January 2008 Archive

Wednesday, January 30, 2008

More banking sub-prime losses - inbound

Bloomberg: S&P Lowers or May Cut $534 Billion of Subprime Debt

``If you're holding a AAA piece and it's now downgraded to AA, you might have to write it down, even if you're holding it for an investment,'' . ``The longer it goes on and the higher the credit rating of the instrument downgraded, the wider the pain.''

Posted by alan @ 11:23 PM 2 Comments

Standard & Poor's Ratings Services is considering slashing its rating on more than $500 billion of investments tied to bad mortgage loans, the ratings agency said Wednesday.

seattlepi.nwsource: S&P mulls $500B in mortgage downgrade

The massive downgrade would threaten a broad swath of the world's finance industry, S&P said, ranging from Wall Street's trading desks to regional banks to local credit unions. &P acknowledged the potential for these downgrades to ripple throughout the world of banking and finance. Banks have already posted $90 billion in losses on these types of mortgage investments, and S&P expects losses to reach $265 billion.

Posted by dangerous trading @ 11:08 PM 0 Comments

Gordon you can't let this happen!

FT: UK housing activity slows

"The turmoil in credit markets appeared to have spread to UK households on Wednesday with activity in the housing market gumming up in December and lenders approving fewer mortgages than at any time since the mid-1990s."

Posted by trough2010 @ 10:06 PM 9 Comments

1995 Panorama Documentary

BBC Archive: Panorama Home Truths

A program broadcast in 1995 examining the last housing slump.

Posted by duncan @ 07:55 PM 1 Comments

Gold rises, stocks rise, INFLATION rises

Bloomberg: Fed Lowers rate to 3%

Well done Ben - biggest drop, cumulative, since 1990 - DON'T PANIC MR MANNERING!!!!!!!!!!!!!!!!!!!!!!!!!

Posted by bystander @ 07:44 PM 13 Comments

Aggressive move to try to keep the US out of recession.

FT: Fed cuts rates by 50 basis points

The Federal Reserve on Wednesday cut interest rates by a further 50 basis points to 3 per cent, in an aggressive move to try to keep the US out of recession. The 50 point reduction, hot on the heels of the unscheduled 75 basis point cut last week, takes the total reduction over the past eight days to 125 basis points. It reflects concern that a negative feedback loop between the financial system and the economy could be spreading from housing to other sectors.

Posted by jack c @ 07:41 PM 2 Comments

Could the Kiwi housing domino be the next to fall?

New Zealand Herald: New houses down as rate rises bite

New house approvals are down downunder as rates bite. Do the house builders know something we don't or will the reduction in supply help sustain prices.

Posted by hubbers @ 06:05 PM 2 Comments

More sneaky taxes on the way ...

Telegraph: Ministers snoop on 16m house sales

The Government has gone ahead with a deal with Rightmove, an online property search firm, to give HM Customs and Revenue [HMRC] staff access to its records of transactions. The records contain details about individual properties, including their sale price as well as any internal features and modifications that may add to their value. The Conservatives say the contract is proof ministers are planning to press ahead with changes to council tax bands despite Labour promising last year to postpone a sweeping revaluation.

Posted by uncle chris @ 04:47 PM 14 Comments

There may be trouble ahead.....

FT Alphaville: Rights issue ahead for Barclays and RBS says Citi

Just thought this would be of interest while on the subject of rights issues...... Dont suppose the Citi boys are too upset!

Posted by techieman @ 04:25 PM 3 Comments

more confirmation!!

moneysavingexpert.com webpage: House Prices Poll Result. Massive 30% sentiment swing toward house prices dropping

Voters predicting a fall: 59% of people predicted a fall (30%). Does sentiment matter? Yes, when people think prices will drop they act differently, theyre far less willing to pay higher prices, and thus theres the potential for a self-fulfilling prophecy

Posted by waitingtobuy @ 04:21 PM 0 Comments

Gold Top In?

Moneyweek: Four signs that gold has further to rise

Hold top in? Not according to this. Fed rate cut coming today? According to this, yes.

Posted by frizzers @ 03:57 PM 0 Comments

When is this tax scam ending?

Gordian: Can we claim tax relief on buy-to-let?

"Q My husband and I have recently taken out two mortgages to buy a second home for buy-to-let. As the property cost 270,000, we have a buy-to-let mortgage of 200,000 and a normal mortgage of 70,000 against our own home. Can we claim the tax relief on mortgage interest for both mortgages against the rental income? A yes, you should be able to claim tax relief on the interest on both mortgages. If the mortgage interest is more than the rental income, the calculation will create a business loss, which you can use to reduce the taxable profits of your buy-to-let property in future tax years"

Posted by confused76 @ 03:25 PM 8 Comments

wealth gap has still to go to the extreme

The Telegraph: Hedge funds: The new global super powers

But if someone has a facility for complex analysis, wouldn't the world be a better place if they deployed their talents on solving climate change or using the new science of genomics to find cures for fatal illnesses?

Posted by sold 2 rent 1 @ 03:19 PM 10 Comments

The 1980 high adusted for "real" inflation is $6,255 an ounce

Kitco: The "Real" Gold Price

An example will be useful to illustrate this loss of purchasing power. Lets assume that a recipient received $850 per month from the US government in January 1980. Using the US governments CPI, that recipient is today receiving $2,310. However, if the US government had not made any changes to the way it calculates CPI, the recipient would today be receiving $6,255. This difference can be seen in the following chart, which presents the January $850 gold price adjusted for inflation using both CPIs.

Posted by sold 2 rent 1 @ 03:17 PM 2 Comments

Evidence that the housing slowdown is becoming more severe

FT: Mortgage approvals fall to 12-year low

Mortgage approvals fell for a seventh month in December to the lowest level since the 1990s, Bank of England data showed, signalling that the UK housing market has already slowed more sharply than during the 2005 downturn.The prospect of a repeat of the 2005 soft landing in the housing market is fading fast, said Vicky Redwood at Capital Economics, adding there is growing evidence that despite the recent fall in interbank lending rates, the damage of the credit crunch has already been done.

Posted by jack c @ 02:05 PM 7 Comments

Mortgage approvals down again

BBC News: Mortgage approvals drop further

The number of new mortgages approved for home buying fell for the seventh consecutive month in December, the Bank of England has said. It said 73,000 mortgages were approved for home buyers last month, down from a revised figure of 81,000 in November.

Posted by need-a-crash @ 02:05 PM 0 Comments

Just the start!!!

Guardian: FBI investigates sub-prime crisis

Fourteen companies, including some of the world's largest banks, are being investigated over possible accounting fraud, improperly securing loans and insider trading during the sub-prime mortgage scandal.

Posted by inbreda @ 12:59 PM 6 Comments

Its all going pear shaped

Reuters: Mortgage approvals fall to record low in Dec

LONDON (Reuters) - Mortgage approvals fell for the seventh month running in December to the lowest since current records began in 1999, official data showed on Wednesday, the strongest sign yet that the housing market is slowing sharply.

Posted by sortofsilver @ 12:48 PM 0 Comments

London property: where have all the buyers gone?

MoneyWeek: London property: where have all the buyers gone?

If the property boom isn't over, why can't interior designer Kelly Hoppen sell her much-hyped Battersea flat? Merryn Somerset Webb looks at why it's case of can't buy, won't buy amongst London's wealthy.

Posted by mary @ 11:27 AM 5 Comments

Looks bad for the mortgage lenders if this becomes widespread

YouWalkAway: Just walk away from your debts

Are you stressed out about your mortgage payments? Do you have little or no equity in your home? Is your home sinking under the waves of the real estate crash? What if you could live payment free for up to 8 months or more and then walk away without owing a penny? The lender will not be able to chase you for any deficiency or loss once they foreclose. [N.B. this would not be the case in the UK] Let us help you. Unshackle yourself from a losing investment and use our proven method to just walk away.

Posted by little professor @ 10:52 AM 10 Comments

City types waste 1000 a head on steak & chips

In it for the long run?

BBC: King reappointed as Bank governor

Does this mean he will dig his heals in and do the "right" thing for the long term?

Posted by geed @ 09:49 AM 10 Comments

Breaking News: Emergency BTL industry meeting called this weekend near Heathrow

PressNewswire: UK Buy-To-Let Summit - Emergency Meeting Called Buy-to-Let Property Experts Gather in London to Assess the Impact of the UK Property Market Downturn

"An emergency meeting has been called for UK buy-to-let property experts, entrepreneurs and investors. The conference takes place at an hotel near Heathrow London on the 15th & 16th March 2008. The UK Buy-to-Let Summit organised by eConfex Ltd consists of a 2-day weekend event which will look at solutions & opportunities for the new reality of buy-to-let investment in the light of the UK property market downturn & possible recession" I am planning to storm the venue with laughing gas, attendands will need it

Posted by confused76 @ 09:36 AM 16 Comments

Secret! - nothing new hear then

BBC "News": Secret bank rescues to be allowed

Chancellor Alistair Darling is to give new powers to the Bank of England to mount secret rescue operations for banks requiring emergency funds.

Posted by dave the box @ 09:09 AM 29 Comments

A taste of things to come?

Youtube - World in Action: World in Action Part One

Brilliant programme.. there is also a part two & part three. This is the recession in the early 80's, combine this with an 1989-1992 style house price crash and you really can imagine how serious things will become in the next couple of years.

Posted by stevie dee @ 09:00 AM 3 Comments

Not suprising anymore..

Bloomberg: Fed May Cut Rate to 3%, Hold Out Prospect of Further Reductions

The Federal Reserve may lower interest rates for the second time in nine days and indicate a readiness to go further if the economy deteriorates.

Posted by stevie dee @ 08:20 AM 2 Comments

The misery caused by an over-inflated market

Daily Mail: More than 1m people could lose homes in credit crunch, warns City watchdog

"More than one million families are in danger of losing their home over the next 18 months, Britain's financial regulator warned yesterday."

Posted by becky @ 08:08 AM 6 Comments

How to Spot the Riskiest Banks

Moneyweek: Credit Default Swaps: how to spot the riskiest banks

Some useful information to help assess the risk of possibly not seeing your savings again...

Posted by cornishman @ 07:52 AM 7 Comments

Ouch!!!

ft: UBS hit by further $4bn write-down

UBS, one of the biggest casualties of the US subprime crisis, on Wednesday revealed a further $4bn in write downs on its portfolio of troubled mortgage-related securities.

Posted by stevie dee @ 07:34 AM 0 Comments

Where did all the FTBs go...

Financial Times: Bigger deposits squeeze house buyers

A first-time buyer couple who were both in the bottom 25% of earnings, bringing in 26,595 a year after tax, would now have to save the equivalent of 104% of their joint annual take-home pay, or 27,729, in order to afford the deposit, fees and stamp duty they would have to pay to buy a typical home. That 104% today compares with just 23% in the easier market of 1996. The increasing difficulty is mostly due to lenders asking for bigger deposits. RICS said the average loan-to-value ratio offered to first-time buyers fell to 85 per cent in the fourth quarter compared with 86.5 per cent a year earlier.

Posted by drewster @ 03:32 AM 2 Comments

Chief economist of Morgan Stanley says: Give me the money or the economy gets it

Financial Times: A better strategy to deal with mortgage fallout

"Fear of risks with UK mortgage-backed securities may to some extent be fuelled by an inappropriate extrapolation from securities backed by US subprime mortgages." (In other words, he thinks the UK isn't as bad as the USA.) --- "If that is the case, there is a form of market failure." (He thinks the markets aren't working. I think they're behaving very rationally, all things considered!) --- "A new government agency, not the Bank of England, could either buy or lend against the collateral of mortgage-backed securities." (Just to tide things over until the markets get back to normal, however long that might take. In the meantime can we please all carry on making shedloads of profit at the taxpayers expense?)

Posted by drewster @ 02:49 AM 4 Comments

Tuesday, January 29, 2008

Brown and his Euro Buddies to Global Combat the Credit Crunch

Politics.co.uk: Euro leaders unveil global economy blueprint

You can just smell the BS as Brown, Sarkozy, Merkel and Prodi sign a bit of paper setting out three guiding principles for addressing "turbulence" in financial markets. Darling then has the cheek to pronounce; "Because we have got very low debt levels and because we have historically low interest rates we can then support the general economic policy and take the right action."

Posted by enuii @ 10:30 PM 5 Comments

Is it me?

Rightmove: Rightmove.co.uk

Interesting graph from rightmove showing an apparent up-swing in the average monthly asking prices for January when in fact all their data shows a decline in the last three months. mmm. does appear somewhat misleading! ....or is it me??

Posted by stillwaiting @ 10:08 PM 11 Comments

Premier Wen Jiabao warned that 2008 would be

AUSTRALIAN: Economic shock hits China

HE rampant Chinese economy that Kevin Rudd and Wayne Swan are confident will help insulate Australia from the worst of the global financial meltdown is starting to falter, with Chinese leaders warning of a "most difficult" year ahead. As US President George W. Bush used his last State of the Union address to urge bipartisan support for measures to stop the world's biggest economy slipping into recession, China blamed an uncertain outlook on the financial turmoil emanating from the stressed US housing market. Severe winter storms - - are exacerbating shortages and fuelling inflation, with blackouts in half the country. The weather is contributing to economic concerns in China, where shares on Monday suffered their fourth biggest fall in 10 years

Posted by dangerous trading @ 09:37 PM 0 Comments

Frugal living brings rewards - but should you pay off your mortgage first?

CNN Money: Retired at 40

Todd and Julie have done well - only 44 and 40 and they have substantial wealth and have retired. But they still have a mortgage! $173k costing $18k a year - over 10% (this does include property taxes and it may include repayments). They have $230k in stocks so they could redeem the mortgage if they wanted. Would you borrow money on your house to invest in the stock market at the present time? Admittedly in the US there is no CGT and mortgage interest is tax deductible, so it may, arguably be a wise course of action. The financial planners consulted at the end of the article certainly think so, but surprisingly they use an 8% expected return on investments in their analysis. (or do they? according to my calculator, $380 at 8% for 12 years is $956k not $1.3M!)

Posted by paolo88888 @ 08:30 PM 1 Comments

already posted this link. but if you have missed it, and you live in Lndn, it is such a joy to read

Primelocation: The best report on the London housing market

December: the most surprising element of the prime property market in 2007 has been the speed with which market sentiment changed, from the record price growth and property values achieved in the height of the summer, to the struggling and increasingly cautious market currently being experienced not just in London but across the country. Meanwhile, the prime country sales market has seen the largest fall in prices recorded since the Index began back in January 2004. The drop of 1.3% in average prices since November comes on the back of three successive months of falling prices

Posted by confused76 @ 07:15 PM 6 Comments

A strong economy and strong employment will ENSUUUURRRRE that house prices cannot crash

Times: Retail sales slow as big ticket items plunge

Howard Archer, Chief UK and European economist at Global Insight, said: "Retail sales were particularly soft in January in the durable goods sector, which suggests that the housing market slowdown is having a significant dampening impact. "(This indicates) steady interest rate cuts by the Bank of England through 2008 and the first half of 2009. Specifically, we expect interest rates to be cut to 4.50% by the end of 2008 and to 4.00% in the first half of 2009," he said. Yeah sure. Folks lets sell pounds (the currency has already lost 14% on its trade w'd currency basket since February)

Posted by confused76 @ 04:30 PM 3 Comments

And the Times finally acknowldges the 'negative growth' issue

Times: House prices fall for first time in 30 months

"Nicholas Leeming, director at propertyfinder.com, said: "With unemployment so low and incomes still rising, we are seeing very few forced sellers. Instead, you get a stalemate between house buyers and sellers and transactions dry up. Sellers refuse to compromise on price and buyers refuse to commit while they fear higher mortgage payments" That is all nice mr. lemming, but buyers are more afraid of plunging house prices nowadays

Posted by confused76 @ 04:15 PM 4 Comments

Existing business models of some financial institutions are under strain as a result of adverse market conditions;

Financial Services Authority: FSA publishes its 2008 Financial Risk Outlook

The Financial Services Authority (FSA) today published its Financial Risk Outlook (FRO) warning firms and consumers of the risks inherent in a significantly less benign economic environment. Its central scenario identifies the following five priority risks: (1) Existing business models of some financial institutions are under strain as a result of adverse market conditions;

Posted by jack c @ 03:44 PM 9 Comments

'Distressed' sales business going well

Allsop: Residential Auction Property Investment Data

data from Allsops auctions to cheer you up

Posted by cyril @ 03:25 PM 1 Comments

People may lose confidence in financial regulators

BBC.co.uk: FSA paints grim picture for 2008

High levels of borrowing could land "a significant minority" of people in trouble in 2008, the Financial Services Authority (FSA) has warned. Its Financial Risk Outlook also said that adverse market conditions were putting the business models of some financial institutions under strain. The FSA expects that tighter economic conditions will increase the amount of financial crime being uncovered. It is also worried that people may lose confidence in financial regulators. Too late they already have!

Posted by lloyd @ 02:46 PM 0 Comments

a list of useful housing related news

cnn: Mortgage Meltdown

this list is worth a look

Posted by mark @ 02:42 PM 2 Comments

Land Grab - Spanish law that could sting you hard.

round town news: AVOIDING POTENTIAL THREATS TO YOUR PROPERTY AND WELFARE

A friend of mine recently bought a property outside barcelona, and within months a developer, bought a plot of land next to his house, stole a stretch of his land under some archaic Spanish law, in order to build an access road, under which ran the utilities cables and pipes. He now has to pay for access to his house! A property owner decides to resell his house and offers you a wonderful deal on the property, stating the reason for the quick sale is because they are returning to the UK to take care of a sick relative. What they didn't tell you is that they know that in a few months time, there will be a rubbish dump setting up shop next door. You purchase the property and get hit with a nice surprise waking up to the sound of lorries driving past you every morning and dumping rubbish.

Posted by george monsoon @ 02:39 PM 5 Comments

This months report

Land Registry: House price index for Dec 2007 - Released 29th Jan 08

The December data shows a monthly price change of -0.4 per cent and an annual increase of 6.7 per cent. This months average house price is 184,469. This months data provides evidence of a downward trend in house prices. Although the annual growth rate remains positive, this months price fall is a clear indication of a weakening market. This month is the first time since the minor slowdown in 2005 that average prices for England and Wales have experienced negative monthly change.

Posted by nopensionnohouse @ 12:59 PM 20 Comments

Big Banks to get sued over subprime?

Bloomberg: Goldman and Morgan Stanley Get Subprime Requests

"Goldman Sachs Group Inc. and Morgan Stanley, the two biggest securities firms, said they are responding to requests from regulators for information related to subprime-mortgage securities."

Posted by happyrenterz @ 12:46 PM 0 Comments

First time Land Reg goes negative since 2005

Firstrung: House prices fall by 0.4% as sales volumes crash by 21% - year on year - Land Registry

The December data shows a monthly price change of -0.4 per cent and an annual increase of 6.7 per cent. This month's average house price is 184,469. This month's data provides evidence of a downward trend in house prices. Although the annual growth rate remains positive, this month's price fall is a clear indication of a weakening market. This month is the first time since the minor slowdown in 2005 that average prices for England and Wales have experienced negative monthly change. This month's 0.6 per cent rise in London prices is greater than the average for the country as a whole.

Posted by converted lurker @ 11:51 AM 5 Comments

A&L's problems

Sky: Banking Giant Reveals Sub-Prime Hit

Alliance & Leicester has tried to reassure investors worried about its liquidity in the wake of the Northern Rock crisis. The bank says it has strengthened its funding position to the end of the year, despite a greater-than-expected 185m hit due to the credit crunch. The group has around 23.4bn in retail deposits and 8bn in deposits from commercial customers.

Posted by alan @ 11:25 AM 12 Comments

Hpi = -0.4%

Land Registry: BBC News

Not before time

Posted by phdinbubbles @ 10:57 AM 1 Comments

How Spain's banks could be the Northern Rock of Europe

MoneyWeek: How Spain's banks could be the Northern Rock of Europe

Spain's economy is in the same or worse trouble than the US and the UK. However, unknown to most Europeans, Spain's banking system is being propped up by the European taxpayer, like Northern Rock in the UK.

Posted by mary @ 10:50 AM 5 Comments

Next bank to go??

Guardian: A&L reveals further 130m credit crunch hit

Alliance & Leicester has revealed its losses from the credit crunch are much worse than earlier estimates and its chief executive David Bennett is currently off work ill. HA HA HA HA HA

Posted by inbreda @ 10:42 AM 4 Comments

Gordon Brown said its all ok......

Telegraph: Repossessed homes flood auctions

No problems here ... just your usual auction figures for a stable thriving housing market.

Posted by waitingfor hpc @ 09:03 AM 17 Comments

ECB secretly rescues Spanish banking system Spanish corporate debt is now 112pc of GDP. The current account deficit is 10pc of GDP. These are both flashing red warning signs

gata: ECB aid to Spanish banks say it matches Rock rescue Traders say the Spanish authorities are quietly turning a blind

Spanish corporate debt is now 112pc of GDP. The current account deficit is 10pc of GDP. These are both flashing red warning signs

Posted by dangerous trading @ 07:46 AM 8 Comments

The key difference is that the ECB rescue operation in Spain has been disguised.

caporal.info: The IMF has warned that this gap in the architecture of of the single currency could prove serious in a crisis

Spanish corporate debt is now 112pc of GDP. The current account deficit is 10pc of GDP. These are both flashing red warning signs

Posted by dangerous trading @ 07:33 AM 1 Comments

UK Housing Bear Market Confirmed

The Market Oracle: UK Housing Bear Market Confirmed

UK house prices slumped in the quarter to December 07, with London leading the way as momentum gathers towards the 2 year forecast for an average decline of 15% by August 2009. The mortgage banking sector has only just beginning to feel the impact of the housing slump as the number of foreclosures (repossessions) is expected to surge to a record busting 80,000 for 2008 from 40,000 last year. Northern Rock was the first to go bust, other banks will follow. But in the meantime watch out for other mortgage lenders, especially those exposed to the buy to let sector such as Paragon to be pushed towards bankruptcy, down 90% from its highs. Includes some nice graphs!

Posted by su @ 06:18 AM 1 Comments

House prices will fall by up to a tenth this year, according to one of Britain's most powerful fund managers.

mail: Price of average house 'will fall by 18,500 this year' - that's 50 a day

House prices will fall by up to a tenth this year, according to one of Britain's most powerful fund managers. Neil Woodford, of Invesco, said they are simply too high and the average home will drop 18,500 by New Year's Eve, or 50 a day. The fall may be much worse in some parts of the country, warned the 47-year-old investment guru, with the biggest losers the owners of new-build flats aimed at buy-to-let investors which he fears are "almost unsellable."

Posted by dangerous trading @ 01:11 AM 4 Comments

Monday, January 28, 2008

This is so pointless - like urinating on a forest fire.....

FT.com: US bond insurer rescue takes shape

Efforts to shore up US bond insurers gathered pace on Monday as New York state regulators appointed investment bankers to advise on a rescue plan that could provide back-up credit lines for the troubled guarantors. The efforts are being spearheaded by Eric Dinallo, the New York state insurance superintendent, who is being privately supported by the New York Federal Reserve Bank and other regulators, people familiar with the regulators said.

Posted by lvmreader @ 11:34 PM 0 Comments

You heard it first from LVMreader a little while ago

FT.com: Moodys warns over Icelandic banks

Imagine the effect on the Yen Carry Trade Icelands triple A rating from Moodys Investors Service, the highest the credit rating agency offers, is at a crossroads because of the perceived fragility of the countrys banks.
Moodys said, in a report published on Monday, the growth in the banks foreign currency liabilities might stretch the authorities ability to manage a crisis.

Posted by lvmreader @ 11:18 PM 6 Comments

ECB aid to Spanish banks matches Rock rescue

TELEGRAPH UK: The data appear to confirm suspicions that the EU authorities have carried out a covert rescue of the Spanish mortgage banking system.

Spanish banks are issuing mortgage securities and asset-backed bonds on a massive scale to park at the European Central Bank, Reliance on the ECB window appears to have kept the mortgage sector afloat despite the sharp slowdown in the Spanish property market and the de facto closure of the capital markets for this type of business, allowing Spain to avoid the sort of mishap suffered by Northern Rock in Britain and Countrywide in the US. It may equal the taxpayer rescue of Northern Rock in Britain, and possibly exceed it in proportion to the overall size of Spain's economy.

Posted by dangerous trading @ 10:29 PM 0 Comments

Buy shares in auctioneer's

The Times: Auctions of repossessed homes soar

The number of repossessed homes being sold at auction has doubled since last year, a leading auctioneer said yesterday. Allsop, the UKs biggest property auction house, said that nearly 40 per cent of the properties going under the hammer at auction next month were repossessed by banks or building societies. Last February, just 20 per cent of properties auctioned were repossessed.

Posted by cheekie charlie @ 08:38 PM 0 Comments

Add on the mortgage cost and is it 700 per week?

Firstrung: Households spend 456 a week without mortgage costs - ONS

That's quite a lot to spend net, but why is mortgage and or rent excluded? Household spending was highest in the transport category at 62 a week. This included 23.40 on purchase of vehicles, 28.60 on the operation of personal transport (such as petrol, diesel, repairs and servicing) and 10.00 on transport services such as rail, tube and bus fares. The second highest category of spending was recreation and culture at 58 a week. This includes TVs, computers, newspapers, books, leisure activities and package holidays. On average, 13.20 a week was spent on package holidays abroad, compared to 0.90 a week on package holidays in the UK. Housing (excluding mortgage costs), fuel and power placed third at 48.

Posted by converted lurker @ 08:04 PM 1 Comments

Will Subprime Crisis Cool China Growth?

dow jones: "Rumors were that they could write off $2 billion," said Todd Lee, managing director of the Greater China group at Global Insight.

The U.S. subprime crisis may be able to help accomplish what China's central bankers have yet to do -- rein in China's banking industry and its fast-pitched economic growth and inflation. Adding to recent reports of a big subprime write-down at Beijing-based Bank of China Ltd. (601988.SH), a Chinese senior economist on Tuesday said he expected rising nonperforming assets at China's biggest lenders, fueled by their subprime exposure and tighter domestic credit.

Posted by dangerous trading @ 07:56 PM 0 Comments

Sub-prime crisis losses could cost Fortis 750m

the scotsman: Fortis has been under pressure to make a statement on its exposure after weekend reports suggested it may have to write off up to 1.5bn from its sub-prime portfolio.

FORTIS, the Belgian bank that was part of the successful RBS-led consortium that bought ABN Amro last year, said today that losses stemming from the US sub-prime crisis could be around 750 million. And that means that its profits for 2007 could come in at around 2.23 billion, rather than previous forecasts for 2.97bn. The world's biggest banks have already said they are facing total combine losses from the sub-prime sector which focuses on lending to people with poor credit histories of unreliable income of more than 100bn.

