markets?

BBC Business News: Q&A: World stock market falls

Stock markets around the world have been falling sharply on fears of a credit crunch that could affect the financial sector. What is causing the fall, and how will it affect the ordinary individual?

Posted by jps @ 07:13 PM 0 Comments

Let's talk house prices for a change ...

Firstrung: House prices in Ireland fall by 8K in a year

National house prices in Ireland declined by 2.6% in the first six months of 2007 according to the latest edition of the permanent tsb / ESRI House Price Index. The index does not measure volume/activity in the market and it can be assumed that the current climate has resulted in a lower than normal level of activity, which means that actual sentiment is not fully reflected in the price trend at this early stage in the ongoing Irish housing market correction.

Posted by uncle chris @ 06:54 PM 10 Comments

"Nobody runs faster than a sophistcated banker who gets scared and the financial community is scared"

MSNBC: Mort Zuckerman: Credit Mess Measured

"When you have 5% or less equity in these things it is based on the assumption that home prices are going to continue to go up. That just simply doesn't exist. It's another bubble. A real estate bubble that created a financial bubble or the other way around. These bubbles are going to collapse and people are going to lose money and the next time they'll be a lot more cautious" "It's only when the tide goes out that you are going find out who is wearing a bathing suit and we don't know what the real exposures are at this stage of the game" "They don't know the value of the derivatives, they don't know the value of the paper, and they don't know the value of the assets behind the paper"

Posted by lvmreader @ 02:25 PM 5 Comments

Reminder of what was clear as day in Feb 2007

House Price Crash: Prepare for the failure of HBOS & similar

It is interesting to re-read back what we thought in February. Interest rates will now have to go up since we just "printed" another half a trillion of currency worldwide.

Posted by lvmreader @ 01:59 PM 1 Comments

Hpi slowed from 1% to 0.3% per month since Jan

Firstrung: House prices up 0.3% in July - the latest FT House Price Index

Even setting aside the spectacular 38.1% annual growth recorded for the City of London, where the number of residential homes is limited, the analysis still demonstrates that the headline figures for Greater London mask an acute contrast at the local level. Four boroughs of quite different character show increases of 20% or more on an annual basis whilst, at the other end of the spectrum, there are five boroughs with increases of 8.2% or less, i.e. well below the national average.

Posted by converted lurker @ 01:02 PM 0 Comments

IMF says its Manageable - Well Thats Alright Then

BBC News Online: IMF seeks to calm financial fears

Central banks around the world have moved to prop up markets by lending money to banks who might be in trouble while the IMF and others make soothing noises.

Posted by enuii @ 11:40 AM 9 Comments

Fear Fear Fear!!!!!!!!!!!!!

Telegraph: City hit by biggest crisis for a decade

Britain's golden economic era is facing its final days with financial markets suffering their worst crisis in a decade, analysts warned last night

Posted by cheeky charlie @ 10:55 AM 31 Comments

The lighter side of the US housing debacle

Investment Postcards: The lighter side of the US housing debacle

The US housing situation is turning out to be a nightmare of much worse proportions than was generally expected not so long ago. And, to reemphasize my viewpoint, it is still rather difficult to detect even the faintest ray of light at the end of the proverbial tunnel. But with all painful situations there is usually also a lighter, or humorous, side. For instance earlier today, when paging through one of my PowerPoint presentations of about a year ago, I came across an assortment of housing-related advertisements and cartoons that made me think back fondly (in a somewhat perverse way) of the bubble days. I am sharing some of these with you in the hope of bringing a smile to your face in this otherwise fairly grim hour.

Posted by prieur du plessis @ 10:01 AM 0 Comments

Alarm... Alarm... Alarm...

The Telegraph: City hit by biggest crisis for a decade

"Experts predicted that the turbulence could have knock-on effects for all British households, depressing the housing market, potentially pushing unemployment higher and plunging pension funds into deficit."

Posted by einstein @ 09:20 AM 0 Comments

Check this out, Dudes !

None: TheMorgage Lender Implode-o-meter

Tracking the housing finance breakdown: a saga of corruption, stupidity, and government complicity. Found this on a link from another site. Quite funny actually

Posted by onyerhike @ 09:19 AM 1 Comments

Oh, the beauty of hindsight

TheTimesOnline: In retrospect the crisis was inevitable

The definition of an Economist - someone who doesn't have a clue what is going to happen but is very good at giving reasons why it happened after the event. Q. What's the difference between an economist and an old guy with Alzheimer's? A. The economist is the one with the calculator.

Posted by onyerhike @ 09:10 AM 5 Comments

Edmund's view of things

The Telegraph Online: City hit by biggest crisis for a decade

Britain's golden economic era is facing its final days with financial markets suffering their worst crisis in a decade, analysts warned last night.On one of the worst days in recent stock market history almost 56 billion was wiped off the value of London's leading firms amid worldwide panic. Discuss.

Posted by onyerhike @ 08:24 AM 0 Comments

Nouriel tells it like it is...

Roubini Global Economics Monitor: Worse than LTCM: Not Just a Liquidity Crisis; Rather a Credit Crisis and Crunch

Today we do not have only a liquidity crisis like in 1998; we also have a insolvency/debt crisis among a variety of borrowers that overborrowed excessively during the boom phase of the latest Minsky credit bubble.

Posted by in the delhi @ 08:11 AM 0 Comments

Now subprime is on the house street - a US Bank warns it may not have enough cash

Agence France Presse: Washington Mutual warns on subprime pressures

US bank Washington Mutual warned that the subprime mortgage sector crisis is threatening its operations, in a document filed late Thursday with the SEC. Due to the conditions roiling the subprime sector, "the company's liquidity may be affected by an inability to access the capital markets or by unforeseen demands on cash. "This situation may arise due to circumstances beyond the company's control, such as a general market disruption," the bank said.

Posted by lvmreader @ 03:58 AM 8 Comments

"But investment in Blackstone wasn't just about returns, analysts say"

MarketWatch: Blackstone share slump costs China $540 million

Blackstone Group L.P.'s slumping share price isn't likely what Beijing had in mind when it pumped $3 billion into the leveraged buyout firm last month. Since its June debut Blackstone has tumbled 21%, making it the worst-performing initial public offering among deals worth $500 million or more this year. China, which bought a 10% stake in Blackstone at a 4.5% discount, has seen the value of its investment plunge 18% in 24 trading days. Those losses tally $540 million, averaging about $22.5 million each trading day.

Posted by lvmreader @ 03:47 AM 1 Comments

Apparently, Bear Stearns is risk averse Bear falls foul of hedge fund trap

Wait until this starts biting the high street banks. Kiss mortgage applications goodbye. The home builders and retail banks were on the end of the cheap money pipeline for far too lung.

Now it's over. It's so over

Posted by lvmreader @ 03:43 AM 0 Comments

I bet ClearChannel now wished they had taken the money

Bloomberg: Clear Channel May Get Buyout Offers of $18 Billion (Update5)

It may not be available now. Back in Nov 2006 - ah those were the times! One could turn up one's nose at a mere USD18.7billion as too low a price. They may now become forced to take only a fraction of that. Severance Packages The executives have severance agreements that would pay them seven years of salary and bonus in case they leave after a takeover. They also each could receive options for 1 million shares at ``fair market value,'' full vested and exercisable for 10 years. Clear Channel's third-quarter profit rose 8.2 percent on increasing advertising sales at its radio stations. Profit from continuing operations climbed to $185.9 million, or 38 cents a share, from $171.8 million, or 32 cents, a year earlier. Sales increased to $1.79 billion from $1.68 billion.

Posted by lvmreader @ 03:33 AM 0 Comments

Goldman Sack-of-?!*!

Bloomberg: Goldman's Global Alpha Falls 26% in 2007, People Say (Update3)

Goldman Sachs Group Inc.'s $8 billion Global Alpha hedge fund has fallen 26 percent so far this year, a decline that may prompt more investors to withdraw their money, according to people familiar with the fund. Goldman's largest hedge fund, managed by Mark Carhart and Raymond Iwanowsk, has dropped almost 40 percent since July 31, 2006, said the people, who declined to be named because the fund is private. The Standard & Poor's 500 Index of the biggest U.S. stocks has returned 16 percent during the same period.

Posted by lvmreader @ 03:29 AM 0 Comments

Unlucky Blackstone: Just about the worst timing for a float you ever saw

Bloomberg: Blackstone, Fortress: Time to bargain hunt?

Wall Street is a big cheerleader of the two firms, but scooping up shares of these companies is a risky proposition. What a difference a few months can make. Turmoil in the credit markets has turned off everyday investors from risk in general and taken a toll on stocks in the financial sector. Analysts are upbeat on the long-term prospects of Fortress Investment Group (yellow) and Blackstone Group (blue), but the stocks could have further to fall.

Posted by lvmreader @ 03:28 AM 0 Comments

Friday, August 10, 2007

Nice little dredging from the Beeb

BBC News: US exports poison

Bit of a tabloid title but a nice little article non the less covering "complete evaporation of liquidity in certain market segments of the US securitization market". The posts are a very interesting read and detail the scary side-effects that this US originating debacle will export to the UK and Europe.

Posted by enuii @ 11:34 PM 2 Comments

UK Sub-prime lending is a larger problem than previously thought! You don't say!

Timesonline: Original News Article

'...nearly 40 per cent of mortgages in arrears now lead to repossessions, up from 12 per cent just three years ago. The figure is far higher than anything seen in the 1980s or 90s and suggests that sub-prime lending is a larger phenomenon than previously thought.'

Posted by ben2013 @ 10:45 PM 0 Comments

The blame game has started

Times: Credit crisis could lead to surge in litigation

A meltdown in the credit markets could lead to banks, hedge funds and private equity firms finding themselves embroiled in years of costly litigation, lawyers warned today. In the past few weeks, law firms have received an increasing number of inquiries from clients wanting to know if they can be held to their commitments if the credit markets collapse. At the same time, private equity and corporate clients want to know if the banks can be forced to make good on their lending promises.

Posted by uncle chris @ 09:40 PM 4 Comments

Markets Left Reeling...

Guardian: News Article

This is the latest on the FTSE. Down 3.7% , the biggest one day fall for 4 years. Well I wonder what will happen on Monday?

Posted by orwell @ 06:57 PM 23 Comments

Dorothy, Kansas, Bye Bye

LaRouchePub: Bankers Report Interbank Lending Shut For Two Hours Over German Bank Crisis

August 9, 2007 (LPAC)--A senior European banking source reports that the interbank money market closed down this morning for two to three hours, for the first time ever. Rumors had spread that the German Bundesbank was holding an emergency meeting because of a collapse of a major German bank, believed to be Westdeutsches Landesbank, one of the largest in Germany. The Bundesbank then released a statement saying that the meeting was to discuss the IKB banking crisis. The source said that a Westdeutsches Landesbank failure would have collapsed the entire global financial system. The source underlined that this ongoing crisis is far worse then anything he has witnessed.

Posted by lvmreader @ 06:56 PM 1 Comments

Wake up! The Bees are on their knees!

Times: News Article

Who Said That They Were Intelligent And We Weren't ? Well Let Them Try And Live Without Any Life Forms When Their Behaviour Has Destroyed Them!

Posted by orwell @ 06:49 PM 0 Comments

Bernake weaves money from thin air Fed intervention calms markets

Global fears over liquidity triggered further sweeping losses for European and Asian stocks, but two interventions by the Federal Reserve appeared to bring some stability to US shares. The Federal Reserve took the significant step on Friday morning of announcing that it was prepared to accept mortgage-backed securities that have become virtually unsellable amid recent concerns about risk, making $35bn in extra funding available to the financial system. [note: at time of posting it looks like it's going back down again]

Posted by dohousescrashinthewoods @ 06:20 PM 5 Comments

625,000 payoff (1 yr salary) for losing market share

Timesonline: HBOS retail chief exits after a year in the job

HBOS yesterday revealed the surprise departure of Benny Higgins, the high-profile head of its struggling retail banking business who was poached from Royal Bank of Scotland only last year. The bank also confirmed that Phil Hodkinson, its well-regarded finance director, will retire next year when he turns 50. He will be replaced by the former incumbent, Mike Ellis, 56, who will return to HBOS in September, two years after he retired from it. Mr Higgins will leave Britain's largest mortgage lender at the end of the year. HBOS confirmed he will receive a payoff but refused to give details, adding only that the two parties had reached a mutually acceptable arrangement. According to the company's latest annual report, he is eligible for one year's salary - or 625,000.

Posted by lvmreader @ 06:16 PM 1 Comments

Strewth, ya mean our investment is worth less than we thought?

CreditFlux: Australian councils caught up in subprime CDOs reports Australian Financial Review

Australias Financial Review has repeated claims that 35 local councils have severe mark-to-market losses on a CDO backed by US subprime mortgages that they purchased as part of their investment portfolios. Australian local authorities invest under prudent person guidelines and generally purchase highly rated securities and bank debt or managed funds. The article focuses on what it calls hard sales tactics by the deal arranger Grange Securities, which was bought by Lehman Brothers earlier this year. The article concludes by suggesting that two Australian states are looking to change investment guidelines for councils.