Posted by dangerous trading @ 07:37 PM 0 Comments

Scandinavian banks will suffer too

FT.com: Eastern Europe to feel credit squeeze

The turmoil in financial markets is turning into a nerve-racking test for the economies of central and eastern Europe and the former Soviet Union. Economists have said the fast-growing region faces a slowdown following the financial shockwaves reverberating around the globe.

Posted by lvmreader @ 07:00 PM 3 Comments

Wall Street Advances After Big Drop in New Home Sales, Disappointing Earnings

Yahoo - AP: Stocks Rise on Rate Cut Hopes

A jittery Wall Street advanced Monday, fighting to reverse Friday's sharp losses as investors took a dismal new home sales report as a sign that the Federal Reserve will lower rates this week.

Posted by stevie dee @ 05:40 PM 0 Comments

Coming soon to a city near you

Breitbart.com: US mortgage crisis creates ghost town

The streets are empty. Trash rustles down the road past rusted barbecues, abandoned furniture, sagging homes and gardens turned to weed. This is Shaker Heights, a suburb of Cleveland and a town ravaged by the subprime mortgage crisis roiling the United States. Faded "for sale" signs sit in front of deserted houses. The residents are gone, either in search of new jobs after the factories shut down, or in shame after being evicted for missing their mortgage payments. A red, white and blue American flag flies over windows and doors which have been boarded up to keep the drug dealers away. Thieves have stripped many homes of the plumbing, the doors, the windows, the aluminum siding.

Posted by lvmreader @ 05:36 PM 14 Comments

Looking grim in the States

BBC NEWS: US home sales fall at record pace

Sales of new US homes fell at a record pace in 2007, figures from the US Commerce Department have shown. The number of new homes sold sarimnk 26.4% to 774,000, which beat the previous record fall of 23.1% set in 1980.

Posted by tick tock @ 03:58 PM 3 Comments

The UK's 3rd biggest Buy to Let lender staving off the inevitable

Moneymarketing: Paragon shareholders vote in favour of rights issue

Paragon has confirmed that its shareholders have voted unanimously in favour of its proposed rights issue at its Extraordinary General Meeting today. The buy-to-let specialist lender had announced to the stock market in November that it would have to do an emergency rights issue as a result of funding problems caused by the credit crunch. It has since revealed that it will not be accepting any new lending from February 28 as its warehouse loan facility is not being renewed.

Posted by jack c @ 03:34 PM 10 Comments

Self-cert mortgages: a warning from the last crash

MoneyWeek: Self-cert mortgages: a warning from the last crash

Self-certification and subprime mortgages are hardly new phenomena. In the early 90s, the easy availability of loans and extravagant valuations led to bankruptcy and huge losses for lending banks. And it will again.

Posted by mary @ 02:58 PM 9 Comments

Another property fund shuts up shop

moneymarketing.co.uk: Close Investments suspends property dealing

Close Investments Property chief investment officer Peter Roscrow says: "We continue to believe in the long term future performance of Closepip which has performed better than the vast majority of competitor open ended property funds over the last one, three, and six months, one and three years. Open Ended???

Posted by jackas @ 02:56 PM 0 Comments

Proeprty consumes more of our incomes

BBC: House costs up as food bills drop

UK households spend more of their budget on housing and less on food comapred to 50 years ago, according to the Office for National Statistics. Spending on food and non-alcoholic drink fell from a third of the average weekly budget to 15%. Meanwhile mortgage interest payments or rent accounted for 19% of spending in 2006, up from 9% in 1957. UK households spent on average 572 per month on all housing-related costs in 2006, out of an average monthly spend of 1824. The ONS figures are used to calculate the RPI.

Posted by little professor @ 02:55 PM 11 Comments

More from the Chicks Bricks!

Times: Property prices: the Vital Statistics with the Bricks Chicks

I liked the part "7.5% is Halifax average mortgage rate, and with this rate forget house price appreciation" MAU HAHHAH HAAHAH

Posted by confused76 @ 02:31 PM 1 Comments

Yawn, yawn an irresponsible academic

Telegraph: MPC's Blanchflower calls for urgent rate cuts

Wish this guy would just go back to academia......''Professor David Blanchflower, the only member of the Bank of England's Monetary Policy Committee to vote in favour of a cut in interest rates this month, has hit out at the majority decision to hold rates saying that "worrying about inflation at this time seems like fiddling while Rome burns." ZZZZzzzzzzzzz

Posted by hpwatcher @ 01:48 PM 20 Comments

59% of those surveyed said they would use equity release money to improve the quality of their everyday life

Firstrung: Newcastle Building Society reveals a very bleak outlook for pensioners

New research from Newcastle Building Society Equity Release Service has unveiled the true high cost of being a pensioner. In 2008, Newcastle Equity Release Service predicts that real inflation for pensioners will be up to 7% - more than double the estimated national inflation rate. The main areas responsible for this hike are fuel and food, which, according to the weightings of the Government's pensioner's price index, account for over one-third (14% and 22% respectively) of all pensioners' expenditure.

Posted by converted lurker @ 01:45 PM 5 Comments

IMF Chief calls for increased fiscal deficits to get through crisis!!!

FT: IMF head in shock fiscal warning

This is the first time in 25 years that the IMF managing director has called for an increase in fiscal deficits and I regard this as a recognition of the gravity of the situation that we face,

Posted by happyrenterz @ 01:12 PM 3 Comments

Oil to fall in price?

FT: Investors shift bets to oil slide

"Investors are shifting their bets towards oil prices weakening in the near future as the slowdown in US economic activity damps energy demand growth, traders in London and New York said." If true this will have a big effect on inflation and gold prices.

Posted by happyrenterz @ 12:57 PM 3 Comments

Desperate Bricks Chicks

Times: Bicks Chicks

"Some indicies are showing rises in property prices, others are showing falls - but what's the true picture? This week the Bricks Chicks go behind the headline figures to find out what's really happening in the property market"

Posted by confused76 @ 12:23 PM 7 Comments

5.5%? and the rest......

BBC News: House prices 'to fall 5.5% then rise again', as top economist warns of recession

''A top economist warned today that the UK risked falling into a full-blown recession as it entered its weakest period of growth for more than 15 years. Roger Bootle, adviser to accountants Deloitte, said he expected the UK economy to grow by 2 per cent this year and 1.7 per cent the next, the lowest two-year growth rate since 1992.''

Posted by hpwatcher @ 12:11 PM 3 Comments

Woodford predicts 10% housing market correction

Citywire: Woodford predicts 10% housing market correction

UK housing is considerably more exposed to a sharp pricing correction than most analysts have estimated Invesco Perpetuals Neil Woodford has warned.

Posted by norflandon @ 11:51 AM 7 Comments

House prices up 26.5% year on year

Nationwide [pdf]: Flashback to the madness

Commenting on the figures Alex Bannister, Nationwide's Group Economist, said: House price growth remained steady at 1.7% in January. Given that house prices rose at a more modest pace a year ago the annual rate of inflation rose to 26.5%. With the current trend in growth very stable, we would expect the annual inflation rate to remain around 25% for the next couple of months. The average house price is now 117,905. [Jan 2003]

Posted by little professor @ 11:36 AM 1 Comments

A reminder of why recessions aren't fun

MoneyWeek: Why the credit bust will be far worse than the tech bust

Those who claim a recession would be the perfect antidote to our overspending ways should remember a couple of things. Firstly, that recessions are miserable. And secondly, that this one's going to be much, much worse than the 'mini-recession' that followed the tech crash

Posted by mary @ 11:15 AM 5 Comments

Thank you Times for replacing davidsmith with a Hometrack director. At least this is a honest piece of advertisement

Times: Home economics: house prices and stock market turmoil

"Confidence has certainly been dented, but demand for housing still exists. The move towards more realistic pricing is under way, and may well take a further 12 to 18 months; all-important will be what happens to interest rates and the economy as a whole. Although it provides useful support for prices in the short term, low turnover could have adverse consequences for the market if it persists. For many, the thought of being stuck in their home for the next 20 years could be a call to action. Richard Donnell is director of research at Hometrack" a better, more honest article than any of the garbage by davidsmith "David Smith returns next week" NOOOOOOO!!!!

Posted by confused76 @ 09:02 AM 5 Comments

Marekt gridlock on the way, can't sell, won't buy, not enough mortgage products..............

Firstrung: UK house prices fall again as average time to sell house reaches seven year high - Hometrack

House prices in England and Wales rose at the slowest annual pace since mid 2006 as the average time it takes to sell a property reached a seven year high, a survey showed on Monday...

Posted by converted lurker @ 09:01 AM 6 Comments

Another Rate Cut? What Does the Fed Really Know?

Market Oracle: Fed Duped by Rogue Trader and the Destruction of Bond Insurers

Article by John Mauldin (www.frontlinethoughts.com) who thinks the Rogue Trader explanation is not right. The Fed was not worried about the stock market itself. The stock market was responding to a monoline downgrade. Instead the Fed knows how serious the credit crunch is, a $45 trillion Credit Default Swap market is at stake. If more monolines and other bond insurers get downgraded things go over a cliff. Dropping IR 1.25% on Wednesday would have been too much, so they are doing it in two steps. Expect another big rate cut on Wednesday.

Posted by happyrenterz @ 08:27 AM 6 Comments

Countrywide boss to forego massive payout.

New York Times: Countrywide CEO to give up $37.5 million in payments

NEW YORK (Reuters) - Countrywide Financial Corp CEO Angelo Mozilo said on Monday that he would give up $37.5 million in severance pay and other fees he stood to gain from the mortgage lender's sale to Bank of America Corp , amid criticism over his role in the U.S. mortgage meltdown.

Posted by barb777 @ 08:19 AM 1 Comments

Monoliners may make financial crisis a whole lot worse

TELEGRAPH UK: Yet it is going to be a very difficult balancing act. If it turns out that the system is even more fragile than it currently looks then the Bank may be compelled to cut rates more vigorously. A certain amount of conservatism, caution and circumspection is

Who said high finance was boring? Last week, as markets gyrated and the US central bank unexpectedly cut interest rates, the new obsession for the markets, the media and ordinary people alike was whether we are heading for recession. Well, are we or aren't we, and if so, what can be done about it? Too much attention is paid to the R-word. In this country, by common agreement among economists (a rare thing) a recession means two consecutive quarters of falling output (i.e. negative economic growth). Quite why it is two quarters and not three, or indeed one, I am not sure. On this definition, the UK had a recession in 1990-92 and 1979-81. But since the war, in most developed countries, recessions have been rare.

Posted by dangerous trading @ 06:08 AM 1 Comments

Another Reality Check for the UK

The Times: London house price fall of 6.8% in past month stokes economy fears

House prices in London have fallen by an average of 28,000 in the past month, as the capital sets the pace of an accelerating property downturn, a leading survey reports today.

Posted by quiet guy @ 03:04 AM 4 Comments

Bond Insurers: The Next Nightmare?

times: That will add insult to injury: the subprime collapse has already triggered bumper write-downs of some $130 billion.

There's nothing like global financial chaos for enriching the vocabulary. Few realized what sub-prime really meant until a U.S. mortgage market went pop last year. These days it's a byword for bad news everywhere. And who knew those collateralized debt obligations could be such a smack in the chops? But it's time for a new word. One that's no less mean or mysterious. Try the new bad term on the street: monolines.

Posted by dangerous trading @ 02:42 AM 0 Comments

Finally the media agree with what we've been saying for years

Times: Great news! House prices are down

It is clear now that the housing market has peaked and has begun to fall over the past few months. But, rather than fearing price falls as the beginning of the housing market's equivalent of foot and mouth disease, they should be welcomed. A sharp correction is needed. This will hit owners who have bought in the past couple of years - who could face negative equity - but it may be a necessary cost.

Posted by drewster @ 02:14 AM 4 Comments

Hometrack: -0.3% in Jan

Guardian: UK house prices up 2.3% year on year

Housing market research company Hometrack said house prices in January rose 2.3 percent on a year ago, down from 3 percent in December and the weakest rate since June 2006. On the month, prices fell 0.3 percent, the fourth consecutive monthly fall. The average time to sell a home rose to 8.5 weeks - the highest since the survey began in 2001.

Posted by little professor @ 12:12 AM 2 Comments

Will Europe emerge relatively unscathed? What about property bubbles in Spain & Ireland?

FT: Expect the Eurozone to show some resistance

Credit generation in the eurozone has remained extremely buoyant. The financial crisis has had no discernible effect on actual credit flows. The eurozone banking sector is not only healthy, but continues to supply the economy with ample funds. The eurozone is in many important aspects different from the US and the UK. There has been no fall in house prices. There is no subprime crisis. There are no monoline insurers. There is no pandemic of overstretched borrowers. While there are clearly some distressed banks, the European banking sector is still robust, the odd rogue trader notwithstanding. The eurozone is also in a fiscally strong position to confront a downturn.

Posted by drewster @ 12:07 AM 5 Comments

Thoughts of a Financial Engineer

The Guardian: UK rate cut vital to avoid slump, says MPC member

The British economy risks following the US into a slowdown unless interest rates are cut sharply in the next few months, one of the Bank of England's monetary policy committee members warns today. In an interview with the Guardian, Professor David Blanchflower said the Bank needed to learn from the US federal reserve and take pre-emptive action to prevent growth from stalling.

Posted by quiet guy @ 12:06 AM 5 Comments

Sunday, January 27, 2008

Analysts at Bernstein Research have questioned the strength of Wall Street's sub-prime hedges, which are now under pressure and may need to be replaced, raising the risk of more writedowns.

dow jones: Financial News: Banks Have Billions In Exposure To Monolines

The top five U.S. broker-dealer banks have a combined $23 billion (EUR15.7 billion) in uncollateralised exposures to AAA counterparties, part of which is with monoline bond insurers that have been weakened by the sub-prime mortgage crisis. Monolines insure $2.3 trillion of debt, including structured credit and municipal bonds, according to research by Swiss bank UBS. Merrill Lynch & Co. Inc. (MER) is the only bank to have reported losses in relation to its exposures to monolines, and Bernstein expects more if the outlook for monolines deteriorates further. The U.S. bank wrote down $3.1 billion of the assets in the fourth quarter last year after monoline ACA, to which it had an exposure, had its credit rating downgraded to junk status.

Posted by dangerous trading @ 11:42 PM 0 Comments

Only 5.8 billion exposure to ABS CDOs at Barclays

Barclays PLC: BARCLAYS PLC OCTOBER YEAR TO DATE TRADING PERFORMANCE

So that's ok then

At 31st October 2007, Barclays Capitals high grade exposure net of hedges and subordination was 3.8bn (30th June 2007: 5.8bn) after charges and write downs net of hedges in the third quarter of 0.3bn and a further 0.4bn in October 2007.At 31st October 2007, Barclays Capitals mezzanine exposure net of hedges and subordination was 1.2bn (30th June 2007: 1.6bn) after charges and write downs net of hedges in the third quarter of 0.1bn and a further 0.3bn in October 2007
Other US Sub Prime Exposure BarCap provided secured financing lines to third-party mortgage originators in advance of securitisations, and also purchased pools of mortgages ("whole loans") for Barclays Capitals own account in anticipation of its own securitisations

Posted by lvmreader @ 11:27 PM 0 Comments

Give me land and I'll build one ...

Independent: Only three sustainable homes built in UK so far

Gordon Brown's dream of "eco-towns" with tens of thousands of homes powered by wind and solar power has failed to grip the public's imagination. Officials have confirmed that only three low-carbon homes are being built in the UK. The Prime Minister made the plan for 100,000 sustainable homes a key element of his pitch for the Labour Party leadership last summer. But individuals have failed to match the Government's enthusiasm for cutting household emissions.

Posted by uncle chris @ 08:53 PM 2 Comments

When falling supply meets rising demand you get black outs at the London Olympics!

BBC: Britain 'facing energy shortfall'

More poor planning by the government. Britain is likely to face a shortfall in electricity generation within five to seven years. The number of nuclear and coal plants coming out of service over the period makes shortages likely. Demand overtakes supply somewhere between 2012 and 2015, creating a serious 'generation gap'. In the extreme case, shortages could materialise around the time of the London Olympics in 2012 - Cool that should get Northern Crock off the front pages! One expert who dismissed the report said "For black-outs to occur, pretty much everything would have to go wrong," err isn't that something this government is good at! He then went on to say perhaps this is a 'wake up call, err and to the FTB who cannot afford the house let alone the heating!

Posted by who stole my pension? @ 06:22 PM 6 Comments

Is the "Decision Making Machine" trying to disguise other losses by blaming Kerviel

Agence France Presse: SocGen chief Bouton seen fighting for his future

ENA is the Ecole Nationale d'Administration: part of the French Grande Ecole system. The entire finance industry has expressed astonishment that one lower ranking trader could inflict such damage without being spotted. Bouton has been forced to deny putting losses from other bad deals on Kerviel's account. "What happened at Societe Generale is certainly not a disaster that resulted from our strategy. It is more like an accidental fire which destroys a large factory at an industrial plant," Bouton told Le Figaro newspaper. Bouton, 57, who like most of the French elite passed through the National School of Administration, or ENA, describes himself as a "decision-making machine." From a modest background, like many of the brilliant students who go through ENA.....................

Posted by lvmreader @ 06:08 PM 5 Comments

Whoopsie

MarketWatch: Fortis to write off billions in subprime losses - report

Belgian-Dutch bank insurer Fortis will write off between EUR1 billion and EUR2 billion from its subprime portfolio, Belgian newspaper Der Standaard reported Saturday, citing a well-informed source. The bank's share price dropped 10.9% Friday at EUR13.21 in Amsterdam, on market rumors it might be considering a profit warning and a rights issue. Fortis said Friday it was not aware why the shares moved so heavily.

Posted by lvmreader @ 05:52 PM 3 Comments

Shameless property ramping

Telegraph: How to be a FTB: Case studies

Elaine Shanks, 25: She has bought a luxury2-bed flat for 245,000. "I've bought off-plan, so I only had to put down the deposit." Louisa Smith, 28: "I knew I just couldn't afford to buy, but my parents suggested I went for part-ownership and they helped me with a deposit of 50,000," she says. She was paying about 400 in rent per month, with bills on top, but is now paying about 800 in mortgage and rent. For this she gets a 50% stake in a 250,000 1-bed flat. Camilla and Lucy Thornton: "Our grandfather left us each a small legacy which would not have been enough for a deposit for one of us. But by combining them it was enough." Their flat cost 325,000. "We will be living on baked beans for a while - no going out for us!"

Posted by little professor @ 04:52 PM 23 Comments

24% of adults hoping to retire by 62 have no pension provision

Firstrung: 24% of Brits who hope to retire by 62 have no pension provision

Research from Baring Asset Management (Barings) reveals that on average, Brits expect to be retired by the time they are 62. However, the research found that of those adults yet to retire 24% (9.03 million adults) have made no pension provision at all. The findings highlight the fact that millions of Brits are failing to seriously plan for their retirement...

Posted by converted lurker @ 03:44 PM 20 Comments

More evidence that the UK consumer is all spent up

Firstrung: Firstrung, first time buyers, the week in focus

Two issues dominated housing news over the past week; house prices and mortgage approvals. Rightmove published their latest survey in which they concluded that prices have fallen once again, albeit by a modest 0.8%. London house prices appear to be in freefall mode currently according to Halifax. However, according to RM prices are up in London, by as much as 5.5% in a single month in certain areas. This is obvious evidence of attempted panic selling...

Posted by converted lurker @ 03:41 PM 0 Comments

Less Cash to Chase Houses in the City?

Telegraph: Financial crisis could cost London 20,000 jobs

"As many as 20,000 City jobs are likely to be wiped out by the financial crisis, according to one of the first comprehensive forecasts of the toll on London's economy."

Posted by quiet guy @ 03:23 PM 3 Comments

People are starting to sell their second homes

Hiday.net: Bulgaria Resale Property Market

One reason for offloading foreign property, particularly amongst UK and Irish investors, is the state of the British and Irish economies. Interest rates are beginning to bite and people with second homes abroad are starting to feel the pinch.

Posted by john84 @ 02:22 PM 0 Comments

Socialise losses whilst privatising profit...

Guardian: This reckless greed of the few harms the future of the many

The current financial markets' freedom embeds short-termism, guarantees lower investment, works against business building and innovation, generates booms and busts, inflates house prices, creates system-wide risk and excessively rewards those who work in them.

Posted by pendulum @ 01:08 PM 10 Comments

The wonder isn't that the bubble is bursting, but that it has lasted so long

Guardian: Pity the poor estate agents, caricatures of boosterish greed

And now all us seem to be heading towards the edge - of a cliff, according to some forecasts, or of a downwards slope, according to others. The certainty is that the long boom is over. The consequences may be mixed - people feel less rich, houses become more affordable - but for estate agents a collapse in house prices is unalloyed bad news.

Posted by jack c @ 11:08 AM 4 Comments

housing association scheme aims to revitalise run-down areas

Guardian: Discount plan giving leg-up to buyers will fight blight

A scheme offering buyers a 25 per cent discount on a Victorian terraced house almost sounds too good to be true.Anyone who cannot otherwise afford their own home is eligible for the scheme, called Own Place, which is currently operating in parts of the north west. The offer comes with strings attached, but they are conditions that the scheme's operator, the Riverside Housing Association, hopes will help to revitalise city streets blighted by boarded-up properties, buy-to-let landlords and short-term tenants. In return for the discount, worth tens of thousands of pounds, buyers must agree to live in the properties for at least five years, or else pay the 25 per cent discount back to Riverside.

Posted by jack c @ 10:57 AM 0 Comments

The Big Issue from No 10! (Perhaps he has run out money and cannot pay the mortgage!)

10 Downing Street: The Big Issues

This web site sets out the governments "big issues". Quote: "This is where to find in-depth coverage of the main policy areas currently being addressed by Gordon Brown and the Government". Interestingly the economy is not mentioned! Where has Gordon been the last 6 months?

Posted by who stole my pension? @ 09:36 AM 4 Comments

House prices DON'T always go up

Reuters: As safe as houses? Dutch history suggests not

The Herengracht index is a unique index drawn up by Piet Eichholtz, a real estate professor at Maastricht University using records of Dutch house prices over 350 years. It has been cited by Yale economist Robert Shiller for its reflection of the inexorable logic that bubbles always burst. "There are long periods where prices go up and prices go down. But over the centuries there is no uptrend or downtrend," said Eichholtz. "The index teaches that the house market is volatile and in real terms doesn't go up or down structurally." Eichholtz says home-owners have short memories when it comes to big price falls: "When there is volatility every so often people are very myopic and tend to forget. A price fall of 30 to 40 percent is rather common and cannot be ruled out for the US and UK.

Posted by little professor @ 01:26 AM 5 Comments

Banco Santander running for cover

FT.com: Propinvest in 1.9bn deal for Santander HQ

Santander has sold its headquarters near Madrid to Propinvest, the British real estate investor, for 1.9bn ($2.8bn, 1.4bn). The Spanish bank has sold the 1.5m sq m complex in Boadilla del Monte as part of a wider sell-off of its Spanish real estate assets. This is the last asset to be sold from a huge portfolio of commercial property which was brought to the market last summer. In a statement to the Spanish stock exchange on Friday, the bank said that it made a 605m profit from the sale of the complex and a 1.7bn profit on the sale of the entire portfolio.

Posted by lvmreader @ 12:28 AM 2 Comments

USA Tent City

Youtube.com: Southern California Shanty Town / Tent City

"If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow up around them, will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered."

Posted by lvmreader @ 12:21 AM 4 Comments

Saturday, January 26, 2008

Why the working person will never really better themselves?

Telegraph: Pointing fingers at the plutocrats

"There is collusion between most politicians, bankers and investors to avoid asking the big question: has the freedom of investment banks, private-equity firms and hedge funds to buy and sell what they like, when they like, gone too far? That would be to threaten the return to full throttle, whenever it comes, of the most successful machine in the history of the world for expanding the clone army of the super-rich."

Posted by quiet guy @ 11:08 PM 10 Comments

Corporate debt and a downturn

FT: Traders believe debt markets will get worse

Corporate debt wont be a good thing to be holding in a recession. Hedge funds taking their positions to profit from this. "So far, most of the rout in the debt markets has been linked to the US subprime mortgage debacle. Increasingly, however, many hedge funds are betting there is far worse to come for the corporate debt market as well."

Posted by happyrenterz @ 09:12 PM 0 Comments

During the last few weeks, things have taken a turn for the worse

Independent: The credit crunch is starting to bite

The crisis in the credit markets has finally begun to take a true grip on consumers over the past month as the cost of borrowing has risen, credit has got harder to come by, and this week stock markets have started to plummet as well. While many commentators have been doom-mongering ever since Northern Rock first ran into trouble in September 2007, the reality was not so bad for most consumers at first.

Posted by jack c @ 08:29 PM 2 Comments

Now it's German Banks in trouble

Reuters: Landesbanks' subprime exposure 80 bln eur

"Four German state banks have a combined exposure of almost 80 billion euros ($117.2 billion) to risky assets and the state bank of Bavaria, BayernLB, could need an over 2 billion euro write-down, FOCUS magazine reported".

Posted by alan @ 08:29 PM 1 Comments

Abbey has effectively shut the door on first-time buyers

Telegraph: Abbey tightens its lending criteria

Abbey has effectively shut the door on first-time buyers by lifting interest rates on mortgages that require no deposit by 1.15 percentage points to 7.99 per cent almost 2.5 percentage points higher than base rate which stands at 5.5 per cent. The rates have been imposed on tracker mortgages at 100 per cent loan-to-value (LTV) for new borrowers, but would-be buyers looking for the security of a fixed rate deal also face paying steep rates, even though they have remained unchanged.

Posted by jack c @ 07:48 PM 5 Comments

Ambrose - The biggest bear

Daily Telegraph: US slides into dangerous 1930s 'liquidity trap'

The United States is sliding towards a dangerous 1930s-style "liquidity trap" that cannot easily be stopped by drastic cuts in interest rates, Nobel economist Joseph Stiglitz has warned.

Posted by holding out @ 04:30 PM 7 Comments

Higher mortgages and rising rents

FT: Rising mortgage costs boost lettings sector

There's some odd data in this FT article - allegedly 21 percent total return on BTL property in 2007 which is supposedly 3 times the return in 2006. However, supposedly rents rose by 19% over the year, and 8% in Q4 - all according to Paragon who now can't convince anyone to give them more money to lend to landlords. Perhaps only they can make it up... The main thrust of the article is that since renting is cheaper than a mortgage by one third there is more demand for renting - lots of STR?? Also the government seems determined to ensure that citizens buy property rather than rent it. The logic for this is unclear - it would make more sense to sell property to foreigners en masse before prices crash further so they suffer the losses. Two houses on Bishops Avenue is a start...

Posted by mark @ 02:56 PM 0 Comments

A good question is posed here

Von Mises Institute: Don't Blame Subprime Lenders

Why would a businessperson choose to lend and borrow in an artificial boom once they've seen several business cycles? Because, even though business investors know that the bust will come, writes Jim Bradley, it makes no sense to refuse funds while other businesses are using the new funds to compete. And why doesn't the population at large just refuse to participate? Because Congress has established high transaction costs (capital gains taxes) and legal tender laws that prevent common citizens from the use of alternative assets to replace government money. As a result, expanding businesses get to use cheap socialized financing. That financing gains its value from diluting existing money. But the real negatives occur not in the booms and busts, but their additive result over time.

Posted by lvmreader @ 01:23 PM 3 Comments

Trouble with 'buy to let'

Hiday.net: Europe - The Demise Of the Buy To Let Market

They say that when the USA sneezes the UK catches a cold! With the demise of the subprime market in America not only is the UK starting to feel the effects of a chill but many parts of Europe are as well. Now that the Buy to Let market in the UK is beginning to feel the effects of the credit crunch many are now selling up fast.

Posted by john84 @ 12:59 PM 0 Comments

HRMC has secret unit to calculate MP tax bill!

Telegraph: Online tax system 'too risky' for the famous

Listening to Radio 4 today one expert said that HMRC had added a extra digit to the tax code of MP's so that their returns could be screened out and sent to a special department. This is why they cannot file on line i.e it is nothing to do with security. This sounds like one rule for us and one for them. Why can't HRMC use the same department that mucks up out tax returns, to also muck up the MP's tax returns? Or is the truth more serious i.e. one tax rule for us and another more lax tax for the MP's. Is this why they enter parliment broke and then leave rich? This stinks!

Posted by who stole my pension? @ 12:21 PM 7 Comments

Some Interesting Numbers From The Fool

Motley Fool: The Last Housing Crash, Part 2

In the first part of this article, I looked at how the last property crash panned out across the UK and in six of its twelve regions. For the record, here's how the average price fell over the entire nation:

Posted by quiet guy @ 12:05 PM 2 Comments

It begins.........

Four Winds: Small Bank Failure is First of 2008

Regulators closed the first bank of 2008 late Friday, shutting $58 million-asset Douglass National Bank in Kansas City, Mo. Douglass, which had a glut of bad loans and less than $1.5 million of Tier 1 capital, was also the first nationally chartered bank to fail since Guaranty National Bank of Tallahassee failed in March 2004 with $74 million in assets. The bank, a subsidiary of Douglass Bancorp Inc., announced plans in August to sell to $821 million-asset First Guaranty Bancshares Inc. in Hammond, La., but that deal collapsed in October. The prospective buyer claimed Douglass shareholders balked at the $2.5 million offering price.

Posted by lvmreader @ 12:02 PM 0 Comments

"... never sideways ..."

thisismoney: 2008 OUTLOOK: Where next for house prices?

" ... possible long, drawn out downturn ... "

Posted by doomwatch @ 10:34 AM 9 Comments

Systematic failure on the "rock".

BBC: FSA 'failed over Northern Rock'

More on the Rock story critisiscm of the FSA and the BOE.

Posted by doomberger @ 08:49 AM 2 Comments

Banks should be allowed to fail say select commitee!

Yahoo/sky: Northern Rock Plans Criticised By Treasury Committee

Nothern Rock on the agenda in front of the select commitee today. They are calling for a "A special resolution regime for failing banks - to ensure they can be either rescued or allowed to fail in an orderly fashion" Why should the UK taxpayer subsidise a PLC? Banks go bust on a regular basis in the US!

Posted by doomberger @ 08:36 AM 2 Comments

Government excludes BTL from entrepreneurs tax break

thisismoney: Will buy-to-let owners get 10% tax break?

The government has excluded BTL from the latest changes to CGT. However, they still have the government review on BTL to look forward to!!!!!!!!!!!

Posted by who stole my pension? @ 08:20 AM 2 Comments

Six reasons why it is not all doom and gloom

Daily Reckoning: The UK Economy: It's Not All Doom and Gloom

Six reasons why it is not all doom and gloom. Good food for thought - enjoy!

Posted by who stole my pension? @ 08:12 AM 3 Comments

People are dying because Gordon has used green issues to raise taxes

Spectator: The high cost of energy

Rising fuel prices are behind a trebling in the number of homes disconnected. What lies behind these rises? 50% is due to taxes imposed by the Treasury. The sad link between green measures and public impoverishment looks set to continue. The government bungled the green tax programme. They claimed the tax would be targeted at big business but the manner in which these costs have been imposed means that they are reaching the public. When a massive cost comes out of nowhere (as these did in 2007), companies will always seek to raise prices. This could have been avoided by talking to business leaders, followed by a slow roll-out of taxes and compensatory measures. When thousands of people are dying because they can't afford heating, a little more thought could have gone a long way

Posted by who stole my pension? @ 07:59 AM 0 Comments

Summary of the economy and the governent

Spectator: Not so good

Nothing new but a good, if depressing, summary of the economy and the government lack of competence to deal with the problems.

Posted by who stole my pension? @ 07:24 AM 0 Comments

Summary of the economy

Economist: Nothing to smile about

Nothing new but a good summary. In short we are in a mess with no way out. Gordon has failed. The return of boom and bust!

Posted by who stole my pension? @ 07:16 AM 2 Comments

Summary of Nothern Rock and the Government

Economist: Hocking the Rock

Nothing new but a good summary of Nothern Crock. And if you were wondering Nothern Crock borrowed another 2.2billion from us (sorry tax payer) last week!

Posted by who stole my pension? @ 07:04 AM 0 Comments

Here we go again! We will die on poverty!

FT: UK company pension schemes in 15bn reversal

Yet again the money purchase pension schemes, that so many of us depend upon, are heading for trouble. Still rest assured Gordon pension is safe!! Or is it? Should we not start demanding that MP pensions be changed from the inflation proofed, final salary scheme, to a money purchase scheme? This would then make the MP behave in a sensible manner. Of course we will also have to limit their pay rise to CPI (not RPI) and limit their expense claims to say 10,000 quid/annum! Oh and Gordon I have not forgotten that to date you have stolen 100billion quid from the pension funds!

Posted by who stole my pension? @ 06:55 AM 11 Comments

The subpoenas start flying

CNN Money: Wall Street's money machine breaks down

By the end of June, Merrill held $41 billion in subprime CDO and subprime mortgage bonds. Since the average deal is between $1 billion and $1.5 billion, and the AAA debt is around 80% of each deal, Merrill must have been buying nearly all the top-rated debt from dozens of CDOs. The question is why Merrill would purchase bonds its customers were rejecting. Merrill hasn't given a detailed explanation of how it came to own such a large volume of subprime bonds. At first, Merrill made money on the bonds because it was able to benefit from the "carry trade" - borrowing money at low rates and using it to buy CDO bonds paying higher rates. Also, Merrill execs apparently believed that the credit market turmoil would ease and the bonds would once again be easy to sell.

Posted by lvmreader @ 06:50 AM 0 Comments

We can no longer afford to defend ourselves

FT: UK defence plan hits finance snag

The turmoil in credit markets has dealt a big blow to the UK governments defence procurement programme, putting in jeopardy plans to help fund a new fleet of Airbus tankers for the Royal Air Force with a bond issue. At a time when our armed forces are risking their lives fighting wars in Iraq and Afganistan with shoddy equipment and poor housing our government runs out of money. What a mess! Soon they will be paying the armed forces with food and clothing vouchers rather than money.

Posted by who stole my pension? @ 06:45 AM 11 Comments

Friday, January 25, 2008

Lenders reduce LTV to avoid "rubbish"

FT: UK lenders steer away from 100% mortgages

Norwich and Peterborough has now reduced its maximum loan-to-value from 100 per cent to 90 per cent. Matthew Bullock, chief executive, said: Anyone out there with a 100 per cent offering will get all the worst propositions coming to them youll get all the rubbish. People will say theyre still in the market, lets go to them. They wouldnt get through our filters, but wed still have to process them.

Posted by flamepoint23 @ 10:08 PM 0 Comments

More fallout to come

Telegraph: Banks 'face a further $300bn sub-prime hit'

"While governments, central banks and regulators scramble to address the aftermath of the sub-prime fallout, several other crises are mounting." Tumbling property prices - especially in the UK and Spain - a weakening dollar, a possible collapse in commodity prices, and a fall in Chinese and Indian stocks will "disrupt" the global economy, the report claimed. Banks are already coming off one of the worst trading periods in memory, with shares across the industry plummeting 40pc in the past six months. Oliver Wyman has estimated that financial services companies have already taken a $300bn hit on their sub-prime exposure.

Posted by flamepoint23 @ 10:02 PM 0 Comments

Records broken as $ resumes decline

Reuters: Gold, platinum hit record.

"Gold and platinum soared to historic highs on Friday amid a power crisis that shut South African mines, firm oil prices and expectations of more U.S. rate cuts. Gold hit a high of $923.40 an ounce, spot platinum hit a lifetime high of $1,697 an ounce". ," Ross Norman, managing director at TheBullionDesk.com, said."We hold with our view that gold will hit a high of $1,250 this year,"

Posted by alan @ 09:09 PM 0 Comments

Goldies axe sharpening

Reuters: Goldman Sachs says to cut workforce

LONDON (Reuters) - U.S. investment bank Goldman Sachs (GS.N: Quote, Profile, Research) plans to sack about 5 percent of its global workforce in coming months after its annual staff evaluation, a company spokesman said on Friday. Goldman Sachs employs about 30,500 people worldwide, meaning the cuts would represent about 1,500 employees.

Posted by doomwatch @ 09:00 PM 0 Comments

Isn't this the same problem with the Academic system?

LaRouchePub: The Bond Insurance Crisis, or, My Fig Leaf is Falling

First it was the subprime crisis, then it was the SIVs, and now it is the bond insurers that are the problem, according to the financial press. The line is that if the bond insurers fail, the ratings on the bonds they insure will be reduced, forcing pension funds and other institutions to sell their holdings, causing a crash in the market for the municipal bonds, CDOs and other paper insured by these companies. That's a scary scenario, designed to make you feel that if we don't bail out the bond insurers, the whole system will collapse. There's good news and bad news here. The good news is that the scenario presented above is not really true, but the bad news is that the situation is actually much worse.

Posted by lvmreader @ 06:51 PM 2 Comments

A Good Overview

The Economist: It's rough out there

The financial storm that blew up in America's subprime mortgage market last year has become a hurricane. The ill wind from reckless property lending blasted first the market in asset-backed securities, then banks' balance sheets and, most recently, stockmarkets.

Posted by submedia @ 04:50 PM 10 Comments

Rodneey, can you lend me a tenner?

Times Online: Mortgage bond insurers 'need $200bn boost'

America's biggest mortgage bond insurers collectively need a $200 billion (101 billion) capital injection if they are to maintain their key AAA credit ratings, a figure that dwarfs a plan by New York regulators to put together a capital infusion of up to $15 billion, a leading ratings expert said yesterday. The failure to maintain their AAA ratings will lead to a further round of multibillion-dollar writedowns among the Wall Street banks and other large owners of the bonds,

Posted by alan @ 04:21 PM 4 Comments

They would love us to believe this...

BBC: Rogue trader scandal broadens out

''Analysts are trying to assess whether the trader's actions contributed to the stock market turmoil and the Fed decision to cut interest rates.'' Let's reverse the 0.75 rate cut then???

Posted by hpwatcher @ 04:20 PM 8 Comments

LVM is Ludwig Von Mises

Investment Rarities: The Wisdom of Ludwig Von Mises

The boom produces impoverishment. But still more disastrous are its moral ravages. It makes people despondent and dispirited. The more optimistic they were under the illusory prosperity of the boom, the greater is their despair and their feeling of frustration. The individual is always ready to ascribe his good luck to his own efficiency and to take it as a well-deserved reward for his talent, application, and probity. But reverses of fortune he always charges to other people, and most of all to the absurdity of social and political institutions. He does not blame the authorities for having fostered the boom. He reviles them for the inevitable collapse. In the opinion of the public, more inflation and more credit expansion are the only remedy against the evils which inflation and credit

Posted by lvmreader @ 02:29 PM 9 Comments

2million Britons had two homes now no home

thisislondon: 2million Britons have two homes BUT property crash might put many in jeopardy

More than two million people own a second home in Britain, official figures revealed for the first time yesterday. They show 5 per cent of the adult population have a family home and at least one other property. The figures, compiled by the Office for National Statistics, show the extraordinary wealth which is tied up in housing. But experts said they also highlight the risks homeowners face if there is a property crash.

Posted by lloyd @ 02:21 PM 0 Comments

review reveals renting currently cheaper than buying

Mortgagestrategy: First-time buyers face soaring mortgage costs

Average mortgage costs to income for first-time buyers are now higher than levels at the 1990s housing boom peak, says the Building Socieites Association. First-time buyers were devoting nearly 35% of their income to mortgage costs by the third quarter of 2007, compared with the previous high of nearly 34% in 1990, the UK Housing Review indicates.

Posted by jack c @ 02:06 PM 8 Comments

The US want to party on.

CNN: Stimulus plan also sparks housing market

The measures would make mortgages easier to get and reduce borrowing costs -- especially in hard-hit, high-cost housing markets.

Posted by holding out @ 02:05 PM 6 Comments

Buoyant to the end (despite the need for an emergency rights issue)

Mortgagestrategy: Total returns for B2L tripled in 2007

Total annual returns for buy-to-let investors tripled in 2007 to 34,000, research out from Paragon reveals. In percentage terms, Paragon says investors would have seen a 21% total annual return in 2007. This compares to just 7% in 2006 or 11,000. The buy-to-let specialist says continued demand for rental accomodation has also spurred strong rental growth in the new year.

Posted by jack c @ 02:01 PM 12 Comments

Brown comes clean: more bad news to come

Times: Brown gives gloomy forecast for world economy

Brown: "There is also a danger, I think, with bad news still to come, of being over optimistic ... and overemphasising the silver lining at the expense of some of the clouds." Wonder if the Estate Agents are STILL thinking all is wonderful?

Posted by growler @ 01:28 PM 1 Comments

Repeating the mistake

NY Times: A Fear That the Cure Could Be Poison

One day after the Fed slashed its benchmark interest rate to head off a possible recession, a small minority of economists warned on Wednesday that the central bank was in danger of invoking the same remedies that it did after the bubble in dot-com stocks burst seven years ago.

Posted by sold 2 rent 1 @ 12:47 PM 2 Comments

end of an era

NY Times: Seeing Signs of Systemic Failure

This is not a normal crisis, George Soros, the hedge fund pioneer turned philosopher, said today to a group of reporters he had invited to lunch at the World Economic Forum. It is the end of an era.

Posted by sold 2 rent 1 @ 12:40 PM 2 Comments

Must be seen to be busy ?

Field report: Must be seen to be busy ?

Allegedly Conxstons minis were spotted out in force this morning driving around North London aimlessly. Also this morning a "Let" sign went up outside a pals flat, and he hasn't even signed a renewal ! When he complained to the posh EA manager she admitted the director wants signs up to show activity. Desperate ?

Posted by doomwatch @ 12:26 PM 8 Comments

Monopoly - Gordon Browns Britain edition

Spectator: Modern-day Monopoly

"Few provincial towns these days are considered so inconsequential that they have not spawned a special edition of the Monopoly board, featuring their own street names. But there is one version of the game you wont find in the shops: the Gordon Browns Britain edition. This is a game in which, unlike the original, you can borrow money lots and lots of it. Until, that is, property prices collapse and youre left in a credit crunch."

Posted by frabcus @ 11:29 AM 0 Comments

He should know he is the cause of it

Guardian Unlimited: Worse to come for economy, warns Brown

"There is also a danger, with bad news still to come, of being over-optimistic about what we can achieve and over-emphasising the silver lining at the expense of the clouds."

Posted by lloyd @ 11:17 AM 0 Comments

The sub-prime discosures are far from over

Times: Banks 'face a further $300bn sub-prime hit'

"While governments, central banks and regulators scramble to address the aftermath of the sub-prime fallout, several other crises are mounting." Tumbling property prices - especially in the UK and Spain - a weakening dollar, a possible collapse in commodity prices, and a fall in Chinese and Indian stocks will "disrupt" the global economy, the report claimed. Add to this the earleir blog on massive mortgage lending contractions ... Land Registry figures for the next few months ought to be good reading.

Posted by growler @ 11:13 AM 5 Comments

How investment banks gamble with your money

MoneyWeek: Rogue trading: a very stupid explanation of the crash

According to some sections of the press, we can all stop worrying about the state of the financial markets now. We've found the culprit: Societe Generale's rogue trader, Jerome Kerviel. Except it's not that simple at all - and rather than reassure investors, the story flags up yet another reason to worry.

Posted by mary @ 11:08 AM 3 Comments

Inflation! What Inflation?

Yahoo: Pay deals hit 15-year high

As PM Gordon states we have no inflation.... I am sure he must have his toes and fingers crossed when saying stuff like that on TV

Posted by mark @ 11:01 AM 6 Comments

Another cunning plan on the rocks

IFAonline: Construction downturn scuppers Browns housing plans

Gordon Browns ambitious house building plans are unlikely to be achieved because of a downturn in the construction industry, according to the Royal Institute of Chartered Surveyors (RICS). Falling demand for housing, coupled with the credit crunch, have caused construction firms to reduce their workloads, meaning supply issues are likely to continue supporting high house prices in the UK.

Posted by jack c @ 09:56 AM 15 Comments

The circus clowns are staging another performance !!!

Property Week: Caroline Flint to replace Cooper as housing minister

"Caroline Flint will take over from Yvette Cooper as housing minister after a cabinet reshuffle following Peter Hains resignation today. Work and pensions secretary Hain quit the cabinet today after his Labour deputy campaign donations were referred to the police. He said he wanted the time to devote to clearing his name." Is it too much to hope that there will ever be any, even passably, competent person who will take an active part in managing this,or any other country/economy.

Posted by fahrenheit451 @ 09:36 AM 6 Comments

Take it or leave it !

Reuters: Energy regulator slams npower for customer cut offs

Energy supplier npower has cut off more customers than any other company over the last few years and should do more to help those with payment problems, energy regulator Ofgem said on Friday, sparking protest from the German-owned company. Npower was the first major household energy supplier to announce double-digit price increases for its retail power and gas customers at the start of January.

Posted by alan @ 09:25 AM 1 Comments

Ways to fix the worlds financial system - By Gordon Brown ??

FT: Ways to fix the worlds financial system - By Gordon Brown ??

Not posted for any intellectual value, no need to read.

Posted by andrew @ 08:34 AM 3 Comments

Bullish? Bearish? Debt IS a four letter word!

US Radio Interview: Credit Bubble Collapse (Robert Prechter)

Bob Pretcher talks about the credit bubble and deflation - 2nd part of a 5 parter. Credit Deflation explained in the US - are we next? Does Bears ___ in the woods.

Posted by techieman @ 08:29 AM 7 Comments

Gold not gold stocks

Market Oracle: Gold Stocks - The Next Stock Market Sector to Crash?

Gold stocks could struggle at the same time as gold price goes up. Worth thinking about. Apologies to those not interested in alternative investments who see this as off topic!

Posted by happyrenterz @ 08:20 AM 11 Comments

Debt is not Prosperity

Business Week: How Real Was the Prosperity?

"We're just beginning to figure out how much of the nation's recent growth was the result of a credit-induced frenzy. Here are some guideposts" The US is ahead of us in this realisation, but we are catching up quick.

Posted by happyrenterz @ 08:06 AM 2 Comments

China Growth May Slow at Worst Time for World Economy

bloomberg: China is starting to gain control of its turbocharged economy, just as a U.S. slowdown raises the risks of doing so.

A narrowing trade surplus and declining money-supply growth are among the first signs that the world's fourth-largest economy is pulling back from its fastest expansion in 13 years. The government has raised interest rates six times in a year, restricted credit, frozen some prices and let the currency appreciate to damp growth and inflation. The risk is that, with months of effort to cool off China finally taking hold when the U.S. is already flirting with recession, both main engines driving the global economy may power down at the same time. ``As foreign demand deteriorates, China may overdo its tightening of policy and cause a sharp economic slowdown ``If the central bank raised interest rates too much, it would damp domestic demand and increase the danger of economic downturn.''

Posted by dangerous trading @ 05:17 AM 0 Comments

Sub-prime likely to hit Bank of China

AUSTRALIAN: to write off a quarter of the nearly $US8 billion ($9.3 billion) it holds in securities backed by sub-prime mortgages.

BANK of China appears increasingly likely to report a large write-down on its investments in US mortgage securities, illustrating the broadening reach of the global financial downturn - and how one of China's biggest lenders was less astute at avoiding the problem than it initially thought.

Posted by dangerous trading @ 02:51 AM 0 Comments

2 million Britons have two homes.

Daily Mail (Hate): 2 million Britons have two homes BUT property crash might put many in jeopardy

Plus some strange / crap forecast by Capital Economics, namely "But the most pessimistic forecast, from Capital Economics, expects a fall of 5 per cent this year followed by an 8 per cent fall in 2009." WTF "most pessimistic" ??? ONLY a fall of 5 % ??? WTF are they joking that it will ONLY be 5 % this year! More like 15 to 25 %!

Posted by ukuser1 @ 02:26 AM 2 Comments

The Sky is Full of Chickens ...

The Times: Mortgage approvals hit by credit crunch

The number of mortgages granted to new home buyers plunged to a record low last month as banks struggled with the credit crunch and potential buyers hesitated in the face of higher mortgage rates.

Posted by quiet guy @ 01:40 AM 1 Comments

Thursday, January 24, 2008

Zimbabwe here we come

Bloomberg: Forbes Says U.S. Dollar Policy Amounts to `Zimbabwe Economics'

The U.S. prefers a ``weak'' dollar because it helps the nation's exporters, Forbes said. ``That's Zimbabwe economics.''

Posted by happyrenterz @ 10:59 PM 1 Comments

'Helicopter Ben' good to his word!

bbc news: Deal reached on US economic plan

House of Representatives Speaker Nancy Pelosi said Congress would act on the deal "at the earliest date, so those rebate cheques will be in the mail".Some 117 million US homes will receive a rebate of up to $600 for individuals and up to $1,200 for married couples.Washington is moving fast to try to avoid the US falling into a recession. Good grief, now they're posting out greenbacks to everyone to prevent the collapse.

Posted by tick tock @ 10:09 PM 23 Comments

More cancelled developments

Manchester Evening News: Jitters shatter 12m dream

A 12m development scheme in Manchester's "up-and-coming" Northern Quarter has fallen victim to the credit crunch. All the apartments, priced at between 140,000 and 180,000, were sold in advance of work starting on the site, and buy-to-let investors handed over deposits totalling more than 500,000. A question mark hangs over the future of the investors' deposits. They are likely to be repaid only if a buyer is found for the site. "It would be wrong to believe that CLH will be the last, or largest, property-related casualty of 2008."

Posted by drewster @ 08:27 PM 2 Comments

They only go up! Prices? noooo... RATES!

Times: Tracker mortgages rising despite hopes for rate cuts

banks are raising the cost of borrowing on popular tracker mortgages, penalising homeowners who are taking out the loans in the hope of base rate cuts (AHH HA HH, they take trackers because "rates can only go down" I@IOTS listened to the impartial advice of the local EA). Britannia Building Society, the UKs second biggest building society, will today increase rates on its two-year discounted tracker mortgage by 0.15%Abbey, AL and Nationwide have raised rates in recent days. AL raised tracker rate from 5.74% to 5.94% per cent yesterday, Abbey increased rate on tracker for 100% loans from 6.84% to a massive 7.99%. SUBPRIME, SUBPRIME HERE WE COME!!

Posted by confused76 @ 07:37 PM 9 Comments

Sinking Ship

Brighton Argus: Millions of pounds to tumble from Sussex house prices

I thought it was worth reposting this. I live in the Brighton area and there was a notable lack of paper copies of the Argus this evening. Might Brighton's estate agents have been buying them up by the barrow load in a last ditch effort to save their gold plated lifestyles?

Posted by captain sensible @ 05:33 PM 19 Comments

The mother of all bailouts required

Times: We must name our price

"Governments are going to have to bail out the banks; in return they must change their ways" "Either they will have to accept a long period of financial paralysis, leading inevitably to a deep global recession and maybe even a Japanese-style decade of depression or they will have to step in with a Plan B, involving public sector intervention of some kind that overrules the judgement of market forces."

Posted by happyrenterz @ 05:08 PM 5 Comments

Bubble bubble bubble ble ble ble ble... pssssssss... bbbang!!

Herald: Average Aberdeen house price now over 200k

The average house price in Aberdeen in the fourth quarter of last year fell by 4% to 199,589. Overall, however, the average price rose by 26% to 202,479 over the year. The latest research by Aberdeen City Council shows that 8,594 properties were sold through in 2007, 3342 more than the previous year. Whoooopp! In 1997 the price/earnings ratio for Aberdeen was 3.72 and is now 7.83. The corresponding rises for Scotland are 3.38 to 6.12 and for the UK 3.58 to 9.19 (so sustainable!!). The average price of a detached house in Aberdeen's west end over last year was 675,450. Sure, sure... bbbanngggggg!!!

Posted by confused76 @ 04:33 PM 10 Comments

Great example of VI lies...

LudlowThompson: Increase in first time buyers

So blatantly misleading that it is actually laughable. "Increase in FTBs from 10.1% in Nov to 13% in Dec" Ah right, so MORE FTBs in the market? Don't think so - suspect that the the rapidly-decreasing number of FTB is being overtaken by the even-more-rapidly-decreasing number of FTB. NAEA President, Stewart Lilly says: We hope this positive trend will continue into 2008..." Massive c*ck. Unsurprisingly can't seem to find a link to the actual survey on NAEA website too easily...

Posted by doom&gloom @ 03:13 PM 7 Comments

More bad news from the housing market - and it won't be the last

MoneyWeek: Mortgage approvals at record low

In December the number of new mortgage approvals fell to their lowest level since records began. Will the Bank of England respond with a rate cut? And, even if it does, will it make any difference?

Posted by mary @ 02:43 PM 4 Comments

Seasoned property investors can look forward to excellent returns and strong capital growth

Mortgagestrategy: Buy multi-lets at auction now, say Property Show pundits

Simon Zutshi, founder of the Property Investors Network, says: With the current market conditions, 2008 is a fantastic time to buy property. The market is expected to bounce back and long term seasoned investors can look forward to excellent returns and strong capital growth. 'All that is needed is a well thought through personal strategy, as well as strong negotiation skills. Zutshi adds that multi-let properties present the most profitable returns for investors as these types of properties are currently experiencing high demand.

Posted by jack c @ 02:28 PM 12 Comments

My heart is bleeding

guardian: Meet Robert Tchenguiz: he's lost 560m and counting. But he says the yacht is safe

Rumours that heavy paper losses had forced him to sell his Monaco-moored yacht were laughed off last weekend. He told one newspaper: "So I've lost a lot of money but I'm not in trouble as people keep saying. It's just a case of taking the rough with the smooth, that's all." Like the name of the article suggests - "Keep counting" - I wonder how soon he'll tire of the rough?