Posted by lvmreader @ 05:19 PM 0 Comments

"Not that we at the SEC don't trust you guys or anything like that..."

CreditFlux: SEC checks books of top banks and brokers for subprime losses, reports Wall Street Journal and Thomson Financial

It has come to somethig when the SEC publicly doesn't even believe the banks.

The US Securities and Exchange Commission is checking the books of top Wall Street brokerage firms and banks to make sure they aren't hiding losses related to subprime mortgage woes, Thomson Financial sites the Wall Street Journal as reporting today. Among the first firms said to be looked at are Goldman Sachs and Merrill Lynch. The SEC is looking into whether firms are using consistent methods to calculate the value of subprime assets in their own inventory, as well as assets held for customers such as hedge funds, according to the original WSJ report.

Posted by lvmreader @ 05:12 PM 0 Comments

Official - UK Economy is Stable

Yahoo News: Brown says economy is on firm footing

I always thought stable means it was level and consistant like a well balanced see-saw, not racing away like HPI or crashing like the FTSE. Even Gordon seems a little confused to what is really happening to the economy. More Interest Rate rises look likely, hardly the ideal footing for the economy to be stood on, I would have thought.

Posted by mattpascoe @ 03:03 PM 11 Comments

FT Acadametrics index bullish London house price rises race away

House prices in London have once again accelerated away from the rest of the country, the latest FT House price index shows. The report, published on Friday, provides further evidence that the capitals housing market is dancing to a merrier tune with its buoyant economy, attractiveness to overseas investors and shortage of supply ensuring recent interest rate rises have done little to dampen demand.

Posted by dohousescrashinthewoods @ 01:29 PM 5 Comments

Good comments on China - PAUL CRAIG ROBERTS Assistant Secretary of the Treasury in the Reagan administration

counterpunch: Uncle Sam, Your Banker Will See You Now ...In the Hole to China

This is a grim outlook. We got in this position because our leaders are ignorant fools. So are our economists, many of whom are paid shills for some interest group. So are our corporate leaders whose greed gave China power over the US by offshoring the US production of goods and services to China. It was the corporate fat cats who turned US Gross Domestic Product into Chinese imports, and it was the free trade, free market economists who egged it on. How did a people as stupid as Americans get so full of hubris?

Posted by sold 2 rent 1 @ 01:20 PM 2 Comments

Tiger lost its claws

Firstrung: House prices in Ireland fall by 8K in a year

National house prices in Ireland declined by 2.6% in the first six months of 2007 according to the latest edition of the permanent tsb / ESRI House Price Index. The index - published today - measures the movement of house prices over the first six months of the year... The index does not measure volume/activity in the market and it can be assumed that the current climate has resulted in a lower than normal level of activity, which means that actual sentiment is not fully reflected in the price trend at this early stage in the ongoing Irish housing market correction.

Posted by converted lurker @ 12:06 PM 0 Comments

Black Friday?

FT: 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 15 Comments


cnbc: European Stocks Pare Losses as ECB Adds More Liquidity


Posted by royston @ 11:32 AM 1 Comments

Impact of Mortgage Crisis Spreads

Wall Street Journal: Business News

But wait a minute, I thought Countrywide had just bought out Homebanc's mortgage books?

Posted by orwell @ 11:17 AM 0 Comments

The cheap money era is over

MoneyWeek: If banks can't trust each other, who can they trust?

Throughout the Western world, but particularly in the UK and the US, economic growth, and each persons standard of living, have been propped up, or relied exclusively on the availability of cheap money. That's ending right now. Suddenly, its going to be better to be a saver than a spender...

Posted by mary @ 10:51 AM 0 Comments

Data from actual sold prices

The Motley Fool: House Prices Start to Fall in London

Various housing categories and locations in London showing decreases from Land Registry data from April - June 2007

Posted by claire @ 10:01 AM 1 Comments

More of the same

FT - Reuters: Asian markets slide as credit fears spread

It will be interesting today to see how European and US stocks and government respond. Will they recover? Will they nosedive? The weekend couldn't come soon enough and there'll be a few financial hangovers to nurse on Saturday morning.

Posted by planning4acrash @ 08:12 AM 8 Comments

Its on!

BBC News: Asia markets fall after US losses

Nikkei down 2.4%, Bank of Japan injects $4.2bn, Australia injects double its normal level of cash. "Analysts say that a credit crunch - when it becomes harder for banks, companies and consumers to get access to loans and cash to run their operations - is a serious occurrence that could lead to a recession".

Posted by planning4acrash @ 08:01 AM 8 Comments

Its the quarterly house price crash feeding frenzy time, have fun!

BBC News - Permanent Special Feature (linked from HPC homepage also): Land Registry Data, England Only so far (APRIL - JUNE)

The BBC are yet to update Scotland, Wales and N-Ireland on their website, but they should follow soon. Highlights so far, from a brief nosey: Only 0.4% RISE FOR THE COUNTRY AS A WHOLE in the last quarter. Bath and NE Somerset down 1.3%. Cornwall and Isle of Wight down 0.5%. Detached properties in Oxford down 26%. London: No detached properties sold in five London Boroughs for three months, including Islington and Kensington and Chelsea, the latter saw 0% rise as a result, either this is a glitch, or a credit crash is hitting the oil barons! 25% fall in Camen terraces, Camden experiencing a 3.6% fall for all properties. Many places still booming, but the 0.4% growth stat for the whole and some interesting falls make this a good read.

Posted by planning4acrash @ 12:32 AM 16 Comments

Thursday, August 9, 2007

Kirstie Allsopp's Location, Location, Location blamed for burglary!

SKY News: Owners Think Show Gave Thieves Idea

Thieves burgled a 1m house just days after the property was featured on TV show Location, Location, Location. The owners are convinced that the crooks saw the programme and then got the idea to raid the house.

Posted by webmaster @ 10:52 PM 5 Comments

lies, damn lies and statistics

UK Finance: House Prices Start To Fall In London

Beyond the veil of statistics house price have been falling even in london. Has the dagger has finally reached the heart?

Posted by deepak @ 10:31 PM 22 Comments

Looks like they may have closed the $500m fund now

The Street: Goldman Closing Fund

Folks, this really is the beginning of the end. There is only so much the Fed and Central Banks can do with a trainwreck of this magnitude. We will see more and more funds closing after losing and the relevant indices will be shattered even more as frightened investors redeem investments to get to safety.

Posted by lvmreader @ 09:59 PM 0 Comments

The death of the Yen Carry Trade?

Reuters: Yen flies as investors shun risk, but dollar up vs. euro

The yen soared on Thursday as investors ditched risky trades funded by low rates in the Japanese currency after one of Europe's biggest banks froze funds with links to the troubled U.S. subprime market. The euro, meanwhile, fell as much as 2 percent against the yen and 1 percent against the dollar after France's largest bank, BNP Paribas (BNPP.PA: Quote, Profile, Research) temporarily suspended redemptions at three funds worth 1.6 billion euros, sending overnight U.S. and euro zone borrowing rates soaring.

Posted by lvmreader @ 09:56 PM 4 Comments

Again, due to people having to unwind positions, more likely

Reuters: Gold sinks on liquidity fears

Gold ended down more than 2 percent at a one-week low in New York on Thursday as concern over liquidity flared in credit markets and as the unwinding of yen-carry trades led to a sharp surge in the dollar. "A lot of investment funds are in trouble nowadays and if this continues, they would reduce a lot of risk positions, including gold, in their effort to generate some dollars," said Michael Kempinski, senior precious metals trader at Commerzbank. "Physical demand is not strong anymore. There is a risk of downside movement in gold," he added.

Posted by lvmreader @ 09:56 PM 0 Comments

Likely due to people unwinding hedged positions which were long oil

Reuters: Subprime crisis weighs on oil

NEW YORK (Reuters) - Oil fell on Thursday as worries over the U.S. subprime mortgage sector battered global markets, but losses were limited as refined products prices held firm on tight U.S. supplies. Mounting defaults in the U.S. subprime mortgage sector, which makes home loans to people with poor credit histories, roiled world stock markets again on Thursday after revelations that more large financial institutions in the United States and Europe had posted heavy losses on mortgage investments. A shortage of cash in money markets prompted the European Central Bank to add emergency liquidity.

Posted by lvmreader @ 09:53 PM 0 Comments

When a Hedge Fund Manager does it, its fraud, when your bank does it, it's business as usual for them and too bad for you

FundStreet: June 2005: Hedge Fund Mananger Swindles Investors

Howard K. Waxenburg, a onetime successful hedge fund manager, shot himself in the head in his home last month. Waxenburg ran a hedge fund that through the course of 15 years managed to accumulate more than $73.7 million from approximately 200 investors. Despite Waxenburg losing his job in the 1980's for deceiving and stealing from his employer at the time, his clients regarded him as an honest man and placed their trust as well as their money in him.

Posted by lvmreader @ 08:41 PM 0 Comments

This may explain the dash for cash

HuffingtonPost: Stocks Drop on Rising Credit Anxiety

NEW YORK Wall Street fell sharply again Thursday after a French bank said it was freezing three funds that invested in U.S. subprime mortgages because it was unable to properly value their assets. The Dow Jones industrials fell more than 200 points. The announcement by BNP Paribas raised the specter of a widening impact of U.S. credit market problems. The idea that anyone _ institutions, investors, companies, individuals _ can't get money when they need it unnerved a stock market that has suffered through weeks of volatility triggered by concerns about available credit and bad subprime mortgages.

Posted by lvmreader @ 08:17 PM 0 Comments

A CDO is a collection of loans, mortgages and other obligations to pay

Bloomberg: Four CDOs With Subprime Loans May Have Ratings Cut (Update2)

June 22 (Bloomberg) -- Four collateralized debt obligations worth about $3.1 billion and containing subprime mortgages from 2006, the kind that resulted in losses to two Bear Stearns Cos. hedge funds, may have their credit ratings cut by Fitch Ratings. The CDOs are the $288 million Trainer Wortham First Republic CBO III issued in 2003 and managed by Trainer Wortham & Co.; the $400 million ACA ABS 2003-1 and $725 million ACA ABS 2003-2, both issued in 2003 and managed by ACA Management LLC; and the $1.7 billion Ipswich Street CDO Ltd. issued last year and managed by MFS Investment Management, New York-based Fitch Ratings said in separate statements today

Posted by lvmreader @ 08:13 PM 6 Comments

Goldman Sacked?

Wall Street Journal: Second Goldman Hedge Fund Moves to Sell Some Positions

A second Goldman Sachs Group Inc. hedge fund has hit a rocky patch and has sold down some of its positions, according to a person familiar with the matter. Goldman's North American Equity Opportunities hedge fund had $767 million under management earlier this year. The Fund was down over 15% this year, through July 27, according to investors and was down more than 11% in July alone. It is not known how much the fund has sold in recent days. Word of the turmoil at this fund comes as Goldman's most widely known internal fund, Global Alpha, has been forced to ...

Posted by lvmreader @ 08:11 PM 1 Comments

"But, but we don't have any exposure to subprime".......

Bloomberg: BNP Paribas Freezes Funds as Loan Losses Roil Markets (Update5)

Aug. 9 (Bloomberg) -- BNP Paribas SA, France's biggest bank, halted withdrawals from three investment funds because it couldn't ``fairly'' value their holdings after U.S. subprime mortgage losses roiled credit markets. The funds had about 1.6 billion euros ($2.2 billion) of assets on Aug. 7, after declining 20 percent in less than two weeks, spokesman Jonathan Mullen said today. The bank will stop calculating a net asset value for the funds, which have about a third of their money in subprime securities rated AA or higher.

Posted by lvmreader @ 05:53 PM 7 Comments

Now this is not the end. It is not even the beginning of the end. but it is, perhaps, the end of the beginning

Bloomberg: Highbridge Hedge Fund Owned by JPMorgan Drops 5.3% in August

Aug. 9 (Bloomberg) -- A $1.8 billion publicly traded hedge fund managed by Highbridge Capital Management LLC, a unit of JPMorgan Chase & Co., has lost 5.3 percent of its value so far this month. The Highbridge Statistical Market Neutral Fund, representing about 5 percent of the New York-based hedge-fund firm's $37 billion in assets under management, was designed using mathematical models to make money in rising or falling stock markets, according to fund documents. With the decline in the past six trading days, the fund has fallen 3.3 percent this year.

Posted by lvmreader @ 05:51 PM 0 Comments

"Healthy" banks can be taken down by other assets weaking as credit defaulters have to sell those assets

Bloomberg: U.S., European Stocks Tumble on Credit Concerns; Banks Retreat

Aug. 9 (Bloomberg) -- U.S. stocks followed European markets lower after losses tied to subprime mortgages spread through credit markets, threatening earnings at banks and brokerages. Citigroup Inc., Bank of America Corp. and JPMorgan Chase & Co. led declines in financial companies after BNP Paribas SA, France's biggest bank, halted withdrawals from funds that owned subprime loans because it can't value the holdings. Home Depot Inc., the largest home-improvement chain, fell the most in a year after saying the $10.3 billion purchase price for its contractors' unit may be cut as investors shun riskier debt.