Posted by inbreda @ 02:27 PM 8 Comments

News From America

CNN Money: Housing prices to free fall in 2008

The worst housing financial crisis in decades is only going to get worse, a Merrill Lynch report said Wednesday. The investment bank forecasted a 15 percent drop in housing prices in 2008 and a further 10 percent drop in 2009, with even more depreciation likely in 2010.

Posted by submedia @ 02:05 PM 5 Comments

Liverpool property market in Trouble

Hiday.net: Ferry Cross The Mersey

As the UK property crisis begins to worsen some areas will be hit harder than others. One such place has to be Liverpool, where there are a glut of city centre apartments that are still on the market for ridiculous prices, still waiting to be sold. Estate agents in the city of Liverpool have been accusing certain sections of the media of 'scare mongering'. However there objections are falling on deaf ears and quite rightly so!

Posted by john84 @ 01:42 PM 5 Comments

And the best Joke of the year is...

FT Alphaville: And the equity derivatives house of the year is

Yes, you guessed it: Socit Gnrale. Awarded just this month by Risk magazine, SocGen bagged the gong for equity derivatives house of the year. "We managed the existing book very well because we decided some time before the crisis to be long volatility and be less sensitive to correlation, so the losses were minimal. We suffered on our statistical arbitrage trading activity, but that was just for one month, and minimal compared to some hedge funds or other banks. Overall, our trading activities will be approximately flat compared to last year, which is a good performance," remarks Christophe Mianne.

Posted by robertpaulson @ 12:25 PM 0 Comments

Seems like a bit of a theme in France

FT Alphaville: Sep 2007: French Bank hit by "rogue trader"

Crdit Agricole/Calyon hit by rogue traders It seemed the world was overdue for a rogue trader saga and Crdit Agricole has stepped in, announcing Tuesday evening it will suffer a 250m ($348m) hit to Q3 profits at Calyon, its investment banking unit, after rogue traders in its New York office built up a massive unauthorised credit position.In the context of a more turbulent trading environment in September, contrary to July and August, Calyons third-quarter net result is likely to come in significantly below that of the same period in 2007 but nonetheless remain in profit, the statement said. Calyons first-half net income was 997m, up 8 per cent from a year earlier, the bank said at the end of August, reports the FT. The news came after Tuesdays markets close.

Posted by lvmreader @ 10:58 AM 0 Comments

Mortgage lending for house purchase 50% down

Firstrung: UK December mortgage approvals fall to a record low - BBA

The slowdown in the UK housing market appeared to accelerate in December, with the number of mortgages approved for house purchase falling to the lowest since records began. In its monthly analysis of the mortgage market, the British Bankers' Association said the number of mortgage approvals for house purchases was 42,088, compared to 43,944 in November. This is an all-time record low, and well below the previous six month average of 53,781.

Posted by converted lurker @ 10:19 AM 14 Comments

How financial bail-outs are destroying capitalism

MoneyWeek: Why banks cant afford to save the bond insurers

"Arty types often like to sneer at those involved in the financial sector, dismissing them as dull grey suits. But recent events have shown that, when they put their minds to it, the suits can be far more creative than the media studies students of this world. Just look at all the creative financing thats been going on. I know, lets take 100 junk-rated subprime mortgages, bake them into a cake, keep the worst bits for ourselves, then chop the rest into 80 AAA-rated slices and sell them! That idea took some imagination."

Posted by mary @ 09:50 AM 4 Comments

Oh please!.............. What is the French for

FT: SocGen uncovers 5bn fraud

The Dog ate my homework. It was a rogue trader, that's it. It wasn't my signature on those trades.
Europes battered banking sector was dealt a fresh blow after Socit Gnrale, Frances second-largest listed bank, said it had uncovered a fraud by a single trader, forcing it into an emergency 5.5bn share issue. Daniel Bouton, SGs long-standing chief executive and chairman, had an offer to resign turned down by the banks board

Posted by lvmreader @ 09:47 AM 17 Comments

Note Comment 31

Rpbert Peston Blog: Oct 2007: Humiliation of UBS

Anyone with a functional cerebral cortex working in the debt markets has been onto the Euro sham for at least 15 months. ClubMed banks (French, Italian, Spanish, Greek and Portuguese) are in this CDO nigthmare to the hilt. They will make British and American banks look like paragons of virtue.

Posted by lvmreader @ 09:45 AM 0 Comments

and there we have it...

cnn: Recession 2008: How bad it can get

Many economists are predicting a short, shallow recession. But there's also a significant risk of a more serious economic decline.

Posted by mark @ 09:32 AM 3 Comments

Estate agent goes missing...

Argus - Local Brighton paper: Crash

The **** is hitting the fan.

Posted by kss @ 08:16 AM 28 Comments

Output has fallen by 6% since Q1 2007

Scottish financial services 'in recession': The Scotsman

PLUNGING stock markets and credit crunch effects have hit Scotland's financial services sector hard. And some economists warn that the sector is now formally in recession. The sector output fell by 3.4 per cent in the third quarter of last year according to Scottish Government statistics.

Posted by scunnered @ 07:16 AM 5 Comments

PMQ write up in the Spectator

Spectator.: Dogged resistance from Brown over Northern Rock

I bit off track but it is a light hearted read in these depressing times. Some good sound bites llike "Brown is like a used car salesman hes gone from Prudence to Del Boy without even touching the ground" and Its a sub-prime deal from a sub-Prime minister.

Posted by who stole my pension? @ 05:13 AM 1 Comments

EU has slammed Britain in its annual report card on public finances

Telegraph: EC shows UK yellow card over budget deficit

Oh dear, it looks like the Government has borrowed to much money and people are getting concerned!! The Brussels watchdog said the Government had stretched fiscal policy to the limits and would soon have to "constrain expenditure" to avoid falling foul of the EU's Stability and Growth Pact, a polite way of saying it may have to slash spending during an economic downturn - making matters worse.

Posted by who stole my pension? @ 04:46 AM 13 Comments

U.S, banks are being

FT: Banks pressed to bail-out bond insurers

US banks are under pressure from New York states insurance regulator to provide $15bn to support struggling bond insurers. Concern that rating agency downgrades of the insurers could force a fresh round of writedowns by banks, The banks still feel stung after a failed bail-out plan backed by the US Treasury under which they would have bought assets from SIVs. Some expressed scepticism that Mr Dinallo would be able to persuade banks to provide the funds. Concerns about the future of MBIA and Ambac grew last week when Fitch Ratings downgraded Ambac from triple-A to double-A. The business model of both companies depends on a top-level credit rating. The Fed, Treasury and SEC have set up at a group to examine risks to the financial system might arise from problems at the bond insurers

Posted by who stole my pension? @ 04:41 AM 0 Comments

The first of many tax rises I suspect - Council Tax to rise by 5%

BBC: Council tax 'set to rise by 4%

I suspect that this will be first tax rise of many. Council taxes will now rise by 5%. Have a look at how your council spends your money. You will probably find that a massive amount (30%) will be spent on their inflation proofed index linked council pensions. Next increase is fuel tax - this also goes up in April. It's a booming economy - booming taxes, booming food prices, booming fuel prices - more economic miracles from Gordon!

Posted by who stole my pension? @ 04:02 AM 8 Comments

Wednesday, January 23, 2008

C'mon, may all these brokers, packagers, rubbish publishers go belly up real soon!

Tgraph: 'What Mortgage' publisher warns on profits

"Charterhouse Communications said its advertising revenue has squeezed since last summer's credit crunch triggered a sharp downturn in mortgage lending, with lenders pulling sub-prime products off the market and tightening their lending criteria"

Posted by confused76 @ 11:13 PM 5 Comments

London housing market dead in the water

Times: Citigroup cuts London jobs on UK recession fears

Sure we must not be happy that a few thousand people lose their jobs, but let me tell you City salaries have ballooned in the past five years for otherwise mediocre skills and qualifications (e.g. the "experts" that have wrecked the global financial services). Easy money - seemingly never ending - fueled the borrowing of 10x more money and propped the London housing bubble. As always, markets are set at the margins. 8k people who lose their jobs make 100k people feel less "secure" about their job prospects. And high rents and house prices evaporate. Kiss the London house market goodbye!

Posted by confused76 @ 11:03 PM 2 Comments

U.S. Stocks Rise, Erasing Decline, as Financial Companies Gain

Some light relief...

The Daily Mash: Global Economy Now Run By F**knuts!

A satirical look at the recent Fed rate cut.

Posted by a bear in the woods @ 06:40 PM 4 Comments

Crackdown on BTL

BBC: Review of private rental market

The government has the great ability to screw everything they touch. I have great hopes they do irreparable damage to these leaches! With the tremendous "growth in negative profit" both from rental and capital appreciation, it only takes an announcement like this to push thousands of these leaches to sell in a hurry. Plus Inland Revenue will crack down on the sector as well. BTL armageddon in April as CGT changes?

Posted by confused76 @ 06:12 PM 7 Comments

A MWAHAHAHAHA from Mr confused76 coming up shortly

LANDLORD : House Price Crash? What crash?!

Forecasts of doom and gloom in the property market have not been in short supply of late, both for the residential and buy-to-let sectors. This week has been no exception, but such views are far from universally held...

Posted by landedgentry @ 05:19 PM 6 Comments

What the US rate cuts mean for gold

MoneyWeek: What the US rate cuts mean for gold

The Fed showed yet again yesterday that it is prepared to sacrifice the dollar and inflate its way out of the current mess. That means gold should now resume its flight towards $1000.

Posted by mary @ 05:15 PM 3 Comments

UK banks don't have enough reserves

FT: Sore bottoms in store for UK banks (especially HBOS)

UK banks don't have enough reserves if write-off levels go up to 1992-1993 levels. Scary plot shown. Run for cover when hpc starts in earnest.

Posted by happyrenterz @ 05:03 PM 14 Comments

They lose $5.3million per HOUR and pay the same bonuses as last year?

Telegraph: Citigroup bonuses 'flat', even as job cuts loom

Citigroup will hand out more than $11bn (5.6bn) in pay and bonuses to its investment bankers today, roughly the same as last year, despite a collapse in fortunes at America's largest bank. About 100,000 staff around the world will share in the bonus pool, which makes up the bulk of the markets and banking division's $11.6bn of compensation and benefits. It comes as the industry braces itself for more job cuts, with rumours that Citi itself is planning to announce 10,000 redundancies in March - on top of the 21,400 axed in the past 12 months. Citi insiders said the "overall bonus pool will be pretty flat but there will be a greater divergence the stars will be kept and a strong message will be sent to those who haven't pulled their weight".

Posted by lvmreader @ 03:21 PM 9 Comments

Why was this a surprise to anyone?

CNN Money: McLean: Bond insurance problems (Video)

McLean: Bond insurance problems 2:49
Fortune's Bethany McLean says there could be another credit crunch on the horizon, this time affecting bond insurers. Explained beautifully

Posted by lvmreader @ 02:33 PM 2 Comments

Nationwide puts up mortgage rates

BBC: Nationwide puts up mortgage rates

The UK's biggest building society is the latest lender to hike rates despite no movement from the Bank of England. "We shouldn't expect to see trackers becoming much cheaper in the near future until this uncertainty has worked its way through the market."

Posted by doomwatch @ 01:50 PM 4 Comments

More "fine tuning", coming up!

Bloomberg: Bernanke to Cut Rates Further, Faster to Buoy Growth

"Federal Reserve Chairman Ben S. Bernanke has decided inflation concerns have faded enough to let him cut interest rates further and faster to keep the U.S. from tipping world economies into recession". " Futures trading suggests the Fed may follow up with a cut of as much as another half-point Jan. 30, bringing the decrease to 1.25 percentage points in eight days".

Posted by alan @ 01:37 PM 3 Comments

Another terrible, terrible day DOWN -219.00 to 5521.1

BBC News: FTSE 100 @ 1:55PM

I think that people, generally, are beginning to realise we are in a real, real mess!

Posted by hpwatcher @ 01:26 PM 10 Comments

Go Yvette, go! After the HIPS please kill the BTL too!

Guardian: Government to review private rental sector

What a great news! The government wants to regulate the private rental sector! with landlords already not covering cost of capital I can see quite a rush for the exit. MWAUUU AHAHAH HA HA HHAHAHAHHAHA HAAHAHHAH HAHAH AHHAH

Posted by confused76 @ 01:21 PM 15 Comments

Bearish Economic Outlooks

Merrill Lynch: The Growing Global Credit Pandemic

Merrill Lynch: Many investors still believe that the credit crisis is purely a US subprime problem. Nothing could be farther from the truth, in our opinion. There appears to be a growing global credit pandemic. Central banks only control the price of credit, and not the availability of credit. Watching central banks base interest rates is, of course, important. Watching credit availability is more important. I will paste an FT view by George Soros in comments.

Posted by happyrenterz @ 12:12 PM 10 Comments

Sinking? More like Plummeting!!

Mortgage Introducer: Connells reports sinking approvals

Whole Short Article: Connells Survey & Valuation's December data saw mortgage approvals plunge by 43 per cent when compared to the previous year. This is a 21 per cent slump on November's data and on top of a 0.6 per cent easing of December's house prices to bring the average home's value to 215,417.

Posted by renting2 @ 12:01 PM 6 Comments

Student loan to be put on credit file

Firstrung: First time buyers could be turned down for mortgages due to student loans

The online mortgage company mform.co.uk warns that changes to credit checks carried out by mortgage lenders will mean that more first time buyers will be turned down for loans. Later this year, information relating to student loans will be incorporated into people's credit files. This means that missed payments to the student loan company will show up as a black mark on credit ratings. The average age of a first-time buyer is 29, and many of them will have student debts.

Posted by converted lurker @ 11:52 AM 10 Comments

No room for movement and no easy way out

Financial Times: King fails to soothe lenders

Turning loans into bonds and selling them to raise funds has become a linchpin of the UK mortgage industry, but since August banks have found it almost impossible to sell any such retail mortgage-backed securities because of the crisis in the money markets. -There is a risk, if house prices fall, of a vicious cycle developing with declining collateral values leading lenders to tighten credit further, some economists say. -The only thing that really stops that is if the Bank of England steps in but the Bank will say they dont set rates to keep mortgage lenders happy, said Alan Castle at Lehman Brothers.

Posted by andrew @ 11:40 AM 3 Comments

Negative equity ahoy

MoneyWeek: Prepare for negative equity and repossessions

2008 is going to be a very bad year for the housing market. First-time buyers will find it harder than ever to get on the ladder, but it's the homeowners perched precariously on its lowest rungs who should worry most.

Posted by mary @ 11:09 AM 5 Comments

The parallels with previous crises

Independent: The Big Question: What can we learn from previous stock market panics?

Some measured analysis of past financial crises and the implications today. Much needed in our febrile atmosphere at the moment.

Posted by letthemfall @ 10:28 AM 0 Comments

A firm hold then

BBC: Bank votes 8-1 for hold in rates

Any guesses who voted for a cut?

Posted by geed @ 09:58 AM 13 Comments

It's different this time!!

Financial Times: The worst market crisis in 60 years

The current financial crisis was precipitated by a bubble in the US housing market. In some ways it resembles other crises that have occurred since the end of the second world war at intervals ranging from four to 10 years. However, there is a profound difference: the current crisis marks the end of an era of credit expansion based on the dollar as the international reserve currency. The periodic crises were part of a larger boom-bust process. The current crisis is the culmination of a super-boom that has lasted for more than 60 years.

Posted by cheekie charlie @ 09:45 AM 0 Comments

No more swervin

Times: My hands are tied, says Bank Governor Mervyn King, as he braces UK for downturn

In a grim assessment of the economy, Mervyn King says that the UK could endure a "possibly quite sharp" slowdown this year. In 2008 it is likely that a less buoyant housing market will go hand in hand with slower growth of consumer spending. In the short run, that will slow economic activity, possibly quite sharply.

Posted by doomwatch @ 09:42 AM 6 Comments

Fed staves off one crisis, opens door to another

Times UK: Fed Establishes Another Baleful Landmark

Gerard Baker in the Times talking something vaguely approaching sense for once. His judgement is that even if the Fed cut had more justified reasons than a panicked reaction to a stockmarket drop, it is still going to be hard for Bernanke to retain credibility now: "Mr Bernanke is going to have a hard time dispelling the notion that he did not engineer the Feds biggest interest-rate cut in a generation primarily in response to a swoon in equity markets"

Posted by an bearin bui @ 09:38 AM 0 Comments

And while the Fed cuts, UK borrowers are squeezed yeah!

MoneyNews: Nationwide mortgage rates 'raised for some products'

Certain mortgages provided by Nationwide will have higher rates from January 23rd, the building society has announced. For example, a two-year tracker with a 599 fee which used to have a 5.58 per cent rate is now on offer at a rate of 5.68 per cent. Meanwhile, a lifetime tracker with no fee will be provided at a 5.89 per cent rate, having previously had a 5.74 per cent rate. What did StuarzLaw say?

Posted by confused76 @ 08:37 AM 6 Comments

"Locked" is the word... BTL will be next!!

Times: Commercial property fund investors face continued slide in asset prices

"Hundreds of thousands of retail investors locked into commercial property funds are set for six months of further pain as prices of shops and offices continue to slide, but the market is expected to start to bottom out in the second half of this year." Greeeeeeed is gooooood!

Posted by confused76 @ 08:34 AM 0 Comments

Property market on the brink of collapse

Times: Property market reels as gloom descends on commercial and residential sectors

YEEEEEEEEEEEESSS!! Britain's property market was dealt a double blow yesterday as the prices of shops, offices and warehouses suffered their fastest monthly fall for 21 years and Taylor Wimpey, the country's largest housebuilder, said that the spring housing market would be late and subdued

Posted by confused76 @ 08:28 AM 10 Comments

Helicopter ben's crash-landing in the making...

Will the cure be worse than the disease?: Fortun/CNNMoney

"Politicians are scrambling to offer a stimulus package, and Fed Chairman Ben Bernanke is slashing interest rates. But they may be paving the way for a bigger calamity down the road."

Posted by trough2010 @ 08:23 AM 1 Comments

Another Bung for Home Owners on the Way?

Telegraph: Fed's panic rate cut ups pressure on BoE

"Mr King hinted that rates were set to fall, saying that, at their current level of 5.5 per cent, borrowing costs were stifling consumer spending. Experts are forecasting a cut of 0.5 percentage points. A homeowner with a 25-year 200,000 repayment mortgage would be around 60 a month better off."

Posted by quiet guy @ 08:10 AM 3 Comments

Tuesday, January 22, 2008

Phew...Mervyn hasn't blinked yet!

Sky News: Spend Less, Save More Warns Bank Boss

The head of the Bank of England has warned that the next year will pose the greatest economic challenge to the UK for a decade, after another day of turmoil on the international markets. Mervyn King said UK economic growth could slow "quite sharply" in the near term. Any hopes of a similar emergency move in Britain were quickly ruled out by the Bank of England, which said it had no plans to bring forward next month's meeting of the Monetary Policy Committee, which sets UK interest rates.

Posted by alan @ 09:54 PM 17 Comments

Mortgage rates now detached from BoE rates

Independent: Nationwide becomes the latest lender to raise mortgage rates

The cost of borrowing money is continuing to rise this month, despite a cut in the Bank of England base rate at the start of December and a sharp reduction in Libor, the rate at which banks lend to each other, over the past few weeks. Yesterday, Nationwide, the UK's largest building society and fourth-largest mortgage provider, became the latest lender to announce price rises across its tracker mortgage range. It will increase rates for new borrowers by up to 0.15 percentage points as of tomorrow.

Posted by uncle chris @ 09:49 PM 9 Comments

How is this any different to what Goldman Sachs did?

CNN Money: Bayou funds co-founder gets 51 months

Bayou funds co-founder James Marquez was sentenced to 51 months in prison for a scheme that deliberately misinformed investors. The co-founder of several of Bayou Management LLC's hedge funds was sentenced to more than four years in prison Tuesday for a scheme to defraud investors. U.S. District Judge Colleen McMahon in Manhattan sentenced James G. Marquez, 59 to 51 months in prison, to be followed by two years of supervised release. He also was ordered to pay nearly $6.26 million in restitution. "I made the terrible choice to take the easy way out when things started going wrong at Bayou," Marquez said. "My actions and inactions directly injured investors of Bayou."

Posted by lvmreader @ 09:45 PM 2 Comments

State-sponsored media: The City and the Credit Crunch

BBC: The City: Is the Party Over?

Greg Wood reports on the effect of the credit crunch on the City. From the trading floors of Canary Wharf to the private equity Houses of the West End, he hears tales of fear, greed and the most serious convulsion to hit the City in a generation as bonuses are cancelled and jobs cut. Is the party over for one of Britain's major industries, and is the rest of the nation going to have to pick up the bill?

Posted by dohousescrashinthewoods @ 09:39 PM 0 Comments

Ztuart Law'z reazoned analyziz

Assetzzz: Sustainable Growth for House Prices Most Likely Outcome for 2008

"It is difficult to see anything other than another successful year ahead for UK buy-to-let investors in 2008, as reducing numbers of homebuyers drives up rental demand and the Bank of England cuts mortgage rates. When interest rates do inevitably fall, property investors will benefit from a significant reduction in borrowing costs and can expect excellent returns on investment. The current climate poses an excellent opportunity for first time buyers who should strike while the iron is hot."

Posted by little professor @ 08:48 PM 10 Comments

Britain down the swanny!

MSN Money: UK Recession A Certainty

No debate The UK is definitely heading for a recession. In fact, even if the US had the healthiest economy on the planet, the UK would still be recession-bound. Our consumers are in more debt than their American counterparts. Our houses are more over-valued. We are even more dependent on a small niche area of the economy - the City of London - than Americans are. So we have even further to fall. Cripes! Methinks we are going to see alot more of this type of article in the coming months!

Posted by crashhorizon @ 08:41 PM 0 Comments

HPC in US a potential catalyst to HPC in UK

Citywire: Fed's emergency cut forced by housing market correction

In a statement the Fed said: 'While strains in short-term funding markets have eased somewhat, broader financial market conditions have continued to deteriorate and credit has tightened further for some businesses and households. 'Moreover, incoming information indicates a deepening of the housing correction as well as some softening of the Labour market.'The announcement was followed swiftly by a statement from US Treasury Secretary Hank Paulson who echoed the Fed's words.

Posted by jack c @ 07:53 PM 0 Comments

National Association of Estate Agents (NAEA) reported a chilly December housing market

Citywire: House prices will continue to fall, surveyors say

House sales will continue falling, depressing the market and contributing to a decline in property prices, according to the Royal Institution of Chartered Surveyors.The first snapshot of UK mortgage lending in December is due to be published by the British Bankers Association (BBA) on Thursday. It is hard to believe that the numbers in the BBA report will paint anything other than a fairly gloomy picture, says RICS in a weekly report.

Posted by jack c @ 07:30 PM 0 Comments

Goldman's guy will help the Canadians..?

Bloomberg: Bank of Canada Lowers IR, Signals Further Cuts

The Bank of Canada lowered its main interest rate a quarter point, the second reduction in as many months, and signaled it will act again to shield the economy from the threat of a recession in the U.S. The decision is the last for Bank of Canada Governor David Dodge, 64, who is retiring at the end of the month. Mark Carney, a 42-year-old former Goldman Sachs Group Inc. investment banker, takes over on Feb. 1.

Posted by alan @ 07:15 PM 3 Comments

If only.... :)

New York Times: Feeling Misled on Home Price, Buyers Sue Agent

CARLSBAD, Calif. Marty Ummel feels she paid too much for her house. So do millions of other people who bought at the peak of the housing boom. What makes Ms. Ummel different is that she is suing her agent, saying it was all his fault. Ms. Ummel claims that the agent hid the information that similar homes in the neighborhood were selling for less because he feared she would back out and he would lose his $30,000 commission. Real estate lawyers and brokers say the case, which goes to trial in North County Superior Court on Monday, is likely to be the first of many in which regretful or resentful buyers seek redress from the agents who found them a home and arranged its purchase.

Posted by lvmreader @ 07:14 PM 8 Comments

Will Baby Boomers add to the Housing Bust?

Economist: Baby boom and bust

For three decades baby-boomers have helped push prices up: they settled down, then bought bigger houses and second homes. But as the first of them celebrate their 65th birthdays in 2011, this will change. The old sell more homes than they buy, and the ratio of old to working-age people is expected to grow by 67% over the next two decades.

Will the younger generation be able to buy all the homes on the market?

Posted by enuii @ 07:11 PM 5 Comments

Even American Express has a sudden and broad-based rise in delinquencies

Salt Lake Tribune: Mortgage crisis spills over into credit cards

No but it is all ok, really!

The luster on all those silver, gold and platinum credit cards is getting tarnished. For the past few years, banks that issue credit cards have aggressively wooed affluent customers with lavish perks and fat credit lines. Now, that high-end strategy is coming back to bite the banks. There are growing signs that some of those consumers are having a hard time paying their bills. It is the latest in a series of woes for U.S. financial institutions, which are struggling to contain a series of credit-related problems after years of strong profits. Banks have lost billions of dollars from soured home loans and mortgage-related investments. And defaults on commercial and industrial loans could rise later this year if the economy weakens further.

Posted by lvmreader @ 07:07 PM 2 Comments

Oh, but they'd never miss their credit car payments......

Philly.com: Awaiting recession, wallets tighten

Affluent shoppers have joined low- and middle-income consumers in pulling back, so corporate results have suffered everywhere - for example, upscale jeweler Tiffany & Co., high-end department store Saks Inc. and low-priced chains such as Sears and Kmart stores. Also, more people are having trouble paying their bills. AT&T said recently it was disconnecting more phones because of delinquent customers. American Express Co., whose customers are generally affluent, said it expected slower spending and more missed payments on credit cards throughout 2008. Anecdotal reports suggest consumers are paring where they can - putting off a teeth-whitening, perhaps, or trying to wring a few thousand more miles out of an old car before trying to replace it.

Posted by lvmreader @ 07:02 PM 1 Comments

Hmm, mortgage?, credit card?, mortgage?, credit card?

Guardian: ABS card segment seen averting subprime chaos

ABS transactions offer various layers of protection against default. Losses are allocated from the lowest-rated tranches on up. The excess spread is the first line of defense, followed by any additional forms of credit enhancements that may be added. If losses exceed those, bottom "BBB" tranches would begin to incur losses before traveling up the spectrum to AAAs. Consumer payment behavior in the credit card segment also has been different from other consumer asset types. "A lot of credit card companies are reporting that they have borrowers who stay current on their credit cards even though they are seriously delinquent on their mortgage," said Braggs. "Consumers realized they needed their credit."

Posted by lvmreader @ 06:44 PM 0 Comments

A collection of Economists views positive and negative

seekingalpha.com: Fed Rate Cut: Victory or Defeat?

"This is a powerful adrenaline injection for the markets. But one knows that with this kind of drug you usually need to increase the dosage... The Fed has taken timely action." LBBW analyst Jens-Oliver Niklasch "I hope I'm wrong, but I think the rally will be short-lived... I think we could be looking in the FTSE testing 5,000 within the next couple of weeks, and as far as the Dow is concerned you're probably looking sub 11,000... I'm shocked that they thought that they needed to do it and I'm surprised that they haven't explained it better." Neil Parker, RBS

Posted by happyrenterz @ 06:44 PM 0 Comments

Any of this sound familiar? Replace Electricity with Subprime....

Wikipedia: Enron: The Smartest Guys in the Room

and replace California with global... Enron: The Smartest Guys in the Room is a 2005 documentary film based on the best-selling 2003 book of the same name by Fortune reporters Bethany McLean and Peter Elkind, a study of one of the largest business scandals in American history. The film examines the collapse of the Enron Corporation, which resulted in criminal trials for several of the company's top executives; it also shows the involvement of the Enron traders in the California electricity crisis. As an analysis of corruption in corporations the film gives a realistic look at corporate culture and the inherent problems within. The movie presents two mechanisms for motivating a vastly immoral and profit-driven corporate culture; namely the vitality curve and the Milgram experiment.

Posted by lvmreader @ 05:35 PM 5 Comments

Why the Fed's panicky rate cut won't save the US economy

MoneyWeek: Why the Fed's panicky rate cut won't save the US economy

Dont panic. Its the number one rule in a crisis. But it seems that the people who run the global economy didnt read that particular rule book...

Posted by mary @ 05:16 PM 1 Comments

Europes solid, sound fundamentals

FT: EU blames market turmoil on US policy

The main reason [for the turbulence] is the risk of a recession in the US. Its not about a global recession. Its about a recession in the US, because big imbalances have built up over the years in the US economy a big current account deficit, a big fiscal deficit and a lack of savings, said Joaqun Almunia, the European Unions monetary affairs commissioner. Mr Almunia contrasted imbalances in the US economy with what he described as Europes solid, sound fundamentals. We have a positive current account position. We have a level of savings that is the level required to finance our investments. We have improved our fiscal positions a lot. Moreover, we havent got subprime mortgages in our financial systems, Mr Almunia said.

Posted by happyrenterz @ 04:47 PM 7 Comments

Did we say 1%? ...Um, we actually meant any amount of money as all we have to do is order some more printing presses!

Bloomberg: Bush Open to Larger Economic Stimulus Package

The Bush administration today left the door open for a larger stimulus package than the $150 billion plan the president already has announced to avert a recession. ``I've not heard anybody suggesting larger than 1 percent, but that doesn't mean, behind closed doors in their negotiating discussions, they aren't bringing that up,'' White House press secretary Dana Perino said.

Posted by tyrellcorporation @ 03:37 PM 4 Comments

The worst is yet to come

MoneyWeek: Share prices plummet but are they cheap enough to buy yet?

The truth is, yesterdays seas of red could be put down to one thing. Investors across the world have finally woken up to reality. The Federal Reserve cant save us from a global recession

Posted by mary @ 01:42 PM 1 Comments

Will house prices crash?

moneysavingexpert.: Poll: Will house prices crash?

Opinion is majority bearish, with 75% voting for no change and below (to 20% drop) in 08. It's not really a question of will anymore, more how much.

Posted by doomwatch @ 01:26 PM 3 Comments

Big Trouble In Little China!

Hiday.net: Buying Property In China

There is further evidence pointing towards the possibility of a global property crash - China has been achieving spectacular economic growth in the last ten years and is an excellent country for those interested in property development. There are numerous opportunities available to the discerning investor. However individual property investment can be a risky venture if you have not done your homework properly. However individual property investment can be a risky venture if you have not done your homework properly. The Chinese government fearing a property bubble is trying to curb foreign investment which at present accounts for nearly 50% of all new property development projects in the major cities.

Posted by john84 @ 01:20 PM 0 Comments

Desperation stakes.

BBC: Fed cuts interest rates to 3.5%

The Federal Reserve has cut US interest rates to 3.5%, a shock three-quarters of a percentage point reduction

Posted by holding out @ 01:09 PM 9 Comments

Shock as FED jump to cut rates with immediate effect.

This news just in and just buried by the Beeb

BBC "News": Morrisons enjoys bumper Christmas

MEMORANDUM: All Staff
From: Director General
Subject: Today's agendas

Christmas retail figures better than expected - ignore and favour gloomy outlook in stock market for prominent positions.

Note to business editors: Next rate cut decision is in two weeks

Posted by paul @ 12:59 PM 2 Comments

And the stock market is going to recover?

Yahoo News: Russia bombers to test-fire missiles in Atlantic

MOSCOW (Reuters) - Russia on Tuesday sent two long-range bombers to the Bay of Biscay, off the French and Spanish Atlantic coasts, to test-fire missiles in what it billed as its biggest navy exercise in the area since Soviet times. British and Norwegian Tornado and F-16 jets were escorting the Russian 'Blackjack' bombers, Interfax reported, quoting the Russian Air Force. However, the French Defence Ministry spokesman said his country had been informed about the Russian exercises. Firing missiles off the coastline of two members of the NATO military alliance is the latest in a series of Kremlin moves flexing Moscow's military muscle on the world stage.

Posted by lvmreader @ 12:56 PM 4 Comments

Spend Spend Spend (Just like Viv Nicholson)

BBC: Millions 'spend more than income'

Five million people, or one in 10 adults, spend more than they earn on a monthly basis, according to financial comparison website Uswitch. The website said a further fifth of adults have no spare money left at the end of the month. Half of those living beyond their means rely on overdrafts and credit cards to plug the gap, it said. The findings come amidst widespread concerns that higher debts may push more people into insolvency this year.

Posted by jack c @ 12:28 PM 2 Comments

Wishful thinking? If true, these folks really are determined

daily mail: Hopes of global rate cut sparks FTSE revival after early morning slump

The stock market suffered wild fluctuations in early morning trading today, dipping 200 points on opening and recovering as investors snapped up bargain shares. The sudden drop in shares sparked rumours this morning that global central banks, including the Bank of England, could be considering co-ordinated emergency rate cuts.

Posted by hpwatcher @ 12:19 PM 11 Comments

For those of us who are not up to speed with the vagaries of financial mumbo-jumbo

The Corporation: Q&A: Stock market falls

Global stock markets are into their second day of hefty falls. On Monday, European markets suffered their most severe falls since the attacks of 11 September 2001. Why have they suddenly been falling so sharply and can anything stop them?

Posted by george monsoon @ 12:09 PM 2 Comments

Had Me In Stitches!!

Youtube: House PRice Crash

I'm surprised this hasn't been submitted before given the car reg at the end - apologies if it has, but well worth a second watch!

Posted by inbreda @ 12:05 PM 5 Comments

The Sick Man of Europe?

Independent: Public borrowing smashes forecasts to hit record high

Whilst re-run after re-run of statements about the stability of the UK economic miracle are being delivered by Gordon Brown and senior members of his cabinet the question must be asked, "why has public borrowing soared to record levels if the economy has been and is still in such great shape?" According to the Office for National Statistics (ONS) net public sector borrowing hit an all-time record in December of 7.8bn Trevor Williams, the chief economist at Lloyds TSB corporate markets highlighted the concern with the figures stating that, "The numbers mean that fiscal policy is no longer an effective tool to deal with a weaker economy and we are only left with monetary policy and the Bank of England."

Posted by denzil @ 12:04 PM 0 Comments

Criminal neglect to keep parasites alive

Timesonline: Browns Black Wednesday

Sometimes an article is written that clearly puts the feelings of any educated, non-corrupt person out in the open. This is one of those articles. How could Brown have been so blind and how can we reward parasitic gamblers, like the Hedge-funds who bought into a failed company and now look to be getting a big pay-off thanks to the British tax payer - who will see none of the money ever again. The BBC keep going on about 24Bln GBP, but we all know it is 55Bln and growing. Government debt is huge and about to get a lot bigger. Brown has bankrupted the country and rewarded the parasites and their ilk who created this mess in the first place. Turn out the lights when you leave.

Posted by bystander @ 11:40 AM 0 Comments

Shoeless

The Independent: Shoeless

As The Independent rep-orted last week, Dolcis, which normally processes its payroll at the end of each month, paid its employees up to 19 January, before yesterday's announcement, suggesting administration was imminent. The com-pany ran into trouble after the departure of its backer EPIC, the private equity company, which sold its stake to management around the new year.

Posted by brian2 @ 10:42 AM 0 Comments

HP inflation??

MSN Money: House prices continue to drop

'Annual house price inflation has fallen to its lowest rate for two years after the cost of property fell for the third month in a row.' When oh when will they start saying house price DEFLATION!!?? Thereby fully admitting the truth.

Posted by renting2 @ 10:01 AM 4 Comments

Dem Damn Bonds

Elliott Wave Intrn (Sorry!): Should You Invest in Bonds?

Chart AMBAC might be of interest.

Posted by techieman @ 08:57 AM 0 Comments

Ed Balls: UK economy is "robust" ;-)

Telegraph: Asian shares tumble as market rout deepens

Watching breakfast news this morning and seeing various markets and then behold Ed Balls: "The UK economy is robust, inflation low, economy is in good shape". Looks like BBC couldn't get a current treasury spokesperson on so they got a former treasury man in there. Since he is now in education, perhaps he ought to drop propoaganda from the syllabus. We've spent out money earnt in the last 10 years, credit and bankruptcies are soaring, banks are at bursting point, there are more walking dead than Michael Jacksons Thriller vid, the RICS see a tough year, mortgage lending is drastically down in the last months of 2007. Clearly Gordon and the Brown Noses are recruiting all the ministers they can to comfort us into thinking the UK is immune from all this and recent gloom is just a dream.

Posted by growler @ 07:37 AM 12 Comments

23 second clip - End of Days

BBC: A metaphor for the disaster unfolding

Watch this video carefully and imagine the commentaries from the so-called experts from the last 18 - 24 months.
The small meteorites landing from 16 seconds - 21 seconds make everything look as if it is going to be ok.
You can imagine PM Brown, Captain Darling, Bernanke, Paulson and the rest saying "You see it's ok, most of the city is still there......"
Watch it. It sends shivers down one's spine............

Posted by lvmreader @ 03:04 AM 15 Comments

1 lakh crore is 10^12 (1 trillion)

Times of India: Investors lose Rs 6.6 lakh crore

MUMBAI: On Monday, headline writers were left desperately searching for a word that would capture the mind-moggling fall of the sensex...Plunge, plummet, free fall...Everything that had worked earlier now seemed so tame. Even bloodbath, carnage or mayhem wasnt bloody enough. Till Monday, the steepest fall in the history of the sensex had been 826 points. A fall of over 2,000 points in the space of five hours was like the forces of gravity going into devilish overdrive. There was some rearguard action in the closing minutes of trading, but the full days loss was still a record-battering 1,408 points.

Posted by lvmreader @ 02:59 AM 1 Comments

Strewth!

Sydney Morning Herald: Another wipe-out: traders erase $43b from stocks

ALMOST $43 billion was wiped from the Australian sharemarket yesterday after panic selling caused the 11th consecutive day of losses, leaving the bourse teetering on the brink of a bear market. The longest sell-off in 26 years - and the strong prospect of more days of red ink to come - takes the market's losses since the start of this year to almost $200 billion, as fears of a recession in the US continue to cause havoc on global sharemarkets.

Posted by lvmreader @ 02:58 AM 0 Comments

Just a storm in a teacup was it?

Arab News: World Stock Markets Crash

DUBAI/LONDON, 22 January 2008 Global stock markets plunged yesterday, with Tokyo tumbling to its lowest level in more than two years as US President George W. Bushs tax plan to revive the worlds largest economy disappointed investors. After heavy losses in Asian trade, it was the turn of the European markets to suffer, with the main bourses posting losses of between three and five percent by midday as investors headed for the exits, dealers said. They said that after high hopes that Bush would announce strong measures to prevent the US economy going into recession, the markets did not find enough to offset all the bad news coming through on the banks and the collapse of the US housing market.

Posted by lvmreader @ 02:56 AM 0 Comments

Isn't Homer Simpson from Springfield?

Wall Street Journal: Springfield, Mass., Takes Aim at Merrill Over Subprime Losses

In November, officials in Springfield, Mass., got a rude surprise. One of their main investments had plunged in value by more than 90%.

The even bigger shock: This fund was stuffed with risky securities backed by subprime mortgages.

Doh!

Posted by lvmreader @ 02:16 AM 1 Comments

More bad news from Germany's embattled banking sector

Bloomberg: WestLB to Post EU1 Billion Loss, Will Raise Capital

A few billion Euro here, a few billion Euro there, pretty soon your currency is in the toilet. I will repeat: The Euro is a sham
When ClubMed comes clean, we'll be getting over 2 Euro to the Sterling.


Jan. 21 (Bloomberg) -- WestLB AG, the German state-owned bank reeling from subprime investments and bad trades, said it had a full-year loss of about 1 billion euros ($1.45 billion) and may set aside the same amount for further writedowns. The state of North Rhine-Westphalia and the Westphalia-Lippe and Rhineland savings banks associations, which own a majority of the Dusseldorf-based lender, will cover the loss and possible further writedowns of up to 1 billion euros, WestLB said today.

Posted by lvmreader @ 02:03 AM 13 Comments

Trouble Brewing - Brown's Special Brew

Guardian: 1m pay rent or mortgage with credit card

Rising housing costs forced more than a million householders to use a credit card to pay their mortgage or rent over the past 12 months, a poll for the housing charity Shelter reveals today.

Posted by quiet guy @ 01:09 AM 3 Comments

Monday, January 21, 2008

Then came the builders... then the construction equipment leasing firms

Financial News: Default lines rumbling through construction business

It didnt take long for the credit crunch to send tremors through the construction industry. Perini, the general contractor on the $3 billion Cosmopolitan Resort and Casino project now under construction in Las Vegas, said it received notice that the projects developer had received a loan default notice from its lead lender on the project, Deutsche Bank. Ian Bruce Eichner, CEO of the development firm on the project, 3700 Associates, confirmed to the Associated Press that his company defaulted on a $760 million loan from Deutsche Bank after it failed to get refinancing on a construction loan by a Tuesday deadline.

Posted by lvmreader @ 09:51 PM 1 Comments

.....the bigger they are the harder they fall....

CNBC: Why Stock Market's Selloff Is Likely to Continue

but....but.......but......a feel good article for us !! It is not likely to stop here :)

Posted by ihaterenting @ 09:09 PM 0 Comments

USA, China, EU, UK where next?

CNN: China's banks feel subprime heat

not sure if this has been posted bfore, but it is interesting the china appears to be about to take some heavy losses But the country's industry regulator warned in a report released Monday that they might face higher risks from fluctuating real estate prices and financial conditions.

Posted by mark @ 08:37 PM 0 Comments

It Can Only Get Better

Hiday.net: The German Property Market

Despite the downturn in the UK and USA economies there is still a long way to go before house prices start to reach affordable levels - especially for the growing army of wannabe first time buyers! However all is not lost there are still opportunities in countries within the European union that offer good work opportunities; a similiar standard of living and which also offer housing that is at at least one third of the price of property in the UK. One such place is Germany which is going through an economic revival at the moment.

Posted by john84 @ 08:29 PM 0 Comments

This is shaping up as a housing armageddon -- Will Gordon bail out homeowners the way he did with NR?

Times: Half a million homeowners miss mortgage payments

"Cash-strapped borrowers are struggling to pay off their home loans" Ooooops! "Half a million cash-strapped homeowners have missed a monthly repayment on their mortgage in the past six months. Despite the Bank of Englands quarter point cut in interest rates in December, many homeowners are still struggling. Some mortgage rates have in fact increased since Decembers cut. The average fixed-rate deal has risen from 7.30 to 7.31%". Folks, do you remember? just 18 months ago davidsmut and other pundits said we entered a 'new era' of never-rising interest rates, between 3 and 5% forever and ever and ever. MWAU HAHA HHAH HAAHA HAHA HAHAHHAH

Posted by confused76 @ 08:18 PM 11 Comments

Beware banks' bragging on earnings

CNN Money: Oct 19th 2007: Even 'safe' funds play with fire

Consumers view money market funds as conservative, but Fortune's Peter Eavis reports that some have dipped their toes in risky financial waters. A large Bank of America money market fund has over $600 million of exposure to Cheyne Finance, the structured investment vehicle (SIV) that recently defaulted on its obligations. As of Oct. 12, Bank of America's $67-billion Columbia Cash Reserves fund had approximately $640 million - or just under 1% of its assets - invested in Cheyne, according to Jon Goldstein, a Bank of America spokesman. "Up until now, Cheyne has been paying its maturities as they come due," Goldstein said. He added that Deloitte, the firm acting as receiver for Cheyne, said this week that it was pleased with the progress of efforts to refinance and shore up the troubled SIV

Posted by lvmreader @ 08:13 PM 0 Comments

Whoopsie

FT.com: Municipal borrowers bypass troubled insurers

Municipal borrowers in the US are increasingly issuing bonds without seeking guarantees from beleaguered insurers MBIA and Ambac, highlighting the risks of a collapse of their bond insurance business model unless confidence is restored. So far in January, US municipalities borrowed $8.6bn through new bonds guaranteed by insurers, according to Thomson Financial. This compares to over $31bn of new guaranteed bonds issued in January of 2007. About 30 per cent of the new bonds this month were guaranteed by FSA, a bond insurer with little exposure to subprime assets which have created losses for MBIA and Ambac and eaten into their capital base.

Posted by lvmreader @ 07:41 PM 3 Comments

Muhuhahahahaha - Are these people still employed?

RMA Journal: A Practical Review and Test of Default Prediction Models

Did you predict the 37.3bn in defaults chaps? $5.3million per HOUR every HOUR for the last 300 days

The authors, members of Citigroup's Risk Architecture group, examine the benefits and limitations of two alternative classes of models for default risk assessment. The contingent claims analysis is a structural approach based on an option-theoretic view of a firm's equity and liabilities. But even CCA models often show poor power in predicting default events in precisely those cases where these models should hold strongest. By introducing additional credit information, hybrid models are able to overcome some of these limitations and increase model performance in the critical near-default region.

Posted by lvmreader @ 06:54 PM 1 Comments

Bog crash (including housing) looking !!

thisismoney.co.uk: FTSE 100 'to fall by more than 40%'

but.....immigrants.....but.....divorced couples...... but limited space.... but long term...... but but but...... Interesting article, my sort of doom and gloom !!

Posted by ihaterenting @ 06:46 PM 0 Comments

Whoopsies

BBC: Global shares tumble on US fears

Many of the world's main stock indexes, including the UK FTSE 100, have posted their biggest falls since the terrorist attacks of 11 September, 2001.

Posted by enuii @ 05:56 PM 0 Comments

Could this be the next blowup?

Wikipedia: Hybrid Securities

It seems like these were a great idea during runups in the equity and debt markets. Whoopsie. "The new guidelines establish a "debt-equity continuum" and allow institutions to classify part of the hybrid security as equity and part as debt (in a shift from the previous policy, that counted the entire amount as debt). This change allowed companies to issue hybrid securities at a time of record low interest rates (and thus gain access to cheap capital) and then use the proceeds to repurchase equity shares (which have a very high cost of capital). Since only a fraction of the recapitalization would be listed as debt on the balance sheet, hybrids allowed companies to repurchase more shares than previously without negatively affecting their credit rating."

Posted by lvmreader @ 05:42 PM 5 Comments

Interesting reading the comments on here - the Journo seems

Wall Street Journal: The $3bn dollar PayDay

In todays Journal Gregory Zuckerman brings us news of the biggest one-year salary ever paid on Wall Street that of hedge-funder John Paulson, who made somewhere between $3 billion and $4 billion last year. Thats right, between $3 billion and $4 billion. In one year. John PaulsonTo put that in perspective, Mr. Paulsons salary equals the incomes of 62,500 Americans earning the national median income of $48,000 a year. It also puts him instantly among the top 150 richest Americans, as measured by Forbes. Mr. Paulson made more in one year than The Donald has made in a lifetime. Hows that for Kicking Ass? Even better, Mr. Paulson probably doesnt have to pay the typical income taxes on his loot - because his income is based in part on carried interest, or a cut of the trading gains

Posted by lvmreader @ 05:39 PM 1 Comments

It's a good day to bury bad news!!

Office National Statistics: Slowdown in retail sales growth

What with Northern Crock and the stock market we might have missed this confirmation that the high street is in trouble. Sales by predominantly food stores rose by 2.4 per cent over the year, compared with no growth for predominantly non-food stores and 10.0 per cent growth for non-store retailing and repair. Sales by household goods stores fell by 2.1 per cent, the largest fall for this sector since March 2006 (-4.2 per cent). It will only get worse and the job losses will increase.

Posted by who stole my pension? @ 05:14 PM 4 Comments

More taxpayers money to Rock

BBC News: Rock plan 'best meets objective'

The gov. will guarantee NR bonds and sell them. This still leaves the UK taxpayer underwriting any defaults. Biggest financial assistance to any company in history.

Posted by stillthinking @ 04:45 PM 11 Comments

Brown was never competent....just lucky

BBC: UK borrowing is worst in 10 years

''For the year to December, net borrowing reached 43.6bn, 11.4bn more than the year before and higher than the Treasury's 2008 spending targets. Economists now expect the government to miss its targets this year as slower economic growth brings in lower taxes.''

Posted by hpwatcher @ 04:29 PM 4 Comments

Northern Rock's lawyers on the attack

Slashdot: Collapsed UK Banks Attempts to Censor WikiLeaks

"Wikileaks has released a couple of hilarious legal demands over a confidential briefing memo entitled Project Wing Northern Rock Executive Summary. Northern Rock Bank (UK) collapsed spectacularly late last year on the back of the sub-prime lending crisis and was re-floated by the Bank of England at a cost of over 24bn. The memo was used by the Financial Times, the Telegraph and others. It attracted a number of censorship injunctions, as reported by the Guardian, which only Wikileaks continues to withstand.

Posted by little professor @ 03:17 PM 4 Comments

UK economic outlook by Roger Bootle

Tgraph: Falling pound may keep recession at bay

"In my professional life there have been three phases of gross delusion about the performance of our economy. The first was the Barber boom of the early 1970s; the second was the Lawson boom of the late 1980s; and the third is the Brown boom that we have just lived through. The extent of the macroeconomic imbalances now is just as great as it was then. The balance of payments gap, as a share of GDP, is as large, and the boom in real house prices has been bigger. Government borrowing has not surged - yet - but the signs are ominous" (we saw the first 25bn in emergency bonds announced today) "The end of illusion means the end of what I called, in the book published under that very name, "money for nothing"

Posted by confused76 @ 02:50 PM 7 Comments

Call me cynical but this sounds like an insurance job.....

Associated Press: Fire burns 14 buildings in Mass.; 1 hurt

Assuming the insurance firms have the money to pay out....

LAWRENCE, Mass. - A massive blaze that started in an empty downtown nightclub early Monday quickly spread through 14 buildings, including apartments and a home for the mentally disabled. One person was injured in the fire in Lawrence, about 30 miles north of Boston, Fire Chief Peter Takvorian said. The extent of the person's injuries was unknown. The fire spread from the nightclub, which was being renovated, through a hair salon and the other buildings. Officials say they rescued several people from the buildings, many of them three-story, wood-framed structures.

Posted by lvmreader @ 01:43 PM 0 Comments

Warning: journalist talks sense on the housing market

The Herald: My 7-Point Plan to End the Housing Crisis

Great article by Iain McWhirter in the Glasgow Herald outlining a common-sense plan that would go a long way towards ending the crazy housing boom without making the whole country suffer along with the ruined speculators: better credit regulation, an end to BTL tax breaks, a reform of planning regulations and ending right-to-buy. The only shame is that his plan makes so much sense, it will be ignored by any politician with any influence... as all sensible plans are.

Posted by an bearin bui @ 12:36 PM 12 Comments

Gold falling falling

Reuters: Gold falls as U.S. measures fail to spark buying

Dollar is going up and gold speculators are getting out. About time IMHO. I read somewhere that selling gold now is like cancelling your insurance when the fire starts. Let the speculators get out and leave gold to people like me who want to buy some insurance to this global meltdown.

Posted by happyrenterz @ 11:54 AM 5 Comments

The speed at which the market unfolds beats all expectations

CambridgeNews: Property prices in city fall 4.9%

According to property website Rightmove, the average cost of a house in Cambridge has fallen by 4.9 per cent this month. "A slow in the buy-to-let market and the introduction of Home Information Packs have had an effect, as have the sub-prime crisis in the US and the problems with Northern Rock over here." "There is no question that prices have fallen, but this is because they were too high previously." Here we go!

Posted by confused76 @ 11:53 AM 15 Comments

European markets down by as much as 6%

FT.Com: Shares tumble as sell-off accelerates

At one point on my screens at work this morning the FTSE 300 Ex-UK was showing down 6.2% - in one morning! Here comes the recession...... "The FTSE 100 slumped more than 300 points on Monday morning amid heightened gloom about the prospects for the global economy. Sentiment was undermined by some sharp falls on Asian markets overnight as investors were left underwhelmed by President Bushs package of measures aimed at stimulating the US economy. Hong Kongs Hang Seng index slumped 5.5 per cent and the Nikkei 225 in Japan closed down 3.9 per cent."

Posted by nstan @ 11:51 AM 4 Comments

Comical Ali and the Bricks Chicks

Times: Bargain hunters reignite UK housing market

The Times has turned into the real epicentre of misinformation on the UK housing market. With davidsmith, the Bricks Chicks and the space given to the estate agents so-called "economists" (the Fionnaullalaulla's, the Savills, the Hamptons) now the Times is competing with comics. Some properties have had their prices dropped by 10 per cent or more and are now within reach, satisfying some of the pent-up demand from previous disenfranchised buyers. The amount of time a property remains on the market came down slightly this month to 95 days, down from a peak of 98 days in December" Sure, sure, but Miles forgot to say that there are sellers taking properties out of the sale market and renting them out, thus depressing rents. I post more links in the comments.

Posted by confused76 @ 11:44 AM 9 Comments

Dress mutton as lamb but it still tastes of dead meat...

Firstrung: Mortgage lending crashes by 25% (30bl) in one month - CML

2007 as a whole proved to be the strongest ever year for gross mortgage lending, according to the Council of Mortgage Lenders. It reached an estimated 362 billion, up 5% from 345 billion in 2006, and above the CML's forecast in October 2007 of 360 billion. However, December gross lending declined to an estimated 22.6 billion, its lowest monthly figure since May 2005, but this was not a surprise in current market conditions. It was down 25% from 29.9 billion in November and 21% from 28.6 billion in December 2006. A 6% seasonal fall might typically be expected between November and December.

Posted by converted lurker @ 11:30 AM 1 Comments

Why Bernake Should NOT Cut Rates...

Fortune 500: Business Article

But oh shucks, why listen to amy authority that actually speaks some sense? Best off listening to David Smith instead?