Posted by lvmreader @ 05:50 PM 2 Comments

You are far too late guys, far too late

Bloomberg: ECB Offers Unlimited Cash as Bank Lending Costs Soar (Update6)

Aug. 9 (Bloomberg) -- The European Central Bank, in an unprecedented response to a sudden demand for cash from banks roiled by the subprime mortgage collapse in the U.S., loaned 94.8 billion euros ($130 billion) to assuage a credit crunch.

Posted by lvmreader @ 05:49 PM 1 Comments

Markets Dip Again.

Reuters: Investors dash for cash

US sub prime market problems still refusing to go away. When will the true extent of the problem come out?

Posted by speculatorone @ 04:34 PM 1 Comments

Growing concern at the extent of the sub-prime problem hits equity markets

FT: FTSE lower as credit worries intensify

At the time of this blog the FTSE 100 was 2.2% down on the day. Markets again become nervous as the global implications of the US sub-prime problem hit equity markets. The ECB attempt to allay fears by pumping 63bn into the system but the effect of its actions has appears to have spooked the money markets and with the sub-prime problem appearing to grow there may be more trouble ahead.

Posted by denzil @ 03:32 PM 5 Comments

There's no sub-prime problem here, or is there?

BBC: ECB moves to help banking sector

The European Central Bank (ECB) pumped 95bn euros (63bn) into the Eurozone banking market to allay fears of a credit crunch. The ECB brushed the gesture aside by stating it was a "fine-tuning" operation but the significance of this action is that it is the banks largest single intervention since 9/11. Ciaran O'Hagan, a Societe Generale analyst said, "the longer-term fear is that these liquidity issues could spill into the wider economy".

Posted by denzil @ 03:23 PM 5 Comments

There may be trouble ahead.. ECB offers emergency funds to boost liquidity

Things seem to be swinging into action for the credit crunch: The European Central Bank took emergency action on Thursday to stabilise money markets amid broadening fears of a liquidity crunch. It injected 94.8bn as part of an unlimited cash offer to borrowers at its main lending rate of 4 per cent after overnight rates shot up to 4.7 per cent, their highest in nearly six years. This liquidity-providing fine-tuning operation aims to assure orderly conditions in the euro money market. The ECB intends to allot 100 percent of the bids it receives, the central bank said when it called for bids.

Posted by dohousescrashinthewoods @ 02:16 PM 7 Comments

Got any spare cash behind the sofa?

Bloomberg: ECB Offers Unlimited Cash as Bank Lending Costs Soar

The European Central Bank, in an unprecedented response to a sudden demand for cash from banks

Posted by mrmickey @ 02:05 PM 1 Comments

A very good and quite funny article about subprime contagion

Dealbreaker: The Hot Zone of Subprime Contagion

This article revolves around a letter from the CEO of Hayman Capital Management, who have made 240% returns banking on a sub-prime bust. I can't deny that bits of it made me laugh out loud. "Theres been a lot of talk around these parts of late about the best way to tell someone whos given you money for your hedge fund that the money went away and isnt ever coming back. Theres the James Cayne-method, which involves lies, deceptions and distractions via use of funds with 10 words in their name. The Im sorry, Im sorry, stop yelling at me-autistic rocking/crying way, made famous by Jeff Larson. And if Third Point ever sends such a note, we imagine itll be something along the lines of, Jesus f***, people, we lost your money. Quit your bitching and move on.

Posted by jeremiah @ 02:00 PM 0 Comments

Rates on the up everywhere Bank of Korea surprises with rate rise

The Bank of Korea unexpectedly raised its benchmark interest rate by a quarter point to a six-year high of 5 per cent on Thursday to absorb excessive market liquidity and contain growing inflationary pressure. The rate hike, the first ever to follow just a month after a previous hike, surprised South Koreas financial markets, driving bond prices down and pushing the won higher.

Posted by dohousescrashinthewoods @ 01:14 PM 3 Comments

LONDON - London is quickly approaching New York as the financial capital of the world, but could its strength be its undoing? Could it unduly expose the British economy to the credit crunch that threatens to engulf global markets?

forbs: Vulnerable Britannia?

LONDON - London is quickly approaching New York as the financial capital of the world, but could its strength be its undoing? Could it unduly expose the British economy to the credit crunch that threatens to engulf global markets? According to a study published by the think tank Oxford Economics, the credit contraction could take a big bite out of the U.K. economypossibly even more than it could from the U.S.

Posted by chris :-)) @ 12:15 PM 0 Comments

Buy-to-letters - not immigrants - to blame for the housing bubble

MoneyWeek: Are immigrants to blame for soaring house prices?

In terms of the economics of the housing market, the impact of immigration has been hugely over-exaggerated - largely by vested interests who are hoping to see the property bubble last for as long as possible. As arguments go, the old supply and demand one is pretty compelling. You can't argue with basic economics. But there's one key fact that proves that there isn't a physical housing shortage...

Posted by mary @ 10:25 AM 7 Comments

Will he or won't he?

Brand Republic: Labour calls general election ad pitch

The Labour Party has approached agencies to pitch for its advertising account in the run up to a general election. (It's a bit early to start doing this for a May election, so maybe it will be sooner.)

Posted by sara @ 10:18 AM 6 Comments

US politicans considering bailing out people in mortgage trouble! House Prices are the New God and must be appeased at ANY cost!

FT: Democrats call for action on mortgage crisis

Lefty market intervention at it's worst! If this gets the go-ahead we might as well all pile into the housing market and be done with it!

Posted by tyrellcorporation @ 09:38 AM 3 Comments

Ready, steady, leg it! Flow out of UK property funds doubles

The flow of money out of UK property funds has doubled since the spring, figures to be published on Thursday show. The data will be watched closely amid fears of waning confidence in the sector. Investors have poured huge amounts of cash into property funds in the past few years to take advantage of yearly double-digit returns.

Posted by dohousescrashinthewoods @ 09:35 AM 10 Comments

More Expensive Borrowing.

The Times: Business News Article

Well sums it up really, looks like there will be more Interest Rate rises (note the plural), on the horizon... Why don't they just deliver the medicine in one go? It would I feel be more effective...

Posted by orwell @ 09:31 AM 0 Comments

Another one on the ropes BNP suspends funds after subprime shock

French bank BNP Paribas has suspended three of its funds on Thursday as problems in the US subprime mortgage sector are preventing it from calculating their value. It said the valuation of the funds would resume as soon as liquidity returned to the market and added that in the continued absence of liquidity, additional information on the envisaged measures would be communicated to investors within a month. [Poof! There goes another bundle of funny money]

Posted by dohousescrashinthewoods @ 09:20 AM 7 Comments

BNP Paribas SA, France's biggest bank, said it froze three asset-backed securities funds because it's no longer possible to ``fairly'' value their holdings, as concern over U.S. subprime mortgage losses roils credit markets BNP Paribas Freezes Asset-Backed Funds Amid Subprime Concern

The complete absence of liquidity in certain market segments of the U.S. securitization market has made it impossible to value certain assets fairly regardless of their quality or credit rating,'' the Paris-based company said in an e-mailed statement today. Late payments on U.S. subprime mortgages to borrowers with poor credit histories are at the highest since 2002, driving down the value of bonds backed by home loans and causing turmoil in credit markets. BNP Paribas will temporarily suspend the calculation of net value for the funds, and halt redemptions and new investments. The funds affected are called Parvest Dynamic ABS, BNP Paribas ABS Euribor and BNP Paribas ABS Eonia.

Posted by chris :-)) @ 07:56 AM 1 Comments

more doom and gloom for householders from the tabloids yippee

daily mail: Bank chief fears for 'vulnerable' families as rate increase looms

Mortgage and other debt repayments could rise to punishing levels after Bank of England chiefs signalled yesterday that the base rate is likely to go up again soon.

Posted by sold out @ 07:44 AM 4 Comments

The exposure at the banks surveyed was slightly more than Y1,000bn as at the end of June, according to the research

ft: Japans banks in $8.3bn subprime exposure

Japans large banks could have an aggregate exposure of Y1,000bn ($8.3bn) to the stricken US subprime mortgage market, highlighting the extent to which the problems of low-quality mortgages in the US are affecting investors globally. According to recent estimates by UBS, which surveyed the top nine banks, the largest exposure to the US subprime sector appears to be through investments in complex financial instruments such as collateralised debt obligations and other securitised products that have subprime loans as their underlying assets.

Posted by japanese housewife @ 04:41 AM 1 Comments

New Zealand house prices starting to burst?

Real estate institute of New Zealand: New Zealand house prices brace against winter chill

Two consecutive months of declines in national house prices and sales volume has tumbled (to levels last seen in 2001). Looks like th tops in, and with floating rates an eye popping 10.25% the only way is down in kiwilandia.

Posted by andy h @ 04:40 AM 0 Comments

The Japanese experience of holding large losses as opposed to taking a hit and moving on was a direct cause of the Japanese malaise," said Josh Rosner, co-author of the report and a managing director at Graham Fisher, an investment research firm in New Yo

Reuters: Hidden U.S. subprime losses may mirror Japan bank crisis

Investors and banks holding on to U.S. subprime mortgage bonds in hopes of a recovery in value may make losses worse, mirroring the Japanese banking crisis in the 1990s, according to authors of a new report. The Japanese banking crisis, triggered in the early 1990s by a slumping property market and brokerage collapses, led to a decade-long credit crunch. The government subsequently had to step in to stabilize the banking system by injecting public money into top banks

Posted by chris :-)) @ 04:38 AM 0 Comments

The loss comes as the hedge fund industry suffered its worst week in four years

financial.seekingalpha: Goldman Denies Hedge Fund Liquidation

After losing 7.7% in the week ended July 27, the fund is now -12.1% on the year, before fees, according to investors. In 2006, the Alpha fund lost 6%, after a robust 40% gain in 2005, and an average 15.1% since its inception in 1995. The loss comes as the hedge fund industry suffered its worst week in four years, with Hedge Fund Research's investable hedge fund index falling 3.01%. A Goldman spokesman declined to comment.

Posted by chris :-)) @ 04:23 AM 0 Comments

Sort It Out Yourselves

ft: Measured Fed offers market no bail-out prospect

The shadow of Alan Greenspan looms once again over Ben Bernanke as the Federal Reserve chairman and his colleagues grapple with how to respond to the sudden bout of turmoil in equity and credit markets. Mr Greenspan, the former Fed chief, won the devotion of many in the markets by his deft handling of a series of financial crises in 1987, 1998 and following the terrorist attacks of 2001.

Posted by chris :-)) @ 04:09 AM 0 Comments

A call to Goldman Sachs was not returned by press time.

inalternatives: Goldman Denies Global Alpha Liquidation Rumors

Goldman Sachs denies that it is liquidating its troubled flagship hedge fund, Global Alpha.The Wall Street giant is seeking to squelch today's market rumors that it would be shuttering the once high-flying $10 billion fund, which has hit on hard times. The fund lost almost 8% in the week ended July 27, and is down more than 12% year-to-date. Its in the throes of a 16-month-long losing streak after suffering its first down year in 2006.Earlier today, Bloomberg reported that shares of defense and aerospace company EADS, Germanys Continental Corp. and Italian car maker Fiatall constituents of Global Alphawere down on rumors that the hedge fund was on its last legs.

Posted by chris :-)) @ 03:03 AM 0 Comments

Summarising after BOE inflation report.

Telegraph Talk: Why the Bank will raise rates, and soon

Suggests that rates will stay at or above 6% for years to come, hints at higher rates and mentions house prices but sits on the fence for both issues. Quite interesting all the same.

Posted by planning4acrash @ 01:19 AM 2 Comments

Wednesday, August 8, 2007

In Japan, the banks among them two of the 10 biggest in the world have been reeling for the better part of a decade, weighed down by an ever-accumulating pile of uncollectible debts. Analysts fret that it is impossible to discern a true picture of the Investor Beware:The Next Enron May Be Lurking in Europe or Japan

LONDON: While American business practices have come under scrutiny in the wake of the Enron scandal, international accounting experts stress that Europe and Asia are no strangers to questionable bookkeeping and corporate meltdown. Litigation continues over accounting practices that are alleged to have contributed to the downfall of the venerable British banking institution Barings, and Enron's debacle harks back to the near-collapse of a giant German trading company brought to its knees after a disastrous foray into the oil futures market a decade ago.

Posted by chris :-)) @ 11:31 PM 0 Comments

An analyst at the Bank of Italy expressed surprise that the Slovenian central bank had spoken publicly on the threat to consumer demand. He said: "The markets were very unsettled on Friday. Today they seem a bit calmer but still it seems very unwise for a

ft: Subprime crisis could spread to EU, Slovenian bank chief warns

Mr Trichet and other central bankers are trying to come to grips with the long- and short-term effects of the crunch in credit markets. Many European investors have purchased securities linked to US subprime mortgages and some have been adversely affected, including IKB, the German bank that required a state-led bail-out last week.