Posted by orwell @ 10:45 AM 2 Comments

That's close on 4% of mortgage customers

Firstrung: Mortgage payments missed by half a million customers in past six months - MoneyExpert.com

Close to half a million cash-strapped homeowners have missed a monthly repayment on their mortgage in the past six months, according to MoneyExpert.com research. One in 25 can't pay, but the recent base rate drop will ease the pain, says MoneyExpert.com. The independent financial comparison service says some 463,000 people have failed to meet a mortgage payment deadline since July 2007, representing around four per cent of the 11.8 million outstanding mortgages.

Posted by converted lurker @ 10:38 AM 4 Comments

New lending statistics - hot off the press @ 21/01/2008

Building Societies Association: 2007 - BUILDING SOCIETIES SMASH SAVINGS RECORD

Gross lending by building societies was almost flat year on year, at 52.1 billion in 007, compared to 52.8 billion in 2006. However, net lending by building societies was down by 20.7% to 12.6 billion in 2007, largely because of higher interest rtes in the mortgage market as a whole"

Posted by jack c @ 10:17 AM 0 Comments

Real prices down year on year .. except in London.

RightMove: January 2008 House Prices Report

Look at page 5.
There have been real (i.e. accounting for inflation of 4%) price drops year on year for everywhere but London.
Year on year price changes are:
North 0.8%, North West -0.2%, East Midlands 0.4%, East Anglia -0.5%, South East 3.9%, South West 2.4%, Wales -3.9%, West Midland 0.2%
London 11.9%.
And they try to blame the monthly 0.8% fall on HIPS (p.2) . But they didn't blame the rise on HIPS last month!

Posted by voiceofreason @ 09:25 AM 10 Comments

Government seeks share in any Rock upside

FT: Northern Rock in Crisis

Upside? Will be interesting to see what the yields will be on this.

Posted by techieman @ 08:57 AM 11 Comments

Positive spin on bad news...

Independent: House prices fall for third consecutive month but agents see signs of recovery

''House prices are continuing to fall, although the new year has seen a moderation in the rate of decline, according to the latest data from the online estate agency Rightmove. Having recorded a sharp decline of 3.2 per cent in values in December, partly caused by a glut of properties rushed on to the market to beat the Home Improvement Pack (HIP) dead-line, UK real estate values declined by an average of only 0.8 per cent in January, the group said. The annual rate of increase now stands at 3.4 per cent, its lowest since December 2005.''

Posted by hpwatcher @ 08:46 AM 28 Comments

A bloody awful start for FTSE - 138 points down

BBC: Market Data

FTSE in free fall this morning....now 5762.8

Posted by hpwatcher @ 08:02 AM 5 Comments

Bad debts are "unknown unknowns"

Economist: Finding default: What isn't known about bad debts

What happened in the subprime market was an unknown unknown. There were several layers of middlemen between investors and house-buyers, most of whom had an incentive to overstate either house prices or a borrower's ability to repay. Worries about other parts of the debt market remain. In recent years struggling consumers have been able to consolidate their credit-card debts into their mortgage loans; that option is no longer open. Will that affect default rates? And car companies have relied on cheap financing rates to maintain sales. Has that led to a decline in lending standards?

Posted by drewster @ 01:32 AM 1 Comments

Bit to early to go bargain hunting...

Firstrung: Guess who's back? Not first time buyers that's for sure...

It's been quite a while since any economic market commentators mentioned the 'boiled frog syndrome'. With EDF announcing a spectacular hike in energy prices today, approx 14.5% on gas prices alone, the average mortgage costing over 1500 more than this time last year, car insurance and petrol prices up, mortgages coming off their teaser rates, council tax bill announcements for 2008 on the way... it may be worth reckoning up and noting that the great British consumer has to find close on 2K extra net this year (vis a vis 2007) to effectively stand still. This is not withstanding the fact that the average food basket is now costing 6.5% more than this time last year...

Posted by converted lurker @ 12:46 AM 4 Comments

Rightmove data: freefall prices

BBC: Average house prices fall further

The BBC losers always find a silver lining for the market "Asking prices were down 0.8% in the five weeks to 12 January but the fall was less than the 3.2% slide seen between November and December" MWA U UAHAHH HAHAHAHAHHA

Posted by confused76 @ 12:23 AM 7 Comments

Rightmove -0.8% in Dec

Daily Mail: House values plummeting by 120 every day

The asking price of a typical home has plunged more than 11,000 since October, research reveals today. Prices are dropping around 120 a day with experts warning that the year ahead looks bleak. The report by Rightmove reveals that prices have fallen for the third consecutive month. They have dropped by a total of nearly 5 per cent since October, including a 0.8 per cent decrease this month. It is a cruel blow for anybody who recently stretched themselves to the limit to buy a home.

Posted by little professor @ 12:13 AM 9 Comments

Sunday, January 20, 2008

London only 18th most expensive city!

News.com.au: Australian Homes, the World's Least Affordable

AUSTRALIAN homes are the least affordable in the world, with regional cities including Mandurah outside Perth and Queensland's Sunshine Coast emerging as among the most expensive. A survey of 227 cities published in the 2008 Demographia study of international housing affordability suggests the Rudd Government should not focus exclusively on Sydney, Melbourne and Brisbane. Perth, ranked 19th, is almost on a par with London, which is the 18th least affordable city.

Posted by expensive london @ 11:44 PM 0 Comments

Found a link to this story in the blog archives, WOW! how times are changing!

BBC News Friday, 20 August, 2004: Oil stays below $50 a barrel mark

Fresh violence in Iraq triggered yet another oil price surge on Friday, before dealers starting taking profits. New York light crude rose as high as $49.40 after reports of a new attack on an Iraqi oil pipeline, but then slipped back to close at $47.86. However, with the situation in Iraq still uncertain, oil prices could still surge through past $50, dealers said. Despite slipping back, oil is still trading near its highest level in the 21-year history of crude oil futures on the New York Mercantile Exchange(Nymex).

Posted by novice pete @ 11:07 PM 1 Comments

Wondered Why - I did

Wikipedia: United States Housing Bubble

I wondered what really is going on and after looking for ages came across this from Wikipedia of all things, it mainly talks US as per the title but explains why the UK is affected, a worthwhile look through i hope you agree, it is up to date and current.

Posted by rimmer @ 10:29 PM 0 Comments

Guts to bet against housing market

Wall Street Journal: Trader Made Billions on Subprime

John Paulson realised the housing market was going to go wrong so he bet against it. This article expalins how he did it. "Most people told us house prices never go down," He was lucky too "Mr. Paulson didn't turn bearish too early. Some close students of the housing market did just that, investing for a downturn years ago -- only to suffer such painful losses waiting for a collapse that they finally unwound their bearish bets." The key thing was he remained patient and determined. Housing remained strong, and the fund lost money. A concerned friend called, asking Mr. Paulson if he was going to cut his losses. No, "I'm adding" to the bet, he responded, according to the investor. "Someone from more of a trading background would have blown the trade out and cut his losses,

Posted by happyrenterz @ 09:25 PM 19 Comments

Gordon, the mess and the Sterling duck

DavidSmith: Gordon Brown gets blame for budget mess

public finances are in a mess and will deteriorate further as the economy weakens. Treasury failed to take advantage of years of good growth to put our public finances on a sounder basis, so our ability to respond [to the slowdown] has been compromised. Sterling is a sitting duck at the moment, fundamentally overvalued and subject to speculative attack. Another risk is that policy-makers make more mistakes in responding to this situation. Our forecast assumes that we get the appropriate policy response. The worry is the MPC will fret about the inflationary impact of sterling and delay the necessary deep deep cuuuuuuut. davidsmith, give us a break!

Posted by confused76 @ 08:55 PM 0 Comments

Is this the quarter when banks finally admit all of their problems?

MSN MoneyCentral: The next banking crisis on the way

Nah. The banks and other financials have more losses from the subprime-mortgage mess on their books that they haven't yet confessed. Worse, the mortgage debacle has spread to other types of debt, with banks and other financial companies reporting mounting losses in their credit card and auto loan portfolios. And worst of all, the next big leg of the crisis -- the one I think will mark the true bottom -- has just started. As the economy slows, the default rate is rising for corporate debt, especially for the high-risk, high-yield corporate debt called "junk" by many of us. That's opening a Pandora's box of potential write-downs that could dwarf the losses in the mortgage market.

Posted by lvmreader @ 08:28 PM 4 Comments

London's Burning

Hiday.net: London's Burning

Sentiment seems to be the only thing left when one thinks of the property market in London. The days of frustrated first time buyers itching to get on the foot of the property ladder in London are finally over. Up to the beginning of last year buyers were prepared to pay over the odds to live close by to busy roads; ugly public buildings and the flight path of noisy airports. However there are still suprises! Just last week Toprak Mansion, in one of the least exclusive districts, went for a record breaking 50 million pounds.

Posted by john84 @ 06:34 PM 0 Comments

Branson & Brown to create Northern Wok

Reuters: Virgin to sweeten Northern Rock deal

Virgin Group will try to win over shareholders with a sweetened bid for Northern Rock on the eve of a speech by the British Chancellor to Parliament about the struggling UK bank, an unsourced Sunday Times report said. A statement from the Treasury about Northern Rock is expected at 0700 GMT on Monday, a Treasury spokesman said.

Posted by jack c @ 05:17 PM 5 Comments

UK growth will halve (at best) next year, plus Sterling is doomed

BBC: Risk of a recession 'remains low'

"We have been living well beyond our means, lured by the offers of cheap no-questions-asked credit. The reversal in the credit markets in 2007 lead to a sharp fall in economic growth, but there is room for interest rates to be cut to cushion this" Each week brings more multi-billion dollar investments that are helping many of the financial institutions that have been seriously hit by debt write-offs" These investors are Chinese, not prize i@iots, sure enough wont invest at 1.95 dollars to the pound. "Peter Spencer, chief economic adviser to the ITEM club, said the government had left it too late to sort out deteriorating public finances which could make tax cuts to spur the economy tricky to implement" Public debt will go up. All risks on the downside: GBP is doomed.

Posted by confused76 @ 04:23 PM 10 Comments

Onteresting lending stats - Next release tomorrow 21st Jan 2008

Building Societies Association: RECORD SAVINGS INFLOWS CONTINUE BUT BORROWERS NEED TO PLAN CAREFULLY

Gross lending was 4.1 billion, compared to 4.6 billion in November last year. This cooling of activity since 2006 is likely to be a consequence of higher Bank Rates and a tightening of credit conditions more generally. Mr. Coles also urged holders of fixed rate mortgages that will be ending in the new year to use the Christmas period to start thinking about their new mortgage. He said: People coming off a fixed rate in the new year are potentially looking at a big increase in their mortgage repayments. As a consequence, it is important they begin to consider their options to help make their repayments as low as possible when their fixed rate period finishes.

Posted by jack c @ 12:22 PM 0 Comments

As we go into a downturn others build

New York Times: The Construction Site Called Saudi Arabia

The Saudi economy was in idle mode for 20 years, said John Sfakianakis, the chief economist at SABB, formerly known as the Saudi British Bank, who is based in Riyadh, the Saudi capital. Today, the feeling here is, Weve won the lottery; lets not waste it. The kingdoms lofty economic goals would have been unthinkable without the surge in energy prices that has filled the coffers of oil producers. Oil prices have quadrupled since 2002 and reached $100 a barrel in New York this month.

Posted by happyrenterz @ 12:11 PM 1 Comments

House prices are falling at their fastest rate since the recession of the early 1990s

Independent: Price declines recall the recession of the Nineties

House prices are falling at their fastest rate since the recession of the early 1990s, the Royal Institution of Chartered Surveyors (Rics) has warned. Confidence is ebbing, with the "house price balance" the proportion of surveyors reporting increased house prices falling to minus 49.1 in December from minus 40.6 in November and marking the biggest negative balance since November 1992.Meanwhile, fewer people are looking to buy a property, with 25 per cent more surveyors reporting a fall rather than a rise in enquiries.

Posted by jack c @ 12:05 PM 3 Comments

Week in focus

Firstrung: Firstrung, first time buyers, the weeks' news in focus

Is there ever a 'good' news week for the mortgage and property 'industry'? Take that a stage further is there ever a 'good news week' for the first time buyer? The NAEA reported this past week that FTBs are making some kind of comeback; apparently FTB numbers recorded at estate agents are up from lows of 10% to mid 13%... However, is this enquiries only, or are FTBs piling into the housing market at the first signs of weakness, busily hoovering up bargains? We'll answer that for them, it's enquiries not purchases and their FTB records only relate to the new enquiries from potential clients with nothing to sell, who are not necessarily first time buyers.

Posted by converted lurker @ 11:58 AM 1 Comments

Norwich Union tipped as next to impose freeze

Guardian Unlimited: Savers hit by new property fund plunge

The panic in commercial property funds is likely to intensify this week, as financial advisers are tipping Norwich Union to be the next asset manager to put a freeze on withdrawals by small savers. Founder John Duffield, who owns 12.5 per cent of the company, said he had personally lost 100m in the past six months. He added that he is gloomy about prospects for the stock market and thinks London and Wall Street could drop 10 per cent between now and June. 'We are not even all the way into the woods, let alone out of them,' he said.

Posted by damian @ 11:29 AM 1 Comments

The currency theme will dominate UK economic trends in 2008

davidsmith: Dont bank on euro as the pound slides

Sure enough the Pound bubble will be a major driver in influencing political and monetary decision in 2008. Of course davidsmith got it totally wrong, but -as usual - reading this clown helps understand what will NOT happen. However, in a rare moment of lucidity he said something remotely sensible: "A change in interest-rate expectations and tough talk from the ECB does not add up to a 14% fall for sterling against the euro over the past year, equivalent to Harold Wilsons pound in your pocket devaluation of 1967. So something else has been happening, and appears to be directly linked to the credit crisis" My, my, look at the brain on davidsmith!

Posted by confused76 @ 11:15 AM 8 Comments

This is so wrong

Telegraph: Northern Rock buys up its own repossesions

Bank claims customers house, which is then put on auction. Bank bids at auction, thus inflates sale price. This sounds like "shill bidding", and is fraudulent. (e.g. e-bay fraud) "shill" - a person who poses as a customer in order to decoy others into participating, as at an auction, confidence game, etc.

Posted by a womble @ 11:00 AM 1 Comments

Great expectations!

Scotsman: Property addicts are facing a painful spell of cold turkey

George Bernard Shaw said property is to the middle classes what gambling is to the poor. Either can lead to addiction. One sign that any house price downturn will get uglier than we hoped is when property funds start to get into trouble. When the market turns, it is impossible to get your money out. The huge unknown is how buy-to-let landlords will behave as prices tumble. During previous recessions, second-property owners dumped at the first sign of trouble.

Posted by confused76 @ 10:28 AM 3 Comments

Property lawyers sued for fraud

Sunday Times: Business Article

How things can come out of the woodwork....

Posted by orwell @ 09:28 AM 0 Comments

Ernst & Young get all Keynsian

Observer: Don't squeeze spending now, Treasury is urged

The Government wants to get their spending back on track, but the Item Club says they should be using fiscal measures to forestall the coming recession. Our neo-con liberal government is being urged by a bunch of capitalists to return to Keynesian economic management. The world turned up-side down.

Posted by redwing @ 12:18 AM 4 Comments

Saturday, January 19, 2008

Another Black Hole for Pension Schemes

Times: Pension plans derailed by the property slump

Plunging commercial property values have hit Scottish Equitable Pensions with some funds seeing 17% falls in commercial property values over the last 6 months. Scottish Equitable has now introduced a 12 month lock-in period for investors trying to move their money out.

While many people want lower property prices they must also recognise the potential impact on PensionSchemes.

Posted by enuii @ 11:56 PM 9 Comments

Crash or Stagnation

Hiday.net: UK House Price Crash

Will house prices crash in 2008? This is the question that seems to be on every one's lips at the dinner table in almost every home in the UK. Despite certain mortgage lenders telling the public that there has been, on average, a steady 5% increase in house prices during the last year, most people have already started to realise that the uk property market is definitely in serious trouble - the demise of Northern Rock; interest rate rises; reductions in mortgage approvals and the rippling effect of the downturns in the US economy have all begun to take their toll.

Posted by john84 @ 11:12 PM 1 Comments

See preceding article on Debt Kings

FT.com: Tchenguizs magic touch begins to desert him

This happened to Donald Trump in the last real estate crash. At one stage he had to go see his bankers to discuss repayment. He passed a tramp on the way to the negotiation and realised that the tramp was $8bn better off than he. We are about to see a repeat of this, except Supersized

Posted by lvmreader @ 10:54 PM 0 Comments

Nov 2006: Debt-backed buyers are riding high for now.

Timesonline: Property tycoons who owe billions

Property tycoons who owe billions Almost unnoticed, they have joined a select clutch of debt-backed private property entrepreneurs ranging from the flamboyant Nick Leslau and high-living Tchenguiz brothers to the intensely private Leo Noe and publicity-shy Livingstone brothers who have become super-wealthy over the past five years by taking advantage of low interest rates.

Posted by lvmreader @ 10:47 PM 3 Comments

Dec 2006: House prices in UK will never crash, say Mr and Mrs Wilson of Ashford, Kent

Guardian: 2 x maths teachers + 700 houses = 1 x 240m buy-to-let empire

If you think house prices are already outrageous, look away now. According to two former maths teachers from south London, who are Britain's buy-to-let king and queen, the property market will never crash. Husband and wife magnates Fergus and Judith Wilson have just signed a deal to buy their 700th house. If things go to plan, they will become the country's first buy-to-let billionaires. Every week they buy another house - and on one day alone spent 10m buying 40 properties off a distressed developer. In the early 1990s the Wilsons were marking maths homework and writing school reports at a Blackheath comprehensive. Today their property empire is worth 240m - almost all of it within commuting distance of the Eurostar terminal in Ashford, Kent. They put their personal wealth at 180m.

Posted by lvmreader @ 10:21 PM 22 Comments

More from the Bakersfield Flipper Saga

Bakersfield.com: Federal agents raid Crisp and Cole homes and businesses

FBI agents this morning searched Bakersfield entrepreneur David Crisps real estate office on Stockdale Highway and his Seven Oaks home, as well as the homes and offices of several of his business associates and family members, an agency spokesman confirmed. The searches of 13 businesses and residences were carried out in coordination with the IRS, the Bakersfield Police Department, the Kern County Sheriffs office and the state Department of Real Estate. They follow state regulators release Tuesday of a 25-page report accusing Crisp, 28, and his former business partner, Carl Cole, 60, of deceiving lenders, falsifying information and paying employees to take out loans.

Posted by lvmreader @ 10:01 PM 4 Comments

Only now? Have the market been on valium or something?

Wall Street Journal: Default Fears Unnerve Markets

The turmoil on Wall Street is beginning to rock a foundation of the financial system: the ability of institutions to make good on their many trades with one another. Today, a struggling bond insurer, ACA Financial Guaranty Corp., will ask its trading partners for more time as it scrambles to unwind more than $60 billion of insurance contracts it sold to financial firms but can't fully pay off, according to people familiar with the matter. The contracts were intended to protect Wall Street firms from losses on mortgage securities and other debt they own. The problem is that the insurer itself is teetering -- with repercussions across the financial world. Some of its trading partners, called counterparties, already are writing off billions of dollars because of its inability to pay.

Posted by lvmreader @ 09:54 PM 2 Comments

Have it!

Wall Street Journal: Las Vegas Default Highlights Commercial-Property Crunch

The credit crunch that roared through the residential real-estate market is starting to bite commercial projects, too. Yesterday, Ian Bruce Eichner, the developer of a twin-tower casino resort in the heart of Las Vegas, defaulted on a $760 million loan from Deutsche Bank AG after he failed to get refinancing. The default on the loan supporting the $3 billion Cosmopolitan Resort Casino is a signal of trouble for Mr. Eichner, who gained notice during an earlier real-estate downturn in the early 1990s when he lost several projects in New York City.

Posted by lvmreader @ 09:51 PM 0 Comments

Not like 1929 at all......

SF Chronicle: Mortgage Company Exec Jumps to Death

An executive of a collapsed subprime mortgage lender jumped to his death from a bridge Friday, shortly after his wife's body was found inside their New Jersey home, authorities said. The deaths of Walter Buczynski, 59, and his wife, Marci, 37 the parents of two boys were being investigated as a murder-suicide, according to the Burlington County Prosecutor's Office. Walter Buczynski was a vice president of Columbia, Md.-based Fieldstone Mortgage Co., a high-flying subprime mortgage lender that made $5.5 billion in mortgage loans and employed about 1,000 people as late as 2006. However, it has since filed for bankruptcy and now has fewer than 20 employees.

Posted by lvmreader @ 09:49 PM 0 Comments

Halifax shocking results reported in the Sunday Times

Times: House prices tumble

It will be interesting to read what davidsmith has to say on this. "HOUSE PRICES TUMBLE. House prices fell in the last three months of 2007 in what was the first quarterly fall in seven years. Average prices across the UK saw a 0.8% decrease, according to the latest Halifax house price index. The previous quarterly fall was in the second quarter of 2000, when prices fell by -0.1%. The largest falls were in Greater London where prices dropped 6.3%." WOOOOW, but no worries... "Sound economic fundamentals and lower interest rates will support house prices in 2008. Yeah, sure

Posted by confused76 @ 09:48 PM 6 Comments

How to calculate how much money one would make on CDS trades

Barbican Consulting: Guide: What is basis point value, (BPV)?

Download the Basis Point Value Quick Guide as a PDF
BPV is a method that is used to measure interest rate risk. It is sometimes referred to as a delta or DV01. It is often used to measure the interest rate risk associated with swap trading books, bond trading portfolios and money market books. It is not new. It has been used for years. In many financial institutions it has been replaced or is used in conjunction with value at risk. BPV tells you how much money your positions will gain or lose for a 0.01% parallel movement in the yield curve. It therefore quantifies your interest rate risk for small changes in rates

Posted by lvmreader @ 09:28 PM 3 Comments

east anglia

eastern daily press: dipping house prices

so how much is sandringham worth now then?

Posted by camping @ 09:22 PM 0 Comments

June 2007: Over leveraged Real Estate Fund

Bakersfield: Crisp & Cole Real Estate, close family members and staffers have received default notices on more than $11 million in loans

A year ago, it was all about image: a Gulf Stream jet, bodyguards, a half million-dollar car, Armani suits. Now, 27-year-old David Crisp is floating in default notices. So are family members and employees, current and former. No other local real estate agency has been hit by such a rash of defaults on large loans in recent months, a Californian survey has found. "I will not put my head down," Crisp said Thursday. "I will not roll in the sand. There's not one day where you won't see me in the office working." Even as Crisp celebrated his latest coup -- apparently securing tentative loan approval to build a pair of 24-story towers at CSUB -- he, his family, his business partner and his current and former employees appear to be in financial trouble.

Posted by lvmreader @ 08:34 PM 1 Comments

could this happen here?

patrick.net: How the U.S. Could End Up with High Interest Rates

Another thoughtful article by Charles Hugh Smith. This one explains how the US could end up with sky-high interest rates. Food for thought...

Posted by a saver @ 07:59 PM 0 Comments

Infrastructure Funding Freeze?

Guardian: Sub-prime cracks spread to infrastructure

"Ambac is one of a number of so-called monoline insurers that have become the focus of economists' attention in recent weeks. These companies, many of which were set up in the 1970s when US municipal authorities raised funds for projects by issuing bonds, insure those bonds against default. Such insurance makes it cheaper for local governments to raise cash as the risk of default is reduced for investors." ... "If the monolines run into trouble," said one British fund manager yesterday, "it will make what we have seen so far look like a walk in the park."

Posted by quiet guy @ 07:50 PM 3 Comments

A Little Bear Food from The Guardian

Guardian: London suffers most as house prices fall

"London was hardest-hit by falling house prices in the final quarter of 2007, a new survey from the Halifax shows today, adding to the gloom in the housing market."

Posted by quiet guy @ 07:44 PM 2 Comments

It's all ok in Bristol according to Estate Agents

ThisIsBristol: 14% RISE - HOUSE PRICES KEEP ON SOARING

This was a front page spread in the widest selling regional paper. It is akin to turkeys voting for Christmas but it was difficult to miss this headline whilst walking past any news vendor today. It's going to be difficult for a crash to take hold when this type of pro-property propaganda is shoved in peoples faces and base rates are likely to be cut.

Posted by denzil @ 05:33 PM 11 Comments

Reminiscences of the Whitewater Scandal in Mena, Arkansas?

Bloomberg: Appraiser Exposes Toxic Debt Tie to Inflated Values

The Georgia case in which Perez testified hinged on 300 inflated appraisals, according to Assistant U.S. Attorney Barbara Nelan. Hill and companies he controlled bought 50 houses and 250 condominiums and made money by recruiting straw buyers to repurchase the properties at inflated prices.

Even before Perez pleaded guilty, he paid for bucking the system, said his lawyer, Page Pate.

``He liked the steady stream of business,'' said Pate. ``My client refused to inflate a few appraisals and they cut him off for a long time.''

Posted by lvmreader @ 04:27 PM 1 Comments

Listen to the Bricks Chicks, the ultimate Property Cheerleaders

Times: The Bricks Chicks

I am not sure who at the Times may have had the bad taste to put together such a show, but I can t find the words to describe it... just watch it, it is unbelievably tacky and biased, in short a disgrace: "surveyors figures show that the market is cooling, with properties taking longer to sell. But some estate agents are going against the trend and feel that the market could still edge ahead this year". Is there a way to post it on YouTube? Or on the main page of HPC? This clip has the potential to kill whatever left credibility of the Times Property section. I even suspect it is kind of an office joke that got posted by mistake.

Posted by confused76 @ 02:53 PM 5 Comments

PDF finally available

RICS: 60% of EAs report house prices falling in Dec

After waiting for the media to lost interest, RICS have finally released the full December report on their website. 60% of those surveyed reported falling house prices - the worst result since Nov 1992. Be sure to read the quotes from the various EAs to see how panicked they are.

Posted by little professor @ 12:09 PM 13 Comments

This is no false dawn, the white flag is flying...

Firstrung: UK house prices start the inevitable retreat from unsustainable highs

A bit more meat on the bone now the full report is available, that fall in London is stellar IMHO and unprecedented. Also of interest is just how quickly N.Ireland found reverse gear proving just how speculative some of the 'demand' was and more importantly just how difficult and time consuming it is to extricate from a purchase when you are in fact the greater fool... UK house prices in 2007 Quarter 4 were 5.2% higher than in 2006 Quarter 4 with the average price of a home in the UK increasing by 9,821 over the year to 197,071. The annual increase of 5.2% made 2007 only the second year since 2001 when prices have risen by less than the long-term average of 8%... -

Posted by converted lurker @ 11:44 AM 2 Comments

Rock nationalisation more likely

BBC: Rock nationalisation less likely

I laughed out loud when I heard this on the radio. The substance of the release is this: "Prime Minister Gordon Brown has backed a plan from bankers Goldman Sachs to convert the Bank of England's loans to Northern Rock into bonds for sale." I realise many of you will be rolling on the floor laughing already, but for the rest of us, the punchline is that this is exactly how the sub-prime mess came about - by "selling dodgy debt". The second level of irony is that half the credit crunch is the fact no one can sell this sort of debt any more. Coup-de-grace comes with yesterday's story that the first bond insurer has been downgraded, making it nigh-on impossible to shift this stuff, even for prime companies - and Northern Rock is a zombie bank.