Posted by chris :-)) @ 10:48 PM 0 Comments

The cat is out of the bag U.K.'s Subprime Crisis May Be Worse Than U.S.'s:

"The U.K. has had a property bubble every bit as crazy as the U.S.'s. Valuations were stretched, and lending criteria loosened. And now arrears are starting to rocket, even while the economy remains healthy." "Not only does the U.K. face its own subprime crisis, it could be far worse than in the U.S."

Posted by dobber @ 10:06 PM 5 Comments

For a $55 fee, the operators of this small California company will help you get a loan by employing you as an independent contractor. They provide payslips as proof of income and, for an additional $25, they also man the telephones to give you a glowi

ft: US seeks culprits for subprime

At the height of the US subprime lending boom, taking out a mortgage could not have been easier. Low credit score and history of bankruptcy? No problem. Income too low to qualify for a mortgage? Inflate what you earn on a stated income loan. Nervous that your lender might check up on your stated income? Visit a $55 fee, the operators of this small California company will help you get a loan by employing you as an independent contractor. They provide payslips as proof of income and, for an additional $25, they also man the telephones to give you a glowing reference should your lender need it.

Posted by chris :-)) @ 10:05 PM 0 Comments

The Lie That Will Kill Hedge Funds The Lie That Will Kill Hedge Funds

When you run a hedge fund, you are always seeking capital. You can seek money directly from institutions or individuals, or you can do the easiest thing and seek money from those who are offering it: "fund of funds" managers who, specifically, look for managers to place other people's monies. This cohort of investors had just gotten started in about my seventh year as a hedge fund manager, and they were always plying me with capital. I tried it for a while, but the ones I had, and they were substantial, demanded too much of my time and, I thought, forced me to make shorter-term decisions than I liked. I valued my independence too much. So I sent their money back.

Posted by chris :-)) @ 09:56 PM 0 Comments

Inflation Down to 2.4 Percent if you believe the stats Struggle against price rises continues uphill

Consumer spending resilient, house price growth slowing and interest rate rises will only reduce annual post-tax household income growth by 0.1 percentage points. Ha Ha Ha Ha Ha - Oops I've just wet myself.

Posted by enuii @ 08:16 PM 3 Comments

By Christmas, Mr Tice expects the share market to have shed 30 per cent of its value, with another 20 per cent slide due next year.

smh: Time to sell says 'Dr Death'

HE'S been called the Dr Death of the US share market and, listening to Texas money manager David Tice talk about where the global economy is heading, it's not hard to understand why. Mr Tice believes the US is on the cusp of its worst recession since World War II and his advice to Australian investors is simple: sell all US stocks as quickly as possible. "People have got to open their eyes to the risk out there," he said yesterday. "There are calamitous times ahead and some nave people are going to be badly burned."

Posted by chris :-)) @ 06:40 PM 0 Comments

Size of loans make rate rise worse

smh: This will be tipping point for a lot of borrowers," he said. "It will be like hitting a panic button."

Property prices have gone up so much in the past two decades that mortgage repayments now soak up 9.5 per cent of all disposable household income compared with 6 per cent in 1989. As a community we are now forking out a much bigger proportion of our incomes to pay the interest on our mortgages than when rates were an eye-popping 17 per cent.

Posted by chris :-)) @ 06:31 PM 3 Comments

Toll Brothers, the largest US luxury homebuilder, on Wednesday warned that home sales might fall even further in the latest sign that the worst housing slump in 16 years has not yet reached its lowest point.

byzantine-ruins: Toll warns on deepening housing slump

With the uncertainties roiling the mortgage markets right now, the pace of home sales could slow further until the credit markets settle down, said Robert Toll, chief executive, as he announced that Toll Brothers revenues fell in the companys third quarter. We are now in the twenty-third month of a down housing market. Hesitant customers remain on the sidelines, unsure of whether home prices have bottomed

Posted by chris :-)) @ 06:17 PM 0 Comments

American International Group Inc., the world's biggest insurer, may be sitting on losses of as much as $2.3 billion from securities backed by subprime mortgages, analysts said. world's biggest insurer, may be sitting on losses of as much as $2.3 billion

American International Group Inc., the world's biggest insurer, may be sitting on losses of as much as $2.3 billion from securities backed by subprime mortgages, analysts said. In a ``worst-case scenario,'' AIG may lose $2.3 billion from its investments in subprime mortgage bonds as well as loans given to borrowers with poor or limited credit, A.G. Edwards Inc. analysts in St. Louis said today in a report. Analysts at Goldman Sachs Group Inc. issued a report today estimating losses of as much as $1.4 billion.

Posted by chris :-)) @ 06:16 PM 1 Comments

Big fuss about a US crash for nothing!

Bloomberg: U.S. MBA's Mortgage Applications Index Rose 8.1%

Mortgage applications in the U.S. rose last week by the most since January, as cheaper borrowing costs encouraged more Americans to seek loans for home purchases and refinancing. A resilient labor market and lower home prices may support sales and eventually help reduce the glut of unsold properties, economists said. A report last week showed Americans signed more contracts to buy previously owned homes in June, a sign the weakness in the housing may not get much worse.

Posted by benstar @ 05:55 PM 2 Comments

Price of houses dropping

Belfast Telegraph: Northern Ireland house prices crash 7%!

"Industry sources have told the Belfast Telegraph that those who bought a house four months ago could have lost money in the current market, sparking fears of negative equity. "

Posted by damo @ 04:50 PM 4 Comments

It may have been a horrible, final week in July for the hedge funds. But Goldman Sachs is in particularly zealous damage control over reports of trouble at its Global Alpha hedge fund. On Tuesday Goldman denied market talk that it was liquidating the fund, following reports it had fallen a total of 12 per cent in two weeks,

Earlier, says Reuters, several traders noted persistent market talk that the Global Alpha fund was being wound down, and that it was selling large amounts of stock in German car parts supplier Continental, aerospace company EADS and Italian carmaker Fiat. Goldman wasnt commenting.

Posted by chris :-)) @ 03:48 PM 0 Comments

So all OK? Well no. The knock-on effects on capital markets revenue in the third quarter could be severe, say DK. They have also excluded the investment banks exposure from their numbers. Subprime in Europe - whos next?

Other banks should have limited exposure - unlike IKBs bet to the tune of 12 times its equity on CDOs. There will be charges, say DK, but these should be treated as one-offs. While remaining underweight on the capital markets banks, DK believes the recent selling of European banking stocks has now reached the point of over-reaction. The sectors earnings multiple relative to the market is now 0.82 times, close to the low of the past five years and in line with that other crisis involving Russian bonds and a notorious hedge fund.

Posted by chris :-)) @ 03:36 PM 1 Comments

Chinese revenge

Daily Telegraph: China threatens to trigger US Dollar crash

The Chinese are threatening to trash the US Dollar unless they playball. They were warned that borrowing against house buying all those "cheap" goods would have a payback!

Posted by the bald man @ 02:56 PM 9 Comments

Round up of subprime news In depth: Subprime lending crisis

Useful portal that lists a host of headlines related to sub-prime. Interesting the FT has now created this as a sub-site. Suggests this is drawing a lot of interest. Noticed one piece saying that Bear Stearns has frozen a third fund, which invested in Alt-A. Looks like it's spreading.

Posted by dohousescrashinthewoods @ 02:12 PM 3 Comments

'In the worst-case scenario, a rapid reversal of asset price inflation could lead to a sharp deterioration in the quality of banking sector assets and create significant contingent liabilities for the public sector. Moreover, this process could be compoun Baltic credit bubble may deflate slowly starting Q4 if ECB tightens policy

Under its baseline scenario, the Baltic credit bubble should start to slowly deflate beginning in the fourth quarter of this year, Standard & Poor's Ratings Service said in a report.However this outlook hinges on the expectation the European Central Bank and other global central banks will continue to tighten monetary policy, and that the Baltic authorities will avoid further fiscal stimulus to their respective economies, the agency qualified

Posted by chris :-)) @ 02:03 PM 0 Comments

Some privately-held home builders have recent indicated that they have seen a spike in cancellations over the past 7-10 days,

market watch: Toll Brothers' home-building revenue slips 21%

Hesitant customers remain on the sidelines, unsure of whether home prices have bottomed," said Chief Executive Robert Toll in a statement. Although the CEO reiterated his view that pent-up demand for homes is rising, he cautioned that "with the uncertainties roiling the mortgage markets right now, the pace of home sales could slow further until the credit markets settle down." A credit crunch has hit the market on fears problems in the subprime mortgages, which are loans designed for home buyers with shakier credit histories, may spread.

Posted by chris :-)) @ 01:59 PM 0 Comments

Nail, coffin, coffin, nail. King cements expectations for further rate rise

To paraphrase Tommy Cooper. Looks like our BTL friends are about to up the pace in heading for their exit, whist encouraging their compatriots to stand firm. Mervyn King indicated interest rates would need to rise to 6 per cent before the end of the year in order to return inflation to the Bank of Englands long-term target. Presenting the August inflation report, the governor of the Bank of England said the economy was benefiting from rapid global expansion. The report said the UK economy had sustained a brisk pace of output growth since the publication of the last report in May despite tentative signs of a slowing in consumer spending.

Posted by dohousescrashinthewoods @ 01:37 PM 3 Comments

IR definitely 6% by the end of the year

FT: King cements expectations for further rate rise

Mervyn King indicated interest rates would need to rise to 6 per cent before the end of the year in order to return inflation to the Bank of Englands long-term target.

Posted by aloha @ 01:01 PM 0 Comments

mortgage market meltdown in the states

CNBC (on market meltdown

this guy is clearly worried about interest rates and the state of the mortgage market in the US (thats an understatement by the way) this video has been viewed 800,000 times and was only posted two days ago (has anyone else posted this- if so sorry i didn't see it)

Posted by nevajism @ 01:00 PM 0 Comments

Even india is concerned about inflation

bbc: India to curb foreign borrowing

MPC should take notes on this, as at the moment they are watching the teletubbies too much!!!

Posted by mark @ 12:43 PM 0 Comments

UK mortgage provider closing branches

BBC "News": C&G announces 31 branches to shut

Nothing to do with the credit crunch, UK house prices falling over the last three months or exposure to the US toxic debt issue. No no, somehow the Internet is to blame for this one.

Posted by paul @ 12:36 PM 2 Comments

It could never happen here right?

Bloomberg: U.K.'s Subprime Crisis May Be Worse Than U.S.'s

We are now all familiar with the damage that can be done to financial markets by a subprime lending crisis

Posted by mrmickey @ 12:17 PM 11 Comments


BBC: Australian rates at 10-year high

Australian interest rates are at their highest level for more than 10 years after the country's central bank raised them by a quarter point to 6.5%.

Posted by hopingforhpc-staffs @ 10:57 AM 0 Comments

Another Example of the Current Credit Squeeze

Times: News Article

Looks like the problem is actually getting worse. This time in respect of a 23bn dollar deal which looks like one of the largest yet. The Times puts it mildly and euphamistically as effectively another 'chill wind' blowing through the credit markets....

Posted by orwell @ 09:19 AM 2 Comments

Sorry Cramer - Higher, Higher, As Brucie Would Say...

Business Week: News Article n Line

It looks like if Cramer has been speculating in low interest rate investments and had his hands burnt, there will be little respite. Well, at least for the moment........

Posted by orwell @ 09:10 AM 2 Comments

second German asset manager was forced on Tuesday to temporarily freeze the assets in its fund after investors saw the value of the fund decline sharply on the back of credit market weakness.

ft: WestLB Mellon venture freezes assets

WestLB Mellon Asset Management is a joint venture between WestLB, the publicly owned German Landesbank, and The Bank of New York Mellon Corporation, which officially completed its merger on July 1 this year. The ABS fund is managed by a team of five investment advisers in Dsseldorf, where WestLB is also based. It has about 300 investment advisers in about a dozen offices the US, Europe, Asia and Australia. They manage about 40bn of assets for clients, including pension funds, banks and insurance companies

Posted by chris :-)) @ 01:08 AM 0 Comments

Perhaps. But it may be worth checking in with the hedge fund guys fielding panicked calls from investors who want to know what happened in July. And what will happen in August and September. By then, fall will be upon us and the anniversary of many bad in

newyork times: Hedge Funds Are Not Profiting From Markets Current Volatility

In recent years, assets have flooded into private equity funds and hedge funds, mostly from institutional players like pension funds, endowments and foundations, seeking good returns with as little risk as possible. Last year alone, more than $126 billion of new money went into hedge funds, the most in any year on record. Since January, Dealogic estimates that $719 billion in buyouts, many by private equity, have been announced globally, also a record.

Posted by chris :-)) @ 12:23 AM 1 Comments

Tuesday, August 7, 2007

Jumbo mortgage rates for Jumbo morgages in the USA

CNN Money: Big-ticket mortgage rates rise

Mortgage rates jump for Jumbo morgages - Its getting real ugly. What a mortgage! What a masive repayment!

Posted by crashlanding @ 09:01 PM 0 Comments

Oil is dropping, just like I said it would

BBC: Oil prices continue downward path

The price of oil steadied but remained lower on Tuesday, amid ongoing worries about the strength of the US economy.

Posted by david20040_0 @ 06:33 PM 26 Comments

40% House Price Rise Unlikely 40% House Price Rise Unlikely

For some time, the loudest commentators and analysts have been positive about house prices. Many of you will have seen today that the National Housing Federation (NHF) expects house prices to rise 40% by 2012, with the average price then breaching 300,000. With compounding, this means an average increase of roughly 8% per year. This is in line with the long-term average, which Halifax says is 8% since 1983.

Posted by david20040_0 @ 06:26 PM 13 Comments

'Nuclear Option'

Telegraph: China Threatens Dollar Sales

Scary Stuff The Chinese government has begun a concerted campaign of economic threats against the United States, hinting that it may liquidate its vast holding of US treasuries if Washington imposes trade sanctions to force a yuan revaluation. Two officials at leading Communist Party bodies have given interviews in recent days warning - for the first time - that Beijing may use its $1.33 trillion (658bn) of foreign reserves as a political weapon to counter pressure from the US Congress. Shifts in Chinese policy are often announced through key think tanks and academies.

Posted by yoss @ 05:51 PM 10 Comments

Loans will go bad, deals will be canceled, fortunes will be lost. The sudden end of cheap financing is wreaking havoc on the buyout market, says Fortune's Shawn Tully.

CNNMoney: Why the private equity bubble is bursting

It's looking more and more as if the private equity phenomenon was a classic Wall Street bubble. It brought unprecedented riches to investment banks, minted a flashy new generation of billionaire Masters of the Universe, and bestowed a magical aura on leveraged-buyout specialists like Carlyle and Kohlberg Kravis Roberts. And now the bubble's bursting. Loans will go bad, deals will be canceled, fortunes will be lost. We're witnessing the unwinding of the whole dynamic that propelled the stock market (not to mention Manhattan real estate prices) to record highs. Alarm bells are ringing.

Posted by yellerkat @ 03:21 PM 2 Comments

Rational look at house prices

No Monkey Business: Common sense on house prices: write on, Sharlene

A little tough going, but worth a read: The supply fallacy It is a simple matter, usually overlooked by experts, that the trend in overall real UK house prices and the pattern of very high cyclical variance around it is not obviously consistent with a structural shortage in house construction. [...] the most likely driver for cyclical deviations from an unsurprising trend has to be monetary: the availability of credit to support (or validate) popular expectations about future prices, rational or otherwise. The unwillingness of Americans to view their extraordinary boom as just a symptom of undisciplined mortgage lending is finally coming to an end with the unravelling of the credit supply to the market

Posted by dohousescrashinthewoods @ 02:22 PM 2 Comments

MEWing to buy cars

The Telegraph: Car production on road to recovery

I saw a friend at the weekend.
He is looking at getting a loan for 20K to buy a car.
He has only ever had one loan before (in the early 1990's) and that was mainly to get some credit history
Previously he would have paid for a car with savings What is happening to my friend reflects what is happening in the wider economy.
People are cashing in on their enormous house price gains and buying big ticket items.

They are seeing real incomes fall but want to maintain their current lifestyle.
The end result is negative savings and greater debt levels.

Remember there are 2 sides to every story.

Posted by sold 2 rent 1 @ 01:02 PM 7 Comments

Finally, as chance to have a say at the BBC

BBC2: Hassled by housing?

The Truth About Property, a new BBC2 Series for the Autumn, would like to hear how your lives have been affected by the property market. Actual link:

Posted by doomwatch @ 12:41 PM 2 Comments

will this have an effect on rates?

Yahoo: Disasters 2007: But What About Our Food?

He predicts that an 80p loaf could go up by as much as 15p by the end of the year. Grain is also needed for animal feed. Mr Fordham fears shoppers will see the price of chicken and pork rise in the next three months.

Posted by mark @ 12:28 PM 0 Comments

More bad news

The Telegraph: Number who lose homes is soaring

Louise Brittain, head of personal insolvency at accountancy firm Baker Tilly, said the figures did not reflect the three interest rate rises this year. "That's when we'll have a disaster on our hands," she said.

Posted by sold 2 rent 1 @ 12:28 PM 15 Comments

October for the big one

The Telegraph: History says bear market may have begun

DJIA 3000 by 2012 anyone?

Posted by sold 2 rent 1 @ 12:22 PM 4 Comments

Great Phone in

BBC Radio 5 Live: Victoria Derbyshire Phone in on house prices

Victoria Derbyshire phone-in from Mon 06 Aug 07 Best one I've heard yet. Lenders & BTLs get it in the neck. Some classic stuff, especially Martin Lewis (approx 30-15 mins from end) who says it as it is and put Victoria down for saying "renting is dead money". Brilliant.

Posted by doomwatch @ 11:28 AM 1 Comments

The reality of US mortgage financing

New York Time: Mortgage Maze May Increase Foreclosures

Easy(er) to understand article on why US subprime is going wrong. "Lenders have often agreed to such steps in the past because it was in everyones interest to avoid foreclosure costs and possibly greater losses. But that was back when local banks held the loans and the bankers knew the homeowners, as well as the value of the properties." "The mortgage itself was pooled with others and sold to investors insurance companies, mutual funds and pension funds." The question I have: "Is the same mortgage pooling going on in the UK?", if it isn't then the fallout in the UK may not be as severe?

Posted by ds_t @ 10:46 AM 0 Comments

Interest rate hikes may be starting to effect UK consumers

MoneyWeek: Are UK rate hikes starting to bite?

UK retail sales are finally starting to show signs of slowing last month saw annual sales rise at the slowest pace since November. Meanwhile, in the US, a mainstream mortgage lender has just gone to the wall. So much for the subprime crisis being contained.

Posted by mary @ 10:43 AM 0 Comments

Isn't property market similar to gambling?

BBC News: Gamblers 'borrow to fund habit'

This article is missing the biggest point: gamblers who borrow 300,000 to bet on the increase of a house's price.

Posted by olivier @ 10:39 AM 0 Comments

American Home Mortgage and other lenders face defaults

The Telegraph: US housing crisis deepens

Merrill Lynch said the property slump was now so serious the Federal Reserve would have to start cutting interest rates as soon as October, predicting a fall from 5.25pc to 3.75pc by the middle of next year.

Posted by sold 2 rent 1 @ 09:58 AM 8 Comments

What goes up....

Guardian: Catching the Subprime bug

As any victim of a summer flu can attest, bugs do get around; and there is growing worry that the UK economy may be about to come down with a touch of what the US has got. After all, both were at the same party - and it got seriously out of hand.

Posted by inbreda @ 09:39 AM 5 Comments

Is someone telling us porkies?

The Thrifty Scot: Data tells different stories for the property market

Have faith in the old saying: You can fool some of the people all of the time, all the people some of the time, but not all the people all the time. The penny seems to be starting to drop as mixed messages from the latest data are noted.

Posted by eyeore @ 08:39 AM 0 Comments

Be encouraged, David 2004 & co. The end is nigh!

EIR: The Clobal House of Cards is Collapsing

The core meltdown of the world ficancial system, which has been in preparation for a long time, has now occurred... While most of the press internationally is in full cover-up mode, the near collapse of the German "industrial credit bank" IKB has shocked some in Germany into recognizing the situation.

Posted by eyeore @ 07:31 AM 0 Comments

Monday, August 6, 2007

Savills Sponsored Property Porn Property by the sea: Wish you were here

These are the best quotes "This is fuelled by bigger salaries and larger disposable incomes and the fact that people are property rich," and "It is gorgeous. I meant to do holiday lets but now I can't bear the thought of strangers being there," Phillippa Coos. Oil of Vitriol Anyone.

Posted by enuii @ 11:38 PM 1 Comments

Death throes or rally?

Bloomberg: U.S. Stocks Rally After Three Weeks of Losses

U.S. stocks rallied the most in four years, led by financial companies, on speculation the government will take steps to limit losses in mortgage lending.

Posted by nearly30 @ 10:20 PM 5 Comments

Now mortgage peeps are down beat!

Mortgage Strategy: Interest rates could hit 6.25%, says AMI

The Association of Mortgage Intermediaries believes the sub-prime problems in the US will impact the UK over the next year.

Posted by nearly30 @ 10:16 PM 7 Comments

Your future is mine!

Guardian: Mortgaging our future

The housing boom underpins and exacerbates Britain's descent into inequality - and it shows how the property market has failed.

Posted by fudge @ 09:26 PM 0 Comments

Reposessions, the only statistics that counts

FT: Is UK subprime going the same way as the US?

The greater risk inherent in subprime lending means arrears are more likely to lead to repossessions, and that this is likely to happen earlier. So, as the CML itself argues, this rise reflects the increasing amount of subprime in the overall mortgage market.

Posted by confused76 @ 09:13 PM 9 Comments

It was as if Bear was breaking a silent code; it would pay a price in the future, Allison vowed. Bear Stearns seeks Wall Street backing

It was Allison's meeting now. The numbers men decided to take a poll. Bankers trust said it was in..Barclays was in. All eyes darted to the hulking Cayne, slouching next to Spector, his colleague. The Bear CEO said, " We called this morning to tell people we wouldn't be in". There was a deathly silence. Then in unison, the CEOs demanded an explanation. This only made Cayne more resolute. Bear had enough exposure as a clearing agent, Cayne said. He wouldn't say more. The others thought it ludicrous. Bear was holding $500 million-it was the least exposed."They're completely self-interested". Suddenly these paragons of individiual enterprise seethed with communitarian fervour. Purcell of Morgan Stanley turned beet red. He fumed, "It's not acceptable that a major Wall Street firm isn't in"

Posted by lvmreader @ 09:08 PM 2 Comments

Where do they get these figures?? Interesting toy to play with..

BBC: UK House Prices

What is interesting is when you compare the number of so called sales on bbc and the number of properties for sale in a county on it starts to make an interesting picture.. for example cheshire has 5000+ properties for sale listed on vebra, the bbc say 3584 sold between the period April to June 2007. So it really is starting to turn for the buyers... I wonder how many will be for sale next month? and how many sold this quarter??

Posted by mark @ 08:06 PM 0 Comments

$100/barrel this year, $150+ by 2012. Updated World Oil Forecasts, including Saudi Arabia

A prediction here of $100/barrel by this autumn and a steady increase to $150/barrel by 2012 are the relevant points to house prices. Basically, an interest rate of 5.75% was predicated on oil dropping back to $40-50/barrel. Sustained higher oil prices will feed through into prices and wage demands and will require significant fiscal tightening, both from central banks and the money markets. Liquidity will dry up and the cost of remaining cash soar. Asset prices (houses) must fall accordingly once buffers (when landlord and householder bank accounts run dry).

Posted by planning4acrash @ 05:20 PM 22 Comments

Analysis of Friday's rage

Safe Haven: Cramer's Sage Rage?

Even if Bernanke is strictly adhering to the Greenspan bailout script, the type of financial calamity that warrants Fed intervention has not yet come to pass. Moreover, there are other things for Bernanke to consider, many of which Greenspan never had to be concerned about. For example, the U.S. dollar is critically weak, commodity prices are no longer influenced solely by U.S. economic activity, and asset prices around the world have, albeit perhaps temporarily, gained independence from the U.S. markets. It is not as simple as saying some firms on Wall Street are hurting so it is time to start easing.

Posted by sold 2 rent 1 @ 05:03 PM 2 Comments

Don't panic South Africa - The facts are probably wrong!

moneyweb: Property prices tumble

Residential property prices have tumbled since May, but the bank's economists say there is no cause for alarm because there's probably a "bit of a problem with the data" among the factors skewing the picture. Duh! (sorry, previous posted source was incorrect!)

Posted by eyeore @ 03:34 PM 1 Comments

Laugh I nearly slit my throat

the guardian: Average English house price will top 300,000 in five years, says study

The average house price in England will rise by 40% in five years to break the 300,000 barrier, according to research published today by the National Housing Federation.

Posted by yes @ 03:33 PM 8 Comments

easy come even easier to go

Firstrung: "It's me pension, innit" Seven million homeowners say property is their pension pot

Seven million homeowners plan to use their home to supplement their pension, according to research by personal finance website study also reveals that three out of five people are currently contributing something towards their retirement. However, more than half do not think their retirement pot will be enough when they stop work. People aged between 34 and 57 are some of the most disillusioned about the size of their retirement fund. Two-thirds of this age group reckon that they won't have enough to retire on when they hang up their boots.

Posted by converted lurker @ 02:32 PM 2 Comments

Sub Prime Bust Expands....

American: News Article

Well errrm yes... but according to the press over here this doesn't mattre or does it?

Posted by orwell @ 01:39 PM 2 Comments

The Gravy Train Has Finally Been De-railed American Home Files For Bankrupcy

Just an update. Is this the mother ship or are there any advances on $750 million. There is no way back for this one.

Posted by i-cld-murder-a-blt @ 01:24 PM 1 Comments

Are borrowers coping with rate rises?