Posted by dohousescrashinthewoods @ 09:47 AM 5 Comments

End of the property-based economy II: It's panic while New Star counts losses

Times: New Star plunges 110m amid property investors panic

"New Stars value has fallen by more than 77 per cent in the past six months as fears increased over the climate in commercial property." Less than a year ago, do you remember the huge New Star adverts promising unbeateable returns from commercial property. You can trust brick and mortar!... yeah, sure, what can go wrong with brick and mortar?... you invest in solid, tangible assets... yeah, sure

Posted by confused76 @ 09:36 AM 1 Comments

End of the property-based economy: "Shard of glass" cancelled?

Observer: ondon towers in doubt as office market dive

The speed of the downturn in the commercial property market in the last few months has been breathtaking. Only a year ago mayor Ken Livingstone said the Shard would be to London what the Empire State Building is to New York. But now many property experts question whether the tower, and dozens of other skyscraper projects on the drawing board, will join the skyline of Britain's cities.

Posted by confused76 @ 09:21 AM 3 Comments

Darn - we've talked ourselves into recession

Reuters: Bush wants $150 billion plan to lift economy

Bush's plan failed to reassure investors on Friday as world stock prices fell again, with U.S. stocks tumbling to close out the worst week for the benchmark S&P 500 index in 5 years on fears the White House effort will not be enough to avoid recession.

Posted by pendulum @ 08:28 AM 1 Comments

Well, we won't have a HPC without it!

Independent: The week the economy turned nasty

It can only mean one thing......Recession! ''Retail sales plummet; gas and electricity prices soar, further eating into already squeezed disposable incomes; Citigroup and Merrill Lynch, two of the great symbols of American capitalism, forced to hand round the begging bowl among Asian and Middle Eastern sovereign wealth funds after massive write-downs on US sub-prime mortgage lending.''

Posted by hpwatcher @ 05:52 AM 20 Comments

Changing Sentiment Filtering Through

The Independent: Spectre of negative equity haunts Britain

Last paragraph: Estate agents believe falling interest rates and strong employment will shore up the market. Andrew Weir, of Foxtons, said: "I don't think we will see house price falls. I just see no reason for it."

Posted by quiet guy @ 03:10 AM 10 Comments

That is quite a significant fall...er...crash?

Firstrung: London house prices crash by 6.3% in final quarter of 2007 - Halifax

London has suffered a significant fall in house prices in the final quarter of 2007 a new survey from the Halifax shows today...Britain's largest mortgage lender states that Greater London led price falls in eight regions across the UK with a hefty drop of 6.3%. This was followed by the south east and east Midlands, which each saw a decrease of 2.3%.The news surely signals the end for, what appeared to be, an inexorable rise in house prices. London and the south-east have previously been the 'boom areas' at the forefront of Britain's previous year on year double digit house price growth. Inevitably higher interest rates and tighter lending have hit demand, however, this is especially evident from those working in the City.

Posted by converted lurker @ 01:01 AM 6 Comments

Hove estate agent does a runner

theargus.co.uk: Letting agent's vanishing act leaves tenants in lurch

Customers have been left baffled after their estate agent shut up shop with no notice. Farrells, a sales and letting agent in Goldstone Villas, Hove, closed its doors earlier this week without explanation. There is no notice in the shop window or on the firm's website telling customers what has happened. advertisement Those in the industry appear to have little clue about the sudden closure either. ...

Posted by ukuser1 @ 12:57 AM 0 Comments

Feb 22 2007 Article: Pre AMBAC / MBIA downgrades

Bloomberg: Subprime Mortgage Derivatives Extend Drop on Moody's Reviews

Whoopsie!

``Liquidity has taken a hit as market participants wait for the dust to settle,'' Christopher Flanagan, an analyst at New York-based JPMorgan, wrote in a Feb. 20 report. CDOs buy loans, bonds and derivatives, and resell the cash flows in new bonds, some of which have higher credit ratings. Yield premiums on high-rated subprime mortgage bonds are little changed. An ABX index linked to credit swaps on AAA bonds has fallen 0.3 percent since its started trading on Jan. 19.``There's so much credit protection in those securities it just takes a very, very stressed environment to impact their credit profile,'' said Scott Kirby, a portfolio manager at Minneapolis-based Riversource Investments LLC, which manages about $100 billion in fixed-income assets. ``We're not there yet''.

Posted by lvmreader @ 12:04 AM 0 Comments

Friday, January 18, 2008

Stay out of property for at least 6 months

Guardian: Real estate

A collapsing commercial property market is bad news for homeowners. Some buy-to-let housing investors had started buying small commercial premises in recent years, and may now be hit hard. Don't catch a falling knife says the old City adage. Tim Ames, of Cathedral Financial Management, began withdrawing clients from property 12-18 months ago. He said: "We wouldn't recommend an allocation to property for at least another six months."

Posted by confused76 @ 11:47 PM 1 Comments

Fall in retail sales sparks fear of long-term slump

Times: Fall in retail sales sparks fear of long-term slump

'This is the start rather of a sizeable retail slow-down, things are going to get worse, house prices are falling, equity is faltering and utility prices are rising, high street sales plunge 4.3%, the biggest fall in 13 years, consumer confidence is at a 12 year low'.

Posted by enuii @ 11:27 PM 1 Comments

So does one short the Scandies - they lent a TON to the Balties?

FT.com: East Europe warned on subprime fallout

The Swedes, Norwegians, Finns and Icelandics received a sound financial thrashing 17-20 years ago. Long enough for a new generation to forget everything. The rush to lend to the new economies, also will open up new opportunities to short their currencies. Perhaps a safer way is to trade on CDS widening, or better still a hedged position looking at the differentials between a large index and individual currencies, sectors. This is going to be BRUTAL

Posted by lvmreader @ 09:56 PM 0 Comments

Anybody got some deck chairs that I can re-arrange?

FT: Ambac left reeling as Fitch cuts triple-A rate

Fitch cuts Ambac AAA credit rating thereby reducing its ability to issue new buisness, this is the start of the next phase of the credit crunch.

Posted by who stole my pension? @ 09:30 PM 4 Comments

First monoline downgraded (Ambac) - another brick tumbles

CNN: Ambac fallout could hit municipal bonds

The importance of this cannot be overemphasised - see article from earlier about the importance of monolines.

Posted by andy hamilton @ 08:53 PM 2 Comments

Feb 21 2007 Reminder

HPC Blog: Flashback: The CDS that broke the Camel's Back

http://www.atimes.com/atimes/Global_Economy/JA15Dj01.html
The financial system fell under intense stress on Wednesday. The epicenter of the crisis was in the credit default swap, or CDS, market, and contagion fears were building quite a head of steam. The pricing for Countrywide Financial default protection (five-year CDS) surged a huge 469 basis points (bps)to a record 1,610 bps (it would cost US$16,100 annually for five years to insure $100,000 of Countrywide debt against default).

Countrywide:Today 1610, (01/2007) 30
Rescap: Today 3,746, 01/2007 - 95
MBIA : Today 849, (01/2007) - 87
Ambac: Today 841, (01/2007) - 70
Washington 611, (01/2007) - 54

Posted by lvmreader @ 08:34 PM 7 Comments

Dorothy, Euro, Bye Bye

CNBC: WestLB needs 2 bln eur in fresh capital, up from 700 mln

The Euro is a sham. It will strengthen against Sterling for a little while (perhaps 2 more quarters) and then will precipitously plummet as the truth about Spain, France, Germany, Italy, Greece and Portugal come out. We are seeing the mighty Germans in trouble. You know just how bad things must be for the Spanish and the Italians. And also the Swedish - they lent to the Baltics and Eastern Europe.

Posted by lvmreader @ 06:39 PM 2 Comments

Para-Gone as we predicted (Confused76 this deserves a big weekend laugh)

Mortgagestrategy: Paragon to cease new lending at end of February

Paragon Group has revealed it will have to cease new lending from February due to funding problems.In a statement to the London Stock Exchange, Paragon revealed its warehouse facility, which provides it with long-term funding, is unlikely to be renewed at the end of February. This means there will be very limited funding for new business beyond this date, other than for further advances on existing loans, although the lender will continue to complete existing mortgage offers until then.

Posted by jack c @ 06:34 PM 7 Comments

No need to Panic Mr Mainwaring

BBC News: Bush calls for economy kick start

President George W Bush has called for a special package of measures worth billions of dollars to avoid a downturn in the world's biggest economy. Mr Bush said it had to include tax incentives for US business and direct tax relief for the American people. The package should total at least 1% of gross domestic product, or about $145bn (74bn), the White House said. Too Little Too Late?

Posted by afrobaggie @ 05:46 PM 0 Comments

Is this the quarter when banks finally admit all of their problems?

msn.com: The next banking crisis on the way

As the economy slows, the default rate is rising for corporate debt, especially for the high-risk, high-yield corporate debt called "junk" by many of us. That's opening a Pandora's box of potential write-downs that could dwarf the losses in the mortgage market..... ohhhh more bad news!!!!

Posted by axxo @ 03:49 PM 1 Comments

Moody's to cut ratings of UK BTL lenders

Reuters: Moody's puts Derbyshire Building Society on review

AL, BB and Derbyshire under review

Posted by confused76 @ 03:05 PM 6 Comments

Monolines explained

BBC: All aboard the monoline Titanic

"If the monolines lose their own triple A ratings, then the bonds they insure will automatically lose their premium ratings. Bloomberg estimates those losses would be $200bn." It's like having car insurance from an insurer that can't pay out. This is what Jim Cramer was ranting about on CNBC (see post here late last night).

Posted by happyrenterz @ 02:56 PM 1 Comments

the R word.....

CNN: Americans: Recession near - or already here

More than three out of four Americans believe that a recession has already started or will hit in '08. Half have cut their spending, which could make a slowdown worse. How will this hit the UK???

Posted by mark @ 02:30 PM 1 Comments

how prevalent?

daily mail: Thousands use equity release to beat debt

A rising number of older people are using equity release to raise cash to pay off their debts rather than to provide themselves with a retirement nest-egg. Working it out: Home owners released more than 1.4bn from their property in 2007

Posted by northamptonbear @ 01:37 PM 2 Comments

Making the amateur property cheerleaders look like idiots

Belfast Telegraph: Ulster house prices fall 5%

As predicted by anyone with an ounce of common sense, the quickest to rise is the quickest to fall - despite the fantasies of some here who clearly believed NI had transformed into Dubai or Monaco with added money trees, it looks like the chickens are coming home to roost. I can tell you that the greed, naiveity and smugness here as a result of the boom were a magnitude above anywhere else in the UK, including London. Perhaps we can get back to a normal life again.

Posted by shipbuilder @ 01:15 PM 8 Comments

Reason for potential FTB's to hold out

New York Times: Sorting Out the New Housing Market

"The shape of the new American housing market the post-bubble market is starting to emerge. It is one that favors the young who never owned a house and the banks that have access to cheap deposits. It may be harshest on the two coasts, where both distress and a newfound lack of mobility may be on the increase."

Posted by richc @ 12:12 PM 12 Comments

I can hear laughs from across the pond

Bloomberg: Sinking Sterling Is Catching Dollar's Disease

the air has begun to leak from one of the world's biggest financial bubbles: the pound sterling. Not only is the pound weakening, it's going the way of the dollar for many of the same reasons that have plagued the U.S. currency: a deflating housing bubble, a large trade deficit and the prospect of lower interest rates. Both the U.K. and U.S. also have financial industries reeling from the subprime-mortgage crisis and related credit crunch that augur the probability of large layoffs. All of these suggest sterling has further to fall.

Posted by confused76 @ 11:59 AM 4 Comments

Slashing interest rates by one percent may not be a done deal

Firstrung: Deputy Governor of the Bank of England appears to rule out major interest rate cuts

In a meeting with the London Chamber of Commerce and Industry, John Gieve - Deputy Governor of the Bank of England - discussed the recent financial market disruption, its impact on the UK economy, and the increase in immediate inflation pressures from energy and food...

Posted by converted lurker @ 11:30 AM 0 Comments

Time to panic - the Fed is asking politicians for help

MoneyWeek: Time to panic - the Fed is asking politicians for help

"...Bernanke has his hands on the reins of monetary policy. He can pump the economy full of credit, just like his predecessor Alan Greenspan always did, by cutting interest rates. Now under Mr Greenspan, this worked very nicely - but thats because there were still bubbles left to inflate. But now the biggest of them all, the credit bubble, has burst, and Mr Bernankes little money machine just doesnt seem to be doing the job anymore."

Posted by mary @ 11:19 AM 4 Comments

it's just a question of how far and how fast they'll fall

Firstrung: The housing market bubble had to burst at some point - Moneyextra

"It's now clear that the housing market has slammed on the brakes, the most optimistic outlook for house prices for 2008 would appear to be that they'll stand still but values are falling now and are likely to continue to do so - it's just a question of how far and how fast they'll fall." - Robin Amlt, Senior Editor of Moneyextra.com

Posted by converted lurker @ 11:18 AM 3 Comments

bog for sale

sky news: A Toilet Worth Spending A Penny On

Available: Vintage, cosy property in urban environment with good transport links. Excellent plumbing, despite a few leaks over the years. Snobs may dismiss it as bog standard, but if you are feeling flush, this Edinburgh real estate may be worth splashing out on. The former busman's toilet is up for sale and expected to fetch more than 30,000.

Posted by camping @ 11:12 AM 1 Comments

Credit squeeze will get worse in 2008

MoneyWeek: Credit squeeze will get worse in 2008

Financial institutions face plenty more write-offs on mortgage-related securities, and other parts of the credit market student, car and credit-card loans look vulnerable.

Posted by mary @ 11:03 AM 2 Comments

A risk averse attitude will swing things the other way!!!!

guardian: Merrill's Thain promises to scale back risk taking

The new boss of Merrill Lynch pledged to crack down on outlandish risks by traders today as the Wall Street brokerage plummeted to an $8.6bn (4.35bn) year-end loss following a disastrous series of bets on sub-prime mortgages.

Posted by inbreda @ 09:34 AM 6 Comments

Gold could correct to $700

Market Oracle: Indians Selling Gold To Buy Stocks

Maybe $830 isn't a big enough correction. The weaks joining the party are waiting for a small correction too. Maybe it will be down in the low 700s. Techieman?

Posted by sold 2 rent 1 @ 09:29 AM 24 Comments

Music to my ears

Guardian: Panic selling shuts 2bn fund

One of Britain's biggest property funds was forced to shut its doors to withdrawals yesterday after the slump in commercial prices triggered panic selling by small investors.

Posted by inbreda @ 09:18 AM 5 Comments

sell on short-term rallies

Market Oracle: US Stock Markets Dome Top Signals Tragic End of the Bull Market

The conclusion from all of this should be obvious - apart from some isolated pockets of strength you should be out of the broad stockmarket by now, and any remaining holdings should be sold, especially on any short-term rallies, which can also be shorted. A high weighting of funds should be deployed in commodities generally and especially in the Precious Metals sector. Things are likely to get really rough for the US economy in 2008, which promises to be the worst year for the US since The Great Depression.

Posted by sold 2 rent 1 @ 08:58 AM 0 Comments

Steady as she goes .. downwards

BBC / Nationwide: Home prices fall for second month

0.5% (0.8% real) drop this month from the Nationwide.
This is the underlying trend. No more HIP effects.
Sellers can stomach this speed of fall. RPI at 4% adds a (real, i.e. inflation factored in) fall of 0.3% every month.

Posted by voiceofreason @ 08:40 AM 4 Comments

Repeating History

h-net: OVEREND & GURNEY, 1866; BARINGS, 1890

Contagion Effects of Three Late Nineteenth Century British Bank Failures Ashraf A. Mahate City UniversityB usinesSs chool,L ondon Britishb ankingd uringt he period1 860t o 1908 experiencead numbero f bankf ailures.F or exampleb, etween1 880a nd 1890t herew ere2 9 bankf ailures. The failureo f a bankn ot only affectst he depositorosf that bankb ut alsoo ther banks,t heir shareholdersth, e monetarys ystema nd generale conomics tability. The main reasonf or the latteri s the lossi n publicc onfidencien the banking systemw hichl eadst o a withdrawaol f fundsb y depositors.

Posted by seanb303 @ 08:03 AM 4 Comments

Panic

BBC: Exit delay for property investors

A rush to withdraw money from its commercial property funds has forced Scottish Equitable to introduce delays of up to 12 months for its customers.

Posted by seanb303 @ 07:51 AM 2 Comments

Forget rate cuts, says Sir John

Times: Sir John Gieve makes case for rate cut as MPC faces inflation test

The Bank of England's Deputy Governor dampened hopes of aggressive cuts in interest rates to bolster the economy yesterday as he highlighted its increasingly acute dilemma over a likely sharp rise in inflation, even as growth falters.

Posted by confused76 @ 07:46 AM 4 Comments

Quite a change of tune and stupid advice from Judith Heywood

Times: How to beat a property market slowdown

The market is cooling; mortgage lenders are getting meaner. But learn the rules and the slowdown could work to your advantage. Take out an interest-only mortgage for the first couple of years. Generational subsidy could be the answer: persuade your parents to lend you a deposit that can be returned to them when you sell. Selling prices are on average 6 per cent below asking prices. But don't upset the seller by offering too low. Remember that you are buying a home rather than trying to make a killing. Buyers looking at 1million-plus homes do not mess about; unless you are in a cash-rich position, you are not going anywhere. Buy quality: You don't want to be stuck with something that ends up being the next worst thing, rather than the next best thing. MWAU HAHHAH AHA HAHAH

Posted by confused76 @ 07:41 AM 10 Comments

Will Brown follow US and cut taxes?

Telegraph: US recession worries spark Wall Street plunge

As recession panic grips US, Bush announces hugh tax cuts to stimulate economy (as well as increased spending). Will Brown now do the sensible thing and cut taxes? I don't think I will hold my breath as fuel tax is still planned to go up in April!! I suspect though he will try to increase spending e.g. increasing MP pensions!! The U.K. is in one hell of a mess, high taxes, high debt and a falling pound! All good news for house price deflation!

Posted by who stole my pension? @ 06:21 AM 1 Comments

Half of Spain's real estate agencies folded due to building slowdown

cnbc: Half of Spain's real estate agencies folded due to building slowdown

Half of Spain's real estate agencies have folded in the past year due to a slowdown in the once-booming building sector, an industry association says. Of 80,000 that operated at the beginning of 2007, only around 40,000 have survived and some 100,000 employees lost their jobs, according to the Superior Council of Real Estate Agents, a nationwide grouping.

Posted by saving for a space ship @ 04:50 AM 2 Comments

Hoo boy! But only a surprise to the criminally insane.....

Executive Intelligence Review: A $3 Trillion Bankruptcy Will Now Start To Emerge

An experienced European banker told EIR this morning that "the problems of 2008 are of a completely different order of magnitude than those we saw in 2007." We have entered a period now, he explained, in which large banks and financial firms are opening their books to external auditors, after having announced losses for the fourth quarter of 2007 according to their own internal surveys. But these external audits are now finding different values than those previously announced. (Surprise, surprise!ed.) Thus, said the banker, we might expect a whole series of aggravated balance sheets, including legal bankruptcies of banks and financial companies.

Posted by lvmreader @ 04:05 AM 3 Comments

The bulls are still out there

Telegraph: UK house prices may defy the doomsayers

House prices across the nation will defy the doomsayers this year and settle to an average growth of 3pc, according to latest research from CB Richard Ellis. They say homeowners are in for a slowdown, not a crash. The group has even predicted that London will outperform the market at 6pc. Jennet Siebrits says: "This is not a repeat of the 1990s crash, as housing equity and employment rates are at an all-time high and interest rates remain low." ------ YAWN. She's saying there won't be a crash because housing equity is high. In other words prices won't fall because prices are high. That's great logic, she should be an estate agent. Oh wait she already is. Also unemployment is a lagging indicator. The banks are already shedding staff, the London housing market will suffer as a result.

Posted by drewster @ 02:12 AM 12 Comments

Thursday, January 17, 2008

Tears on Wall Street

Tears on Wall Street: Asia Times

From the 4th paragraph "Since British house prices have only just begun to decline, and in London at least must have much further to fall than in any comparable region of the US, mortgage losses in the UK market are still hidden well below the surface, with only the tiniest fraction of the iceberg being visible. After all, even a 50% decline in top-end London house prices would still leave them excessive in terms of income levels - it must be remembered that Tokyo housing lost 70% of its value after 1990"

Posted by becky @ 10:31 PM 6 Comments

You have to see this he rails against bank lies

CNBC: Mad Money host Jim Cramer discusses doomed financials and the Fed

Latest bank results belong in the fiction section. They laughed their heads off selling this junk to Germans, Australians. No one prepared to tell the truth and the Federal government won't hold them to account. He is ranting again great entertainment!

Posted by happyrenterz @ 09:57 PM 0 Comments

Currency ETFs

seekingalpha.com: Give a Warm Welcome to the Currency ETFs

Seems like a great idea to hedge against a falling pound.

Posted by happyrenterz @ 09:49 PM 0 Comments

An interesting development...

Telegraph: Some hope as property stocks go through roof

The stockmarket is a wonderfully perverse beast and the spectacular showing by the property sector showed it at its most unpredictable. This was the day, remember, on which Investment Property Databank, the industry bible, declared December the worst month for the sector since it began collecting figures more than 20 years ago.

Posted by stevie dee @ 08:52 PM 0 Comments

Is the fat lady clearing her throat?

AP - Yahoo: Stocks Extend Slide As Manufacturing Index Falls; Bond Insurers Fall Amid Fears of Losses

Stocks skidded lower Thursday after a regional Federal Reserve report showed a sharp decline in manufacturing activity and as investors grew concerned that downgrades of key bond insurers could trigger further trouble with souring debt.

Posted by stevie dee @ 08:28 PM 0 Comments

His house depends on it. Is he a shareholder too?

Evening Standard: Darling's plan to pay off Rock investors

The Government is drawing up plans to compensate angry Northern Rock shareholders as nationalisation of the mortgage lender draws ever closer.

Posted by yoyo1 @ 04:44 PM 14 Comments

Japanese Banks in for a rough ride

Reuters: Japan's subprime losses increased since Sept -FSA

Japanese banks' subprime valuation losses have expanded since the end of September, the head of the Financial Services Agency said on Thursday. FSA Commissioner Takafumi Sato made the comment at a regular briefing. The regulator has previously said Japanese banks' subprime exposure stood at around 1.2 trillion yen ($11.20 billion) as of the end of September.

Posted by lvmreader @ 04:43 PM 0 Comments

Deconstruction of some dumb platitudes

Bloomberg: Subprime Losses Are Big, Exaggerated by Some: John M. Berry

In the comments section, I will deconstruct all this chaps points. @Drewster - if you don't like this or understand its relevance to Houses/Housing Markets - I don't care.

Posted by lvmreader @ 04:42 PM 8 Comments

Bernanke: Juice the economy 'quickly'

CNN: Business Article

Or sorry, should that be print some more dollars or sterling?

Posted by orwell @ 04:24 PM 1 Comments

Here we go again .....

CNN MONEY: Bush: Stimulus plan needed

This reminds me of a comedy sketch of the guy who keeps trying to solve a problem but only serves to make it worse! What can they try to come up with now - free money to households to spend in the shops???

Posted by waitingfor hpc @ 04:11 PM 2 Comments

Aren't they knackered yet?

AP - Yahoo: Bush and Bernanke Back Package to Stimulate Weakening Economy

President Bush and Federal Reserve Chairman Ben Bernanke on Thursday embraced calls for an economic stimulus package to avert recession. Bernanke said such a plan should be quickly implemented and temporary so that it won't complicate longer-term fiscal challenges.

Posted by stevie dee @ 03:24 PM 0 Comments

USA mortgage meltdown: now the rents

CNN Money: As home prices fall, rents flatten

Home prices dropped last year in most cities around the nation, and now rents are flattening out in many of the markets worst hit by the housing downturn. The median monthly rental bill rose just 0.5 percent in 2007. National rent increases had averaged between 2 and 3 percent annually the previous several years. Instead of selling at a loss, BTL investors are now renting them out. ------ San Francisco and New York are exceptions where "massive demand" more than offset increased supply. These cities compete in a "global market" and by world standards they're still relatively inexpensive for foreign currency-based consumers taking advantage of a weak dollar. ------ I guess that means London won't be falling either?

Posted by drewster @ 03:18 PM 6 Comments

We all have to grow older so we can value money

Reuters (columnist James Saft ): Recession risk as British bills come due

Many Britons have known only rising property values and low unemployment during their adult lives, and have spent as if this would go on forever.

Posted by acetip @ 01:28 PM 1 Comments

More bad news from the US

Fox business: December Housing Starts Drop 14.2%, Building Permits Dip 8%

Remember folks, it can't happen here......

Posted by davros @ 01:26 PM 0 Comments

That's a 50% drop in price ... in plain speaking !!!

Property Week: Estate agent confidence 'at lowest since 90s', says RICS

In its UK housing market survey for December 2007, made available today, RICS reports that 61% of surveyors have reported a fall in prices over the last three months compared to 38% recording no change and 1% recording an increase. The figures indicate that the seasonally adjusted balance of surveyors reporting a rise in prices is -49.1% - the worst since November 1992.

Posted by fahrenheit451 @ 12:00 PM 44 Comments

Net Loss of $7.8bn (3.9bn) for 2007

BBC: Merrill Lynch posts $7.8bn loss

Merrill Lynch today blamed the problems in the US Mortgage market for the loss. Company chairman and chief exec John Thain called the performance, "clearly unacceptable". My guess is that he must have been on holiday during the period that the losses were generated.

Posted by denzil @ 11:59 AM 2 Comments

Next Domino

Reuters: Wealth may be next in line in US home crisis

Covers borrowers with good credit rating that have over extended or Mew'd

Posted by yoss @ 11:09 AM 4 Comments

Gorgeous Merryn with some more bear food.

MoneyWeek: Why estate agents are selling up

The managing director of a business broker told me that in the last three weeks he has been contacted by 17 estate agents, all looking to dispose of their businesses in a hurry. It is not, as the firms MD pointed out, a ringing endorsement of the property market. Estate agents dont necessarily need house prices to keep rising to keep making good profits but they do need people to keep buying and selling houses. Whether they sell a house for 500,000 or 550,000 is neither here nor there to the average agent but whether they sell one of them or two houses is (that makes a difference of 10,000). Right now transactions are in free fall and likely to stay that way.