Firstrung: Despite interest rate hikes only one percent of mortgages borrowers are in arrears - CML

"Interest rates are clearly higher than many were expecting, and are set to remain so. And the greater risks inherent in sub-prime lending are resulting in significantly higher levels of repossession in that part of the market compared to mainstream experience. This impact has been underestimated in our past market data, which we have now revised. While the revisions are naturally unwelcome, more accurate market information is important. We will work to further improve data on both mainstream and specialist sectors."

Posted by converted lurker @ 01:05 PM 0 Comments

Heads rolls in the sub-prime business

BBC: Bear Stearns president steps down

A top executive at Bear Stearns has quit amid problems brought on by the US sub-prime lending market. Two mortgage funds headed up by Warren Spector collapsed in June as the funds plummeted due to high-risk borrowers defaulting on their mortgages.The collapse of the funds was big enough to set ripples through the financial markets which impacted banking shares and raised fears about a downturn in credit markets.

Posted by denzil @ 11:05 AM 2 Comments

Have your say on 5 Live this morning

BBC 5 Live: Are you still dreaming of getting on the property ladder?

Are you still dreaming of getting on the property ladder? Sorry, but it just got even harder. In five years, the average house will cost three hundred grand. That's eleven times the average salary. So what are you going do to get a house? Are you prepared to take on huge debt? Or will you rely on the bank of mum and dad, take in lodgers or share with friends. It's your call - 0500 909693 - text 85058 - email or have your say on our messageboard.

Posted by doomwatch @ 10:47 AM 2 Comments

What's happening in South Africa?

moneyweb: property prices tumble

Residential property prices have tumbled since May but the bank insists there's nothing to worry about, it's probably "a bit of a problem with the data." You've got to give 'em credit for inventive excuses!

Posted by eyeore @ 08:50 AM 1 Comments

And what exactly was this report based on?

BBC "News": House prices 'to breach 300,000'

The BBC chows down for seconds and has a side dish. Well, garbage in, garbage out!

Posted by paul @ 08:13 AM 9 Comments

The vested-interest spin machine goes into overdrive

Metro "News": House price "to soar 40%"

Those esteemed and independent academics from the National Housing Federation (the poeple who build houses) and the Council of Mortgage Lenders (the people who sell us loans to buy houses) have grouped together to produce an amazing work, based not on facts or any research but purely on wishful thinking, idle speculation and even idler sub-editors at the Metro. After depositing this one, they dusted icing on it (well sweetened it a little for the sub-editors) and polished it to a high shine. The News of The World didn't want it, allegedly remarking "We are a serious tabloid now, what will our readers think if we print this sort of thing?" But the Metro lapped it up and asked for seconds!

Posted by paul @ 08:07 AM 21 Comments

NHF's horror-scope

BBC: House prices 'to breach 300,000'

The National Housing Federation predicts house prices averaging 300K in the next 5 years. The article also contains other 2012 predictions for various areas of England. The research was carried out by Oxford Economics for the NHF.

Posted by eyeore @ 06:37 AM 0 Comments

Sunday, August 5, 2007

When the ship starts to sink guess who is the first to jump?

MSN Money: Buy-to-let landlords head for the exit

Brilliant article best line being "It isnt cool to bank on a greater fool" that just says it all.

Posted by deepak @ 05:07 PM 7 Comments

Interest rates to rise future

Sky News: Bank May Hint At New Rate Rise

With interest rates expected to rise future and hundreds of thousands coming off the fixed or reduced initial rates not very happy times to come.

Posted by deepak @ 04:40 PM 4 Comments

BBC says foot 'n' mouth causes Property Crash

BBC News: Foot-and-mouth hits house prices

A conspiracy theorists dream and from the BBC as well, if you do a search of google news using the terms 'Pirbright' you can find all sorts of gems especially from offshore newspapers. The virus is apparently the 1967 one licensed for experimentation and 'Pirbright' is less than 3 miles from the infected farm!!! As for house prices being linked to Foot 'n' Mouth then the BBC have finally been revealed as having theirs well and truly in it!

Posted by enuii @ 04:14 PM 2 Comments

Brits returning home with tail between legs

Firstrung: Currency specialist sees a return to Sterling booming

This year has seen the most dramatic increase in the numbers of people bringing money back to the UK as the first wave of the original baby boomers who bought overseas are now choosing to downsize their foreign properties as they get older.

Posted by converted lurker @ 11:21 AM 5 Comments

Has this 'income' included 'Mewing'? Think so...

Firstrung: Affluent classes see earnings grow twice as fast as prices

The "affluent" or so called "middle" classes have prospered over the past decade, according to research from Halifax Financial Services. Earnings of these households have risen by 42.8% over the past decade, more than double the 18.2% rate of inflation for this group. Earnings for this group have also risen by more than that for the typical worker over the decade (42.8% against 39.5%)...

Posted by converted lurker @ 11:19 AM 3 Comments

Hit for six ?????

Times Online: Bank to signal need for one more rate rise

THE Bank of England is expected to signal this week that interest rates will need to go up one more time to 6% to be sure of meeting the official 2% inflation target. One more time ? We will see !

Posted by onyerhike @ 10:35 AM 0 Comments

NZ Mortgage stress

Stuff Website NZ: Housing Stress in NZ

... and you guys thought you had it bad in the UK. If anyone says high prices are due to land shortage then why is a country with twice the land mass of england and 1/15th the population suffering from the worst house prices on the planet. Because like everywhere the housing bubble has nothing to do with fundamentals and everything to do with hot air, cheap credit, too many investors, property friendly taxes etc etc etc.

Posted by squirrell @ 04:58 AM 0 Comments

Saturday, August 4, 2007

It never rains but it pours

Times: KKR unable to sell any debt for its 9bn Alliance Boots acquisition

Kohlberg Kravis Roberts was forced to scrap plans to sell even the smallest portion of debt backing its 9 billion acquisition of Alliance Boots yesterday after panicked investors refused to buy the high-risk loans. In another sign of turmoil in the credit markets, DaimlerChrysler came to the rescue of Cerberus by agreeing to lend the American private equity firm some of the cash to take Chrysler off its hands after the banks refused to lend money for the sale last week.

Posted by uncle chris @ 09:13 PM 6 Comments

Gordon Brown's housing 'strategy'

The Times: Housing strategy? I'd call it futile fiddling

Housing is a sprawling minefield of a territory: dangerous frontier country where politics meets economics meets lifestyle choice. Anxiety, insecurity and greed are never far beneath the surface, and the unwary politician quickly finds himself dabbling not in bricks and mortar, but in our hopes and dreams, our pension plans, our worries about retirement and our ambitions for our children. Here, angels fear to tread.

Posted by propertysnake @ 08:09 PM 0 Comments

Funny video by upset former hedge fund manager

CNBC News Video: Cramer: Bernanke, Wake Up

I don't think this was supposed to be a comedy but it had me in stitches. Must see material about state of American economy.

Posted by quiet guy @ 01:48 PM 11 Comments

Myth of Middle Class Inflation

The Grauniad: Affluent inflation myth dispelled

They may whine about ever-rising school fees, and the strain of running the merc - but the truth about 'middle class inflation' is very different.

Posted by happy? @ 12:57 PM 2 Comments

Why most people want to see fewer buy-to-let investors in their region

Guardian: Why most people want to see fewer buy-to-let investors in their region

ublic opinion is turning against buy-to-let, according to the first national survey of attitudes towards property investors. Six out of 10 people believe that buy-to-let reduces the amount of affordable housing for those wanting to buy, and more than half of the public believe that landlords should be more heavily regulated by the government.

Posted by doomwatch @ 12:52 PM 6 Comments

Ah - that's what happened in US yesterday

Telegraph: Bear Stearns triggers Dow crash

Investment bank Bear Stearns precipitated one of the worst market slumps of the year yesterday after admitting that the US credit markets were the worst it had seen in more than two decades. The Dow Jones Industrial Average had been trading just a shade lower when chief financial offer Sam Molinaro compared the current crisis on Wall Street to the 1987 stock market collapse, the Asian debt crisis of the 1990s, the collapse of hedge fund Long Term Capital Management and the recent dotcom bubble.

Posted by uncle chris @ 10:56 AM 7 Comments

Legal Action Against American Home Mortgage Investment Corporation - Law News

Law Fuel.Com: On Line Law Article

It appears from the class action against it, that American Home Investment Mortgage Corpn.:- Misrepresented and failed to disclose, (i) AHM's credit related expenses were increasing dramatically which were depressing its earnings and threatening its historical level of dividends (iii) AHM was experiencing increasing difficulties in selling its loans and was required to decrease prices, reducing margins and profits (iv) AHM was overstating its financial results...

Posted by orwell @ 08:48 AM 0 Comments

Tut tut tut

FT: Buy-to-let chancers scrutinised

Concerns are growing that many amateur landlords have fraudulently used residential mortgages to fund their buy-to-let properties. These so-called disguised buy-to-lets occur when landlords typically those with a handful of properties pose as owner-occupiers to obtain cheaper and more flexible residential mortgages on property they have little or no intention of living in.

Posted by onyerhike @ 08:36 AM 1 Comments

Bear Stearns Defends Its Financial Strength

Wall Street Journal: News Article

This is hardly a comic, and the comments it makes are worrying: "...In addition to the problem with the hedge funds, Bear is suffering from its leading position as an underwriter and trader of mortgage-backed securities...the company's "revenues and profitability would be especially affected if there were an extended downturn in those markets..." I mean how can you make such bad decisions? This can only be someone having the US equivalent of an Oxbridge Degree in vase decoration that is responsible for this.........

Posted by orwell @ 01:22 AM 0 Comments

Friday, August 3, 2007

Tick Tock, Tick Tock.....

CreditFlux: Incomplete corporate credit deals double in a fortnight

Baring Asset Managements analysis of industry figures has revealed that, in the last fortnight, an additional 13 corporate loan or bond deals have been postponed or reduced, representing just under $43 billion since 20 July. The total number of deals pulled since 22 June now stands at 46. These deals represent over $60 billion that has been pulled from the corporate credit markets in just over a month. No pulled deals were counted in the whole of last year.

Posted by lvmreader @ 11:03 PM 1 Comments

Now the skeletons start surfacing

CreditFlux: XL Capital revises CDO exposure in SEC filing

If you can remember Enron back in 2001, you may remember JP Morgan and Citigroup (amongst others) claiming that their exposure was limited to e.g. only USD100million. Then a week later, it turned out it was USD200m, then USD400m and so on, until they fessed up to USD2.1bn. The same pattern is repeating itself here. The University of California just settled a USD7.2billion suit with a group of Enron lenders 6 years later. Expect this subprime mess to be in court up to a decade later.

Posted by lvmreader @ 10:52 PM 4 Comments

Goodnight suckers

Reuters: Wells Fargo, other US lenders curb mortgage loans

They think it's all over - it is now.

Wells Fargo & Co,Wachovia Corp and other lenders are limiting mortgages to some of their more creditworthy borrowers as worries about U.S. homeowner defaults widen. Wells Fargo, the second-largest U.S. mortgage lender, said it is curtailing issuance of "Alt-A" home loans through brokers, while Wachovia has stopped entirely. Wachovia also said one lending unit has temporarily halted its Alt-A production. Lenders are making fewer home loans once thought to be safe because investors now perceive those loans to be risky. The changes could worsen the U.S. housing slump by putting home ownership beyond the reach of a larger number of Americans.

Posted by lvmreader @ 10:46 PM 1 Comments

Will House Prices Crash? Will House Prices Crash?

Useful summary of what is likely to happen to house prices: why they can only fall.

Posted by titch @ 10:04 PM 2 Comments

American Stocks Market Takes Another Paddling..........

ABC NEWS: News Article

Well, It was to be expected wasn't it? And Bear Sterns CFO is saying its trhe worst he has experienced in 22 years... That is only at the moment as well...

Posted by orwell @ 09:52 PM 0 Comments

The writing on the wall..

Reuters: UPDATE 3-Bear Stearns, brokers debt protection costs rise

A widening CDS means that people want more money to insure against the possibility of an entity going under. Exactly the same as if you have too many car crashes - the insurance company jacks up your premium. All the big boys are being squeezed now. Hold on to your lunch, this ride is going to get a whole lot uglier.
"The tone of the market is pessimistic and apprehensive, and you've got people who are betting against them and it makes it hard to take a longer-term view," said Scott MacDonald, director of research at hedge fund Aladdin Capital Management in Stamford, Connecticut.

Posted by lvmreader @ 09:42 PM 3 Comments

Wall Street Plunges On Credit Concerns

ABC News: Stocks Fall Sharply Amid Credit Fears

Wall Street plunged a new Friday, hurtling the Dow Jones industrial average down more than 280 points after comments from a Bear Stearns executive reinvigorated the market's fears of a widening credit crunch. The huge drop was a fitting end to two extraordinarily volatile weeks on Wall Street and followed back-to-back triple digit gains in the Dow. This time, the catalyst for a sharp skid was Bear Stearns Cos. Chief Financial Officer Sam Molinaro, who described conditions in the credit market as the worst he'd seen in more than two decades.

Posted by jeremiah @ 09:27 PM 0 Comments

Workers upbeat despite American Home Mortgage closing

Newsday: News Article

It seems that about 30 minutes ago they closed down.

Posted by orwell @ 08:59 PM 1 Comments

Pack of cards falling away

BBC News: US Mortgage lender closing down

After Bears and sterns next in line. Are we linked to American market read on for more. Today new job creation figures from America came and they start at 1400 hours our time. See the fall. After all day fluctuating its just down hill. So if it is happening there now. It will be here tomorrow.

Posted by deepak @ 08:07 PM 7 Comments

And supposedly UK Banks are safe? Maybe IceSave or ICICI would be a better bet?

Forbes: RBS Skirts Subprime Troubles

Royal Bank of Scotland's report on its half year earnings was already half the tome that came the previous day from Barclays, a slightly smaller British rival with whom it is battling to buy Dutch bank ABN Amro. Perhaps size matters, since RBS's earnings didn't please investors as much, either.

Posted by david20040_0 @ 06:34 PM 3 Comments

Lenders get tough on debt-ridden Britain

Times: News

Well it was about time wasn't it? This on the last years IR's as well. Nothing gives me encouragement that the forthcoming year or two will be any better. In fact it may well be a lot worse, possibly even carnage. It looks like giving the central bank independence was a plan by those with vested interests to take back the land hard fought for by our ancestors....

Posted by orwell @ 06:02 PM 0 Comments

Savills is sticking to its forecast The UK property market is not likely to see prices fall in 2008, according to the latest forecast

Savills is sticking to its forecast of 7% for house price growth in 2007 and predicts 5% growth for 2008.

Posted by eyeore @ 05:38 PM 0 Comments

"These are not the droids you're looking for"

Bloomberg: U.S. Housing Is Among `Biggest Bubbles,' Rogers Says

The U.S. subprime-market rout that wiped out $2.1 trillion from global share values last week has ``got a long way to go,'' But the damage is often played down.

Posted by alan @ 03:59 PM 0 Comments

Now that a credit market freeze has crashed private equity firms' dealmaking party, Bear Stearns Cos. and Lehman Brothers could be the investment banks left with the biggest hangovers.

washington post: LBO exposure may hit Bear Stearns, Lehman

If the debt from the deals gets stuck on those banks' balance sheets over a protracted period, that could limit their ability to finance other deals, as well as crimping other activities like trading. Bear Stearns is the investment bank most exposed to private equity activity, according to an Alliance Bernstein research note, with about 5.1 percent of total revenue coming from LBO firms, known on Wall Street as financial sponsors.

Posted by chris :-)) @ 02:27 PM 0 Comments

Poll 'proves' BTLers are just scapegoats Buy-to-let investors are 'not adding to UK's housing crisis'

Britain's biggest BTL company have surveyed 500 of its members to determine whether buy-to-leave-empty landlords are worsening our housing woes. They claim the results prove their innocence by pointing out that only 3.1% of their landlords admitted to deliberately leaving properties empty. The key word here is "admitted" and more than 3% of the targetted LLs didn't respond. And I do wonder how the 500 included in the survey were chosen... the article doesn't mention random selection...

Posted by cynical @ 01:02 PM 0 Comments

Now French immigration minister Brice Hortefeux has estimated there are up to 400,000 illegal migrants in France many hoping to get to Britain.


Police believe that tighter security around Calais the traditional magnet for migrants seeking to sneak across the Channel has led people-smugglers to look for new routes to Britain. Before it was shut in 2002, some 67,000 migrants passed through the Red Cross camp at Sangatte. Now French immigration minister Brice Hortefeux has estimated there are up to 400,000 illegal migrants in France many hoping to get to Britain. Immigrants are rushing into Cherbourg, a police spokesman there said yesterday. It could well become the new Sangatte. We are making every effort to improve the situation but arrests are made almost every day.

Posted by chris :-)) @ 12:22 PM 31 Comments

It's Official - Repossessions up 30% on last year

BBC News: Home repossessions 'on increase'

I reported this 6 months ago and now it's 'official' and out in the open as overextended borrowers get their collars felt by the lenders.

Posted by enuii @ 11:32 AM 25 Comments

Gradual unwinding of imported deflation.

Independent: Cheap fashion: the trend may be over

Prices have fallen dramatically in the past decade as products are sourced from countries with low labour costs, but clothes cannot carry on getting cheaper. Verdict is forecasting that price inflation will creep back into the market by 2010, bringing an end to 12 years of continuous deflation. Womenswear is expected to bear the brunt of this, with average prices forecast to increase by 4.7 per cent between 2008 and 2012.

Posted by tyrellcorporation @ 11:07 AM 0 Comments

Repossessions rise 30%

CML: CML arrears and possessions statistics

Early signs of distress are evident - looks like an inflection point has passed even though many borrowers are yet to face the full rate impact. Its a pity the BTL element is not identified!

Posted by ao @ 10:55 AM 0 Comments

up 17.6 % over 6 months

Reuters: Home repossessions up 30 percent

The number of home repossessions rose by almost an annual 30 percent in the first half of the year. Repossessions rose 17.6 percent on the previous six months to 14,000

Posted by acidrob @ 10:09 AM 1 Comments

Those poor BTLers again !

TheTimesOnline: How landlords can boost their profit

Isn't it nice that someone has thought to write an article to help the poor landlords to increase profits. Most ( I mean all) of the tips in the article are so damn obvious, that it is not worth reading.

Posted by onyerhike @ 09:30 AM 1 Comments

Crisis? I can't even sell me boozer!

The Independent: Pubs giant calls off property deal amid debt crisis

Oh how fast is the change from 'Oh, how much is your house worth?' to 'Oh my, you seem to have the investment equivalent of leprosy!'

Posted by freewheelin' franklin @ 08:36 AM 0 Comments

Insolvencies & Repossessions Rising Sharply

BBC News: Number going bust set to increase

Official statistics are expected to show an increase in the number of people becoming insolvent in England and Wales. Figures from April to June are likely to be higher than the record level of 30,075 people who became insolvent in the first three months of the year. Experts say rising interest rates have put people under even more pressure. Separate data is also expected to show a rise in the number of homeowners having their houses reposses Lenders becoming less likely to accept IVAs

Posted by scaredeitherway @ 03:13 AM 1 Comments

Thursday, August 2, 2007

20% of all housholds face a 10% insurance premium hike

BBC News: Norwich Union in 10% premium hike

"Norwich Union is to raise domestic property insurance premiums by an average of 10% from next week, the BBC has learned. The firm, the UK's largest household insurer, said that the hike was not linked to the recent floods and that the timing was coincidental." Yet one more burden on householders.

Posted by gone west @ 11:22 PM 4 Comments

If you thought for one second the HPC in the US could be 'contained', read this...

Bloomberg: Subprime Defaults Blamed for U.S. Earnings Setbacks

Railroads, chemical producers and insurance companies are blaming the worst U.S. housing slump in 16 years for their earnings woes. ``The subprime slime is oozing,'' said Gary Shilling, president of A. Gary Shilling & Co. in Springfield, New Jersey, who correctly predicted the recession in 2001. ``As home equity evaporates, that takes out the foundation of strong consumer spending growth, which has been the mainstay of the economy.''

Posted by tyrellcorporation @ 10:46 PM 2 Comments

...and another one bites the dust!

Bloomberg: Accredited May Face Bankruptcy, Merger in Doubt

Accredited Home Lenders Holding Co., the subprime mortgage company being acquired by Lone Star Funds, cast doubt on the sale and said bankruptcy is possible. The shares lost more than a third of their value.

Posted by tyrellcorporation @ 10:33 PM 0 Comments

That was quick! - everything was fine just a few days ago...

Bloomberg: American Home Mortgage to Close as Demand Collapses for Loans

American Home Mortgage Investment Corp. plans to shut down, becoming the second-biggest residential lender to fail this year. Tomorrow will be the last day for most employees, Chief Executive Officer Michael Strauss told the staff in an e-mailed memo obtained by Bloomberg. ``The market conditions in both the secondary mortgage market as well as the national real estate market have deteriorated to the point that our business is no longer viable,'' Strauss wrote today.

Posted by tyrellcorporation @ 10:28 PM 3 Comments

Oh dear - the Yanks are even hailing a severe recession!!

Boston News: The crash that could come

When historians sort out what could well be the recession of 2007-08, they will wonder why regulators did not act before the speculative binge...

Posted by nearly30 @ 09:32 PM 7 Comments

no subprime crisis

interactive investor: Credit scare is no crunch

Article by a Forbes Magazine columnist saying subprime not really a problem, being talked up by press purely because there is no real bad news around. I have noted over the last couple of days refences to credit spreads being at their widest for 2 years, 4 years etc which has struck me as being not terribly scary - I was thinking we were more in worst since 1928 or 1987 kind of area.

Posted by mybrainhurts @ 07:23 PM 10 Comments

American Miserepresentation...


Those Sub Primes are really going to come back to haunt their owners. It would appear that the iinvestors thought they were a no lose dead cert... Now where have we heard that before? Barings? BCCI? Enron?

Posted by orwell @ 07:05 PM 1 Comments

The carry trade, variously estimated at between $20 billion and $1 trillion, is perhaps the world's biggest bet

Reuters: Yen to gain as leverage dominoes fall:

The great repricing of risk now happening in global markets will undermine the lure of the yen carry trade, supporting the Japanese currency and hitting higher yielders like the New Zealand dollar.

Posted by chris :-)) @ 04:47 PM 1 Comments

Credit panic

The Telegraph: Markets in grip of sub-prime confusion

Rumours swirled around trading floors of companies poised to collapse, creating a climate of fear that official denials did little to ease.

Posted by paul @ 01:46 PM 1 Comments

Evidence of debt problem

reuters: Eight million adults in serious debt

Evidence for the argument that excesss debt will lead to HPC... Some 8.2 million people, equivalent to 18 percent of the adult population, have 10,000 pounds or more of unsecured debt

Posted by ds_t @ 01:29 PM 17 Comments

UK interest rates stay at 5.75%

BBC News: UK interest rates stay at 5.75%

No surprises here!

Posted by davethebox @ 01:07 PM 1 Comments

Well, there's a surprise !

The Telegraph Online: Bank holds interest rates at 5.75pc

Never mind, the only way is up for inflation at the moment so they can make the right decision next month, instead.

Posted by onyerhike @ 12:17 PM 0 Comments

However, concerns about higher global interest rates have changed the way many firms and lenders view the future

bbc: Debt worry halts 4.5bn M&B deal

Pub chain Mitchells & Butlers (M&B), owner of the All Bar One and Harvester brands, has delayed a 4.5bn property deal, citing debt-market volatility.

Posted by chris :-)) @ 11:50 AM 0 Comments

What might a hedge fund manager order to ease the pain of, er, liquidation? In lieu of $800 cognac, perhaps some Cold Duck or Two-Buck Chuck

business week: When Hedgies Drink Box Wine, Thats News

This just in: Hedge fund managers like to drink expensive booze, Dan Dorfman revealed Wednesday in the New York Sun. He reports that six hedgies showed up at Tse Yang, a Chinese restaurant in New York, and spent $4,800 on a single round of a rare cognac. This kind of thing apparently happens a lot at Tse Yang, and, presumably, elsewhere. Its an ego trip, the eaterys captain explained. But given the troubles afflicting the hedge-fund industry lately

Posted by chris :-)) @ 10:53 AM 0 Comments

Banking bailout Germany rescues subprime lender

Unfortunately, this is subscriber-only, but even from what I can see, this is worth posting. Key quote is: "Jochen Sanio, head of Germanys financial regulator, [...] warned of the worst banking crisis since 1931.

Posted by dohousescrashinthewoods @ 10:42 AM 11 Comments

Halifax assure us the market is slowing

BBC: House prices rise again in July

House prices went up by 0.7% in July according to the Halifax. Halifax said that this is the fourth straight month in a row that house prices inflation (HPI) has been less than a 1% indicating the market is slowing.

Posted by denzil @ 09:45 AM 7 Comments

Credit markets leave banks saddled with 250bn of debt

Times: Business News

Oh dear... Still look on the bright side, its only about one fifth of the UK's debt as a percentage of GDP! Why don't we declare ourselves bankrupt? Oh and by the way, the restaurants were very busy last night, a Wednesday remember, so if IR's don't go up this week then it will be next month. And I still predict them to reach 6.5% by the end of this year.

Posted by orwell @ 08:49 AM 2 Comments

The Crash is postponed!

The Scotsman: House prices rise in July

According to Halifax house price survey house prices rose o.7% in July which, according to Them, prices the average house at 198,915. Bang goes my dream of becoming a homeowner! (This couldn't just be VI spin, could it?)

Posted by depressed @ 08:37 AM 6 Comments

Ambrose Evans-Pritchard on top form

The Telegraph: When will gold go ballistic?

"We are not there yet. Timing is not my fort, but 2008 looks ripe. Watch the Spanish housing market. Watch the French trade data. Watch Chinese inflation. And, of course, watch the US jobs market the bogus prop to the alleged US recovery (on that, more later). "

Posted by sold 2 rent 1 @ 08:07 AM 3 Comments

September hike much more likely

The Telegraph: Soaring output prices fuel inflation fears

"Consequently, we continue to look for a September Bank of England rate hike with a good chance that rates will be at 6pc around the turn of the year," he added.