Posted by little professor @ 11:02 AM 5 Comments

UK employment figures don't tell the full story

MoneyWeek: UK stocks are in a bear market - it's official

Amid all the gloom, with stock markets tanking around the world again yesterday, UK employment figures were supposed to be a rare ray of sunshine. But as weve already seen from America, employment is a lagging indicator it only starts to turn down after everything else has gone wrong. And with the FTSE 250 now in bear territory, the FTSE 100 could soon follow...

Posted by mary @ 10:38 AM 1 Comments

If Money Were A Person

Not Born Yesterday Web Site: INVESTING MONEY: THE TEN COMMANDMENTS

There are many things that can be said about money, one truth is: The more trust you put into it, the more valuable it becomes. If Money were a PERSON, what would he/she say about the way everyone (or any individual or group) is treating IT these days (and in the past)? Please post your answers and views.

Posted by down wave @ 10:30 AM 2 Comments

Buyers defer purchases as lenders tighten criteria for mortgages

Times online: Barratt order book falls in tough market

The housebuilder's forward order fell by 6% as buyers deferred purchases and lenders tightened criteria for mortgages. The faltering housing market has taken its toll on Barratt Developments, Britain's second biggest housebuilder, after its forward order book for new homes has fallen for the first time in almost four years. Barratt, which bought its competitor Wilson Bowden in a 2.2 billion deal last April, also reported a slight fall in its average selling price across private and social homes from 179,500 to 177,900, which reveals the extent to which the market for new homes has changed.

Posted by jack c @ 09:50 AM 1 Comments

Brown Alert!

BBC News: Darling calls for market action

You have to laugh if it wasn't so serious. "Policy makers must act quickly to tackle the "enormous" problems faced by the world's financial markets, Chancellor Alistair Darling has said.... .... European central banks have acted to prevent global credit markets freezing by injecting liquidity." Now wasn't it this same "injecting liquidity" that got us into this sorry mess.

Posted by paul @ 09:40 AM 2 Comments

No upper limit on which a borrower could stop making repayments proposed !

Times online: Government's court order plan will allow people in debt to keep their creditors at bay

The Ministry of Justice announces the biggest shake-up in personal insolvency laws for years, which will permit borrowers to take a "repayment holiday". Borrowers will be allowed to stop repaying debts by taking out a court order, under radical plans outlined yesterday by the Government. The proposals would mark the biggest shake-up of personal insolvency legislation in years and come at a sensitive time for the financial services industry, which is bracing for an increase in consumer bad debts.

Posted by jack c @ 09:36 AM 16 Comments

Boarded Up Pubs about to hit the market

The Guardian: Punch first to report smoke damage

Britain's biggest pub landlord, Punch Taverns, has seen a marked deterioration in trading in the traditionally busy Christmas period as the industry continues to suffer from the impact of the smoking ban and declining consumer confidence. then "We think there is still a lot of unsold beer left in pub cellars and it typically takes until the end of the month to get a proper fix. Tenants in trouble will sell the stocks they have before throwing in the keys."

Posted by brian2 @ 08:32 AM 9 Comments

Can we trust what Golmman says

The Telegraph: Gold may hit $1,000 in third qtr, Goldman says

Weren't they predictng $650 1 month ago. I think we will have some consolidation around the 830-850 mark.

Posted by sold 2 rent 1 @ 08:09 AM 7 Comments

Down 24pc from its peak

The Telegraph: Japanese stock market plunge rattles Fukuda

The Nikkei index has dropped 11pc in barely two weeks, recording the worst start to the year since 1945.

Posted by sold 2 rent 1 @ 07:55 AM 6 Comments

In truth: The big boys have been tinkering with the markets for months. Tell us something new!

Telegraph: Japanese stock market plunge rattles Fukuda

It seems like an orderly decline over last couple of months for both the DJIA & FTSE, yeah the Japanese market is plunging, but when the leader talks about possible intervention, then it just highlights how genetically modified markets are closer to home. Correct me if you believe differently, I have been watching gold as my barometer, and with the discussion of waves etc and the strengthening of gold on HPC, it is remarkable how well some contributors to HPC have been in forecasting the trends of gold.

Posted by stevie dee @ 07:09 AM 0 Comments

Round-up of US housing market

Fool.co.uk: More Housing Horrors Across The Pond

"The US housing market slump is widening out. It seems that even New York is feeling the pinch as residential areas east of Manhattan are now suffering. [...] There are clear differences between our own [UK] housing market and the US or Canada. UK prices may well not crash. But once property values start to slide, the decline can last not just for months, but for years."

Posted by drewster @ 01:13 AM 1 Comments

Stick your head in the sand and hope the problem will go away

Telegraph: Obsessed with house prices? Me? Not any more

"My new year's resolution - never, in any circumstances, to worry what my house is worth. A disproportionate amount of my net worth is tied up in my property. Even if I can keep up with my mortgage repayments, a fall in house prices could have all kinds of other knock-on effects. Scary. Hence the resolution. I can't control what happens to house prices but I can, to an extent, control how much I let movements in house prices play on my mind. It is a head-in-the-sand strategy. But then why should ostriches always get a bad press?"

Posted by drewster @ 12:27 AM 7 Comments

Wednesday, January 16, 2008

Strockbroker, Estate Agent, Financial Advisor Required for Garden Work (Compost Heap)!

AP - Yahoo: Somber Fed Says Economy Has Lost Punch

The Fed's snapshot of business conditions showed a national economy losing momentum heading into the new year and a future riddled with uncertainty. The persistent housing slump and harder-to-get credit are making people and businesses ever more cautious, it said.

Posted by stevie dee @ 11:00 PM 0 Comments

House Prices Falling

Reuters: House prices fall at fastest rate since '92

LONDON (Reuters) - House prices fell in December at their fastest rate since the recession of the early 1990s, a survey showed on Wednesday, raising fears the country's once buoyant housing market is heading for a sharp downturn. The Royal Institution of Chartered Surveyors' house price balance fell to -49.1 in December, its lowest since November 1992, from -40.6 in November. The consensus was for a more modest drop to -45.0 and the fall marked the fifth consecutive month of easing prices. Surveyor confidence in the sales and price outlook deteriorated markedly, the survey showed, with both measures reaching their lowest level since the questions were first included in the survey in 1998. ...

Posted by ukuser1 @ 10:45 PM 1 Comments

Landlords see falling prices as an investment opportunity

Citywire: Landlords see falling house prices as investment opportunity

Buy-to-let loans rose dramatically at the end of last year, accounting for a surprising 39.55% of all mortgages arranged through property consultants Hamptons in December 2007, compared with just 17.9% in December 2006. Meanwhile, borrowers taking out loans for house purchase declined sharply from 35.94% in December 2006 to just 13.18% in December of 2007.

Posted by jack c @ 08:11 PM 17 Comments

Hear no evil...

Firstrung: 2008: Falling house prices probable...a house price crash unlikely - Lombard Street Research

Bad news on the residential property market is coming thick and fast, with real mortgage approvals down by a third since July and the prices balance of the RICS survey now at its lowest point since 1992. The fall in average house prices that was registered in Q4 last year looks set to intensify in coming months. But a peak to trough collapse in prices of 15-20% la the early 1990s does not seem on the cards.

Posted by converted lurker @ 06:57 PM 4 Comments

galactical house price crash then?

This is Money: Estate agents selling the moon

Does any one have info if this means we are in a galactical price crash then, originating from the universal credit crunch, are prices on the moon still stable or are they falling, I have a nice location on venus , its a real hot one!

Posted by camping @ 06:35 PM 0 Comments

Future bricks and mortar held by .comcrete

trendirama: Why Domain Names are the Best Investment for the Future

It seems that as the younger generation are unable to get on the real property ladder they have been compensating their real world financial shortcomings by buying up digital land at a phenomenal pace - and for only 10 a shot - in the form of domain names. The twist being that much of this new internet land has started to come to fruition as incredibly valuable 'land' - hence diamonds.com going for $7million. This article probably shows how differently the younger generation think - especially with regard to the concept of owning 'land'. It's also amusing to see that even domain names are being jumped on by a buy-to-let frenzy - as good names are being secured - and then rented out on a monthly basis.

Posted by major moment @ 05:46 PM 2 Comments

UK BTL locusts take note

New York Times: New Troubles for Apartment Mogul in South

"A few years ago, Mr. Smuck, 59, began making a comeback. Outbidding other investors, his MBS Companies, based in the New Orleans suburb of Metairie, quickly amassed a portfolio of 65 garden apartment complexes throughout Texas with 17,000 units. But now, Mr. Smucks real estate empire is coming apart for the second time. Most of his $900 million in loans are delinquent, some are in foreclosure, and his management company filed for bankruptcy protection on Nov. 5."

Posted by happyrenterz @ 05:14 PM 7 Comments

Rats in Manchester too? Who'dda thunk it?

Manchester Evening News: City's plague of rats

SWARMS of rats have infested alleyways in Manchester city centre and are gorging on restaurant waste. These shocking pictures, taken just before dawn, show large brown rats scurrying between piles of bin-bags, discarded cardboard boxes and restaurant litter. Pest controllers have seen a 100 per cent increase in call-outs for rat infestations in Manchester city centre in recent years, but council officers say Chinatown has the biggest problem.

Posted by lvmreader @ 03:44 PM 12 Comments

This will help the House Prices in Liverpool

BBC News: 'Plague is back', expert claims

The bubonic plague, which killed millions of people in medieval England, is making a return in the world, an ecology expert in Liverpool claims. Research by Professor Michael Begon at the University of Liverpool revealed the deadly disease, also known as the Black Death, has re-emerged. It has only killed 200 people since 1998, but Prof Begon said the threat is "growing" in Africa and the US.

Posted by lvmreader @ 03:42 PM 9 Comments

US inflation reaches 17-year high but not in the UK

BBC News: US inflation reaches 17-year high

Consumer prices rose by 4.1% for all of 2007, up sharply from a 2.5% increase in 2006, the US Labor Department said. The figures also showed consumer prices rose by 0.3% in December, down from November's increase of 0.8%. Energy prices jumped 17.4% in 2007, while food prices rose 4.9% - their biggest increase since 1990. UK inflation at 2% an all time low? Who's cooking the books? You can fool some of the people some of the time!!!

Posted by lloyd @ 03:25 PM 8 Comments

Stagflation ahead

Safe Haven: The Fed's 20-Year Misguided Monetary Adventure

This guy puts a decent case for stagflation. I think his stagflation model could lead into a depression if assets fall so hard they drag down consumer prices.

Posted by sold 2 rent 1 @ 03:20 PM 2 Comments

UK house price decline worst since 1990s slump

Timesonline: Times

New figures suggest the housing downturn is gathering pace as unsold properties build up and surveyors' confidence falls

Posted by aqp @ 02:38 PM 2 Comments

What ya gonna do BoE?

The Business: Inflation puts urgent rate cut in doubt

Inflation is above the Bank of England's target for the third month in a row, raising doubts that it will cut interest rates as fast as the market expects this year. The news helped the pound to rebound after its recent run of declines, with sterling rising 1 cents to $1.9714 against the dollar, but failed to lift the FTSE 100 index which tumbled 190 points to 6025.6.

Posted by submedia @ 01:50 PM 8 Comments

Who Does Capitalism/The State Really Benefit?

The Independent: Britain's land is still owned by an aristocratic elite

Who owns Britain? Most of us would instinctively reply: we do. The British people own the British Isles. This is a democracy, isn't it? But the facts tell a different story. When you look at a map of the British Isles, you are looking not at your home but at a land mass overwhelmingly owned by a tiny aristocratic elite. Extraordinary though it might seem, in the 21st century, 0.6 per cent of the British people own 69 per cent of the land on which we live - and they are mostly the same families who owned it in the 19th century.

Posted by bearorbull @ 01:46 PM 17 Comments

House prices past the brink in truth

Metro: House prices 'on the brink'

On the front of the London Metro this morning. I was loathed to "read" it, but at least the dummy hacks are turning their tune, as I'm guessing a lot of EAs & property development companies are pulling their ads, thereby reducing the vested interest angle.

Posted by doomwatch @ 01:15 PM 9 Comments

Banks need more regulation

FT: Some of my best friends are bankers

Martin Wolf of the FT writes "By paying huge bonuses on the basis of short-term performance in a system in which negative bonuses are impossible, banks create gigantic incentives to disguise risk-taking as value-creation. Yet individual institutions cannot change their systems of remuneration on their own, without losing talented staff to the competition. So regulators may have to step in. The idea of such official intervention is horrible, but the alternative of endlessly repeated crises is even worse. I understand that the bankers will not like this. Yet one thing is surely now quite clear: just as war is too important to be left to generals, banking is too important to be left to bankers, however much one may like them." I agree, banks played big part in our hp bubble.

Posted by happyrenterz @ 12:36 PM 9 Comments

Japanese Banks also want a slice

Times: Japan poised to rescue Wall Street banks

"The three wealthiest Japanese finance houses are set to step into the worsening sub-prime carnage as the silent investment partners of Wall Street and Europe's stricken banking titans." The Yen at its highest level in years will help.

Posted by happyrenterz @ 12:14 PM 2 Comments

Beat a slowing property market

Times Online: Ten things you need to know about... adding value to your house

Affraid that your house may loose value in 2008? There are ways of boosting the value of your own home even through sluggish times, provided that you are careful and canny.

Posted by peter @ 11:57 AM 4 Comments

Who's wearing the concentrated shorts?

SilverSeek.com: Danger Zone

One for S2R1 and techieman, and anyone else interested in metals. Watch out for the concentrated shorts (who are these guys?!) - there could be blood on the carpet. Sorry if this seems a bit off the HPC topic, but all these things are related and there has been much talk of gold lately on the forum.

Posted by harold @ 11:54 AM 11 Comments

What true inflation will be soon !!!!!!!

The Independent: The Real Cost of Living

Inflation 5% by spring , if not allready.......

Posted by johnnyp @ 11:23 AM 1 Comments

Another massive subprime writedown coming

FT: Brace yourselves

S&P announced it was adjusting its cumulative loss measure on 2006 subprime collateral to 19 per cent - up from 14 per cent: It will mean huge new downgrades on CDO tranches from the 2005 vintage through to 2007 - the majority of the market, in other words. We suspect this will push hundreds more CDOs through events of default and a significant number into liquidation - a likely repeat of the disastrous events in November and December, when CDOs went into meltdown and banks were forced to admit further humiliating writedowns.

Posted by genie @ 11:10 AM 1 Comments

New data raise a question mark over interest rates cut

Times Online: Rate cut in doubt as jobless falls to 32-year low

The data, which follow yesterdays figures showing that consumer price inflation remains unchanged at 2.1 per cent, add to the case for the Bank of England's Monetary Policy Committee to keep interest rates on hold

Posted by peter @ 11:00 AM 0 Comments

HPC gathers pace

Times: A short, sharp housing shock may be best

Suppose the gloomsters are right. Suppose house prices do fall significantly. Suppose there really does have to be a significant adjustment to bring residential property values back towards their normal relationship with wages. How do we as a nation best get there? A short, sharp shock might be the lesser of two evils. Just don't expect estate agents to agree.

Posted by jack c @ 09:22 AM 23 Comments

December marked the fifth consecutive month of falling prices, according to the Rics survey.

BBC: House price fall 'at 1990s rates'

I know this article has been posted today from other sources but I quite liked the BBC headline, its a beauty! The 5th consecutive month of falls is also a cracker.

Posted by geed @ 09:17 AM 24 Comments

largest monthly fall since records began in 1986

The Telegraph: Property returns plunge to IPD all-time low

"Property values, meanwhile, crashed 10pc in 2007, a fall not seen since the recessions of the early 1990s and before that the mid-1970s."

There is the 18-year HP cycle again.

Posted by sold 2 rent 1 @ 09:09 AM 1 Comments

Is this Elliott wave number 4

Market watch: Gold falls first day in six as traders take profits

Gold is down to $882. If this turns out to be Elliott 4 then it could correct down to the low 800s. What we want here is a longish consolidation and for the 200 dma to catch up before wave 5 takes off and we fly through the $1000 mark.

Posted by sold 2 rent 1 @ 09:04 AM 10 Comments

Property stocks have further to fall

MoneyWeek: Stocks still aren't cheap enough to be a bargain

It's been a bad start to the year for stockmarkets, with the troubled retail and property sectors leading the way. But now the bargain-hunters are appearing in droves. Should we be joining these seemingly clever people in the rush to buy discounted shares? Probably not...

Posted by mary @ 09:02 AM 0 Comments

This really is global isn't it!

Guardian: China property firm's woes spark fierce protests

the country's biggest real estate agency, said it had closed 1,000 of its 1,800 outlets since October because of a deteriorating market

Posted by inbreda @ 08:59 AM 1 Comments

the house of cards comes tumbling down...

bbc: Asian shares fall on US worries

Investors have been spooked by huge losses at Citigroup Asian stock markets have dropped sharply amid a growing conviction that the US - the region's key export market - is heading for a recession.

Posted by george monsoon @ 08:31 AM 2 Comments

House prices dropping in NZ.

New Zealand Herald: Cheaper houses may be on the way as market tanks

For those frozen out of the housing market by high prices, data suggested cheaper houses may be on the way, economists said today. Real Estate Institute (REINZ) figures showed the median house price fell 2 per cent in December...

Posted by ashwina @ 03:43 AM 1 Comments

London is grim, why would any of us want to live there anyway?

Telegraph: Is it any wonder people are fleeing London?

"Last year, nearly a quarter of a million people packed their bags and left the capital for good. This week alone in London, a medical student was stabbed to death in a Brixton fruit shop; a pupil who was expelled for allegedly having a knife took his school to the High Court; and a teenage girl underwent an unimaginable ordeal in an ordinary suburban street. What is going to happen to those of us left to live here if youths across the city continue running amok? London is a welcoming city, where home-grown and particularly international criminal networks are flourishing nicely. Somewhere in the city, a great termite's nest of law-breaking and corruption grows by the day." -- Seems like the flip side of international super-rich is the gangs of international criminals!

Posted by drewster @ 03:29 AM 8 Comments

Bear Territory Ahead

Guardian: Housing market closest to slump for 15 years, say chartered surveyors

House prices across the UK tumbled in December at the fastest pace in more than 15 years as tighter mortgage lending and higher interest rates pushed the property market closer to the biggest crash since the early 1990s, the Royal Institution of Chartered Surveyors says today.

Posted by quiet guy @ 01:06 AM 13 Comments

Truly Terrifying Figures From Rics........

The Times: House price falls as bad as 1990s

if your a housing bull that is. The feeble attempts at spin from the now quaking RICs mouthpiece is laughable.

Posted by andy hamilton @ 12:17 AM 3 Comments

"swiftly plummeted to recession levels" - No recession???

Telegraph.co.uk: Property returns plunge to IPD all-time low

Returns in the UK property market plunged another 3.7pc in December, the largest monthly fall for the Investment Property Databank since records began in 1986.

Posted by it_is_going_with_a_bang @ 12:15 AM 4 Comments

Tuesday, January 15, 2008

German banks now declare sub prime troubles.

BBC: German bank hit by sub-prime woes

First the US banks hit by sub prime writedowns then the UK and now a german bank. It looks like the credit crunch is spreading like a disease.

Posted by doomberger @ 09:44 PM 0 Comments

Has the GBP bottomed for the time being?

YahooBiz: British Pound Most Bullish Since November 2005

I am not a FXtrader so I can't verify these charts but this analysis says a bottom is forming for the falling pound. This is based on the COT Index (Commitment of Traders). "The COT index allows us to view the net position of each reporting class in relation to its own history, to ascertain if a particular group is aggressively positioned with a directional bias." Apparently this is indicating a turn for GBP sentiment.

Posted by happyrenterz @ 08:54 PM 5 Comments

Crock update from the Mash

The Daily Mash: NORTHERN ROCK NOW JUST TWO WORDS

NORTHERN Rock has now been reduced to its two constituent words, its directors told angry shareholders today.

Posted by tick tock @ 08:50 PM 3 Comments

A recovery rate of 3%? In your dreams bosos!

FT.com: Insight: The fire threatens credit insurance

The notional value of CDS contracts globally is $45,000bn. That represents real underlying credits of about $5,000bn. The maximum rate of corporate defaults was about 3 per cent in the 1990s recession. However, corporate speculative grade bond defaults run as high as 10 per cent. A weighted default ratio of 5 per cent (3 per cent for investment grade and 10 per cent for sub-investment grade) would mean that credits with a par value of $250bn would default. Assuming an asset recovery ratio of 30 per cent, the hit would be $175bn.

45 trillion dollars!

Posted by lvmreader @ 07:17 PM 3 Comments

Great time to buy, because "the flow of human traffic into the UK will only increase"

LandlordExpert: Nows time to jump in - its a buyers market

Interesting wording by BTL advisers

Posted by confused76 @ 06:59 PM 9 Comments

Great tool for seeing how much trouble the GBP is in

Google Finance: Pound vs Singapore Dollar

We are going to be seeing a lot of pain here. Think 2.45% inflation? What happens to inflation when we drop 30% of the GBP's value? Hint: It goes up at least 30%. Look at

  • GBPEUR
  • USDEUR
  • GBPCHF
  • USDCHF

Posted by lvmreader @ 04:27 PM 10 Comments

FTSE 100 = 6034.00 - A bloody awful day...

bbc: bbc Stockmarkets

Not strictly related, but a good indication of the mess we are in.

Posted by hpwatcher @ 04:24 PM 1 Comments

The LVMReader Predictions

FT.com: This is not merely a subprime crisis

This chap forgot to mention Municipal Bonds. When councils cannot collect revenues, they cannot keep up their bond payments. Worse still, many councils seem to have been receiving revenue streams from money market instruments tied to SIVs. As these have defaulted, places like Florida have found they cannot pay their bills. The crisis has stemmed from a complete disregard for the systemic effects of larger than expected levels of defaults and egregiously bad pricing of risk. Scenario analyses would have mitigated the worst effects and better still, have prevented people running blindly into such risk. I think that the next default risks are as follows;

Posted by lvmreader @ 04:21 PM 4 Comments

Hard times ahead for UK economy

MoneyWeek: The good times have come to an end

The past decade has been a golden one for the UK consumer. But the British public is not yet fully aware of how hard things are going to get. Overall, things are going to be tough for the Brits, whose lifestyle quality has already deteriorated for reasons unconnected with the economy bossy but often incompetent bureaucrats, regulatory and red-tape mania, extensive social breakdown in many areas of major cities, poor public services and a bloated welfare system riddled with fraud.

Posted by mary @ 02:00 PM 8 Comments

Who's next for BOE assistance?

Mortgagestrategy: London Scottish withdraws from secured loan market

London Scottish Mortgages has suspended its secured loan business until further notice. The lender wrote to brokers yesterday informing them that it will not accept cases submitted after January 15, 2008 and will instead focus on its first charge business. The move is yet more bad news for brokers in the secured loan market who have been struggling to place business with lenders.

Posted by jack c @ 02:00 PM 3 Comments

Essential support from the Bank of Bailouts

MortgageStrategy: Northern Rock completely reliant on 25bn BoE loan

Northern Rocks chairman has revealed the bank has become completely reliant on the Bank of England and the Treasury to continue to trade.

Posted by jack c @ 01:49 PM 3 Comments

LOL! BoE looks cornered!

BBC: EDF Energy set to increase prices

EDF Energy has announced it is putting up its electricity prices by 7.9% and gas prices by 12.9% from Friday.

Posted by tyrellcorporation @ 01:48 PM 6 Comments

Utter desperation, "Redrow re:assure"

PropertyNews: House price promise provides reassurance for buyers

"Flying in the face of gloomy media speculation about interest rates and house prices, Redrow is making a spectacular promise to home buyers interested in the stylish one and two-bedroom apartments at Lindum Point in Bunkers Hill, Lincoln: buy now and we will help you protect the price of your home for up to three years." "Perfect for a range of buyers including first timers, buy to let investors and the lock up and leave brigade,"... what's the LockUpAndLeave brigade? desperate housebuilders MWAUU UAHH HAHA HAHHAHAH

Posted by confused76 @ 01:44 PM 12 Comments

What did our teachers tell us about building on the sand?

ITV1 10:35pm: Sandbanks

Starting tonight a 3 part series focusing on one of the most heated of all British property hotspots. Meet the VI's who can sell a 3 bed house complete with damp problems for over 4 million pounds. However the economic tide has turned and is set to wash the bubble away, along with climate change which will sink this one time Dorset sand dune!

Posted by yoyo1 @ 01:27 PM 2 Comments

2.45% rejected, 4.3% (RPI) wanted by teachers

Guardian: Teachers threaten strike action over pay

First the police, now the teaches.....look forward to a summer of strikes! ''The National Union of Teachers is considering whether to follow through with an earlier threat of a one-day strike, following today's pay announcement. New trouble on the public sector pay front comes as the prime minister, Gordon Brown, has put his credibility on the line to restrict wage inflation, which has already provoked protest from police.''

Posted by hpwatcher @ 12:40 PM 7 Comments

Some nice facts in this one

Guardian: CREDIT WRAPUP 1-Citi writes off $18 bln, Merrill gets capital

"Citigroup wrote off a colossal $18.1 billion on Tuesday and secured new capital as Merrill Lynch, also seen heading for big losses ..."

Posted by inbreda @ 12:29 PM 0 Comments

More fuel for the fire

Guardian: Borrowers stung by soaring rates

Average interest rates on personal loans have jumped to nearly 15%, or close to double the headline rates used by banks to entice borrowers...

Posted by inbreda @ 12:24 PM 3 Comments

Not very often

Motley Fool: How often do house prices fall?

Very itneresting article. House prices have risen for 20 out of the last 24 years. Halifax HPI puts the long-run average at 7.9% since 1983, whereas the Nationwide has it at 8.7% a year since 1952.

Posted by little professor @ 12:07 PM 4 Comments

Is it 'safe' now?....

Firstrung: Interest rate hold will ease pressure on sterling

The Bank of England has decided to leave interest rates unchanged at 5.5% offering some much needed respite for Sterling according to currency specialists HiFX...Chris Towner, Currency Strategist at HiFX explains:"Sterling has been under considerable pressure following the Northern Rock crisis and concerns surrounding the UK economy. Although the market is now pricing in the high probability of a cut when the MPC next meet in February, plus another cut in the second quarter of 2008, it must be noted that GBP has already been sold off quite aggressively in anticipation of rate cuts....

Posted by converted lurker @ 11:53 AM 3 Comments

Wow! that's quite a spike, hope Xmas was worth it...

Firstrung: Individual Voluntary Arrangements (IVAs) up 67% in a month

Terry Balfour, director of IVA.com believes that hard pressed households, many of whom are still clearing their plastic debt from Christmas 2006, will eventually buckle under the onslaught of bills timed to arrive this week. "January is the cruellest month when it comes