Posted by sold 2 rent 1 @ 07:33 AM 1 Comments

Japan is likely to face pressure to address concerns about the impact of the yen carry trade on the export competitiveness of its Asia-Pacific Economic Co-operation neighbours when finance ministers from the 21 Apec economies meet in Australia on Thursday Japan faces carry trade scrutiny

The yen carry trade, where investors borrow low-yielding Japanese yen to buy into assets in currencies that offer high returns, has been one of the main factors behind a weakening of the yen to record levels against currencies such as the US dollar and euro this year. The yen has strengthened in recent weeks amid turmoil in global markets and what some see as an unwinding of the carry trade

Posted by chris :-)) @ 03:37 AM 1 Comments

We need to start planning for "unexpected shocks"

Global Guerillas: Resilient Communities as an export?

"As I point out in Brave New War, resilient communities are a necessary step to survive unexpected global system shocks (vicious black swans that rapidly sweep through our newly interconnected and tightly coupled grid) over the next decades. The reduction in complexity made possible by a bottoms up approach not only ensures local success in the face of system failures, it makes it possible for the entire system to re-establish itself faster and with less long term damage."

Posted by lvmreader @ 03:32 AM 2 Comments

Renewed fears over problems in the credit markets saw investors dump risky assets early in the session.

ft: Carry traders stage tactical retreat

David Woo, at Barclays Capital, said swings on the worlds equities markets were likely to remain the driving force behind currency moves. He said if equities continued to perform weakly, risky currencies were likely to perform poorly, in particular commodity linked currencies such as the Australian and New Zealand dollars.

Posted by chris :-)) @ 03:31 AM 0 Comments

Long-awaited Home Information Packs have finally been launched today with estate agents warned they risk losing their jobs if they encourage home sellers to bend the rules

mail: Home packs - no tricks and no escape

From today all homes of four bedrooms or more which go up for sale on the open market must have a Home Information Pack, known as a Hip, which contains an evaluation of the property's energy efficiency, evidence of ownership, information from local searches, and copies of any planning or building consents

Posted by chris :-)) @ 03:30 AM 2 Comments

TOYMAKER Fisher-Price has issued a worldwide recall of almost one million Chinese-made toys because their paint contains excessive amounts of lead.

herald: Fisher-Price toys recalled in lead scare

Fisher-Price and the commission advised parents should keep suspect toys away from children and contact the company. Mr Allmark said the recall was "fast-tracked", which allowed the company to quarantine two-thirds of the toys before they even made it to shop shelves.

Posted by chris :-)) @ 02:33 AM 0 Comments

US investment bank already reeling from the American sub-prime crisis, said that it had halted redemptions in another of its hedge funds as nervous investors tried to pull their money out.

TELEGRAPH UK: Credit markets leave banks saddled with 250bn of debt

Leading investment banks on both sides of the Atlantic are saddled with almost $500 billion (246 billion) in agreed leveraged loans that they are unable to parcel out to other investors. New figures from Dealogic reveal that in Europe the banks are struggling to clear a backlog of $208 billion worth of leveraged loans that they would normally have sold on through syndication. In the United States, the figures also show that investment banks are stuck with $269 billion of agreed loans that they are unable to syndicate.

Posted by chris :-)) @ 02:11 AM 0 Comments

Soaring default and foreclosure rates are not limited to subprime and Alt-A mortgages. Countrywide the largest mortgage lender in the US admitted last week that the same goes for prime home loans. This has triggered the most aggressive tightening of m

ft: More scalps for mortgage belt

Signs that the crisis in the US subprime mortgage market is spreading to higher-quality mortgage loans contributed to a dramatic sell-off in credit and equity markets this week, as lenders reported significantly lower second-quarter earnings and investors ran aground on mortgage-related losses. The latest bout of mortgage market malaise centres on so-called Alt-A home loans, in which late payments and defaults are running at four times the historical rate

Posted by chris :-)) @ 12:51 AM 0 Comments

Haircuts are increasing because investment banks generally are uncomfortably long credit risk through bridge loans to private equity buy-outs, repo financing to hedge funds and warehouses for CDO managers, Mr King says.

ft: Liquidity alarm bells sound

When an ordinary sounding Australian mutual fund run by Macquarie Banks asset management division warned investors they could lose up to 25 per cent of their money this week it was shocking for two reasons. First, it was a retail fund, so the investors were everyday people. Second, their money had not been anywhere near US subprime mortgages, which have been at the centre of recent market turmoil.

Posted by chris :-)) @ 12:16 AM 0 Comments

The sharp credit market reversal has in turn prompted a flight from risk. Stocks have slumped, especially financials, and Treasury yields have fallen. A number of credit hedge funds, carriers of the virus, have blown up around the world

ft: Credit market contagion

The subprime virus has gone global. Starting as a localised outbreak in the US market for risky subprime mortgages, it has spread into the supposedly safer Alt-A tier and even into prime mortgages. Meanwhile, it has crossed into other loan species particularly leveraged lending, where ballooning spreads have rattled the market and left banks holding big chunks of debt.

Posted by chris :-)) @ 12:13 AM 0 Comments

Wednesday, August 1, 2007

Is he or isn't he ?

The Telegraph online: MPC decides on fate of millions

The committee's 123rd decision on interest rates could be its most important one yet, reports Edmund Conway My gut feeling is they will wait - even though there are lots of arguments for an increase.

Posted by onyerhike @ 07:36 PM 9 Comments

There really is very little to pursuade me that another rate hike isn't needed asap...

BBC: Oil price rises to all-time high

Oil prices have climbed to a record high of $78.71 a barrel amid worries about whether oil supplies can meet global demand. The price of a barrel of US light, sweet crude passed the previous high of $78.40 a barrel, reached in July 2006.

Posted by tyrellcorporation @ 07:34 PM 18 Comments

Norwegian house prices do crash in the woods (=:

e24 Norway: Boligkrakk

Don't go to this link unless you speak Norwegian - I just wanted to tell you that after years of astronomical growth, some areas of Norway experienced 10% losses last month - even the capital Oslo caught a summer chill. The average fall was 2,2 %. The word "Boligkrakk" = "House price crash" was used to head the article. They have predicted a really uncomfortable Autumn. Watch this space. Just to point out- this is happening in an economy where they are crying out for more workers and where interest rates are lower than in the UK.

Posted by onyerhike @ 07:20 PM 5 Comments

HBOS profits plunge on mortgage declines

Tmes: Business News

Well first about 4 months ago they called a massive fall and now more... Will there be anything left of the mighty? Should have thought twice about lending 99 times their salary to all the spivs in London boys... (and girls).

Posted by orwell @ 06:08 PM 1 Comments

As mortgage lending has stalled over recent months, bank stocks have slumped-down nearly 20 per cent from their highs in February. This makes them the worst performing bank stocks in Europe this year. Did someone say Takeover

irishpropertynews: Will the banks go bust in a property slump?

IN the 1930s, the bank robber Slick Willie Sutton was once asked why he robbed banks. Sutton simply replied, because thats where the money is. What I love about his response is that he so completely missed the point of the question.

Posted by chris :-)) @ 06:02 PM 0 Comments

said it will wind down the funds within the ``shortest possible time frame'' because of a plunge in prices for collateralized debt obligations, notes backed by other bonds, loans and their derivatives Oddo to Shut Three Funds `Caught Out' by Credit Rout (Update2)

Oddo & Cie, a French stockbroker and money manager, plans to close three funds totaling 1 billion euros ($1.37 billion), citing the ``unprecedented'' crisis in the U.S. asset-backed securities market.

Posted by chris :-)) @ 05:28 PM 0 Comments


Bloomberg: U.S. Stocks Retreat, led by Homebuilders, Banks; Beazer Plunges

[...] European and Asian stocks also sank, extending a rout that wiped out $2.1 trillion last week from global equity markets. National benchmarks slid in all 17 western European markets that were open today, while Hong Kong's benchmark lost 3.2 percent. [...] ``It's getting very ugly,'' said Michael Nasto, senior trader at U.S. Global Investors Inc., which manages $5 billion in San Antonio. ``If Beazer goes down, we're going to be hurting.''

Posted by aloha @ 04:48 PM 0 Comments

more pain on stretched home owners

Telegraph: Premiums set to rise as companies pay out 2.5bn

With inflation and floods, how much longer can the average person cope with the ever increasing spiral of costs? I know this is an oldish article, how much must people take before the crash can start?

Posted by mark @ 04:31 PM 1 Comments

IR to 6%, then?

Reuters: UK pay inflation picks up to 3.6 pct in July

British take home pay rose an annual 3.6 percent in July,

Posted by alan @ 04:21 PM 1 Comments

French second homes under threat!

Telegraph: 10 flights to France at risk as O'Leary takes on BAA

Our love affair with second homes, particularly in France, has seen many fulfil that dream of a Provencal farmhouse or Mediterranean villa. But the romance is about to suffer a dose of grim market reality thanks to a row between Ryanair and Stansted's Spanish owners, Ferrovial. Having paid 10.1bn for BAA, which operates Stansted, its new owners have also inherited a 4bn project to build a second runway and terminal at the airport.

Posted by tyrellcorporation @ 04:20 PM 0 Comments

Next Big Mover Down

CNN: Beazer Homes posts loss after charges

Inventory, abandonment of land options cost the homebuilder as third-quarter revenue tumbles 37%. Beazer Homes USA Inc., facing a deteriorating U.S. housing market and federal investigations into lending practices, posted a quarterly loss Thursday as the builder took charges for inventory and goodwill impairments and abandonment of land option contracts.

Posted by chris :-)) @ 03:55 PM 0 Comments

Rightmove Rattled!

Property Snake: Property Snake At War With Agents.

In response to a number of requests from estate agents, we have had to remove all previous listings from our site. We have replaced these with listings sourced from a new location, however we are unable to provide images or direct links anymore. We are disappointed to have to do this as it undoubtedly detracts from the value of the site, but we have been left with no choice.

Posted by yoyo1 @ 01:43 PM 23 Comments

Brilliant! Lenders will have to move 'sneaky-fees' from the back-end of a mortgage arrangement to the front-end setup fee - A great barrier to entry!

BBC: Mortgage exit fees on scrapheap

Mortgage lenders are scrapping exit charges, levied when a home loan is paid off, following pressure from the Financial Services Authority (FSA). HBOS, which includes the Halifax, has become the latest lender to scrap mortgage exit fees.

Posted by tyrellcorporation @ 01:22 PM 1 Comments

In the midst of a global boom

ft: Global wealth will act as an economic shock absorber

The global economy is in the midst of the greatest boom of all times. It started when the cold war ended, leading to an unprecedented period of free trade. It really took off after China joined the World Trade Organisation on December 11, 2001.

Posted by chris :-)) @ 01:21 PM 3 Comments

UK Manufacturing grew at its fastest pace in three years in July

FT: Manufacturers shrug off rate rises

UK manufacturing grew at its fastest pace in three years during July shrugging off previous interest rate rises. The MPC will be very wary of the fact that producers are increasing prices sharply to offset the soaring cost of raw materials.

Posted by denzil @ 01:16 PM 2 Comments

Lender pulls plug as US loans crisis spreads to prime sector

Times: Business News Article

There's no Sub Prime 'Industry' over here so its ok...

Posted by orwell @ 12:03 PM 0 Comments

View of the day: Credit worries spread to equities

FT (On Line).: Breaking News

Well, It does look as if the problem is spreading............

Posted by orwell @ 10:36 AM 0 Comments

What's that popping sound? FTSE falls sharply as credit fears return

London equities fell sharply in opening trade on Wednesday, tracking overnight losses on Wall Street and in Asia on returning fears about the implications of the US subprime credit crisis.

Posted by dohousescrashinthewoods @ 09:10 AM 13 Comments

Sub-Prime problems cross the pond

Reuters: Bookies see 2 pct fall in European benchmark indexes

European stock indexes are forecast to shed 2 to 3 percent on Wednesday,echoes sharp overnight falls in global equities, as concern worsens over the extent of the U.S. subprime mortgage sector crisis.

Posted by alan @ 08:30 AM 0 Comments

America sees what Britain doesn't!

Capital News 9: Housing slump hits capital region

An all too common story from America about good folks who can't sell despite dropping their prices. What is interesting in this article is a comment made by Tom Marks of Coldwell Banker in Schenectady: "We sold property too high. We took the prices too high. And the real estate market was created by the realtors," Well, what can I say! At least our cousins across the pond can see (with hindsinght) what the problem was!

Posted by still waiting @ 06:41 AM 0 Comments

But the important question is whether the sudden seizing up of the speculation machine will spread to the real economy and push it into recession. We may soon know the answer. World economy on the precipice?

World economy on the precipice? The world economy has been floating on a sea of cheap credit for much of the present decade. The sharp falls on global stock exchanges last week may have marked the moment when the financial markets realised this era is coming to an end.

Posted by chris :-)) @ 03:25 AM 0 Comments

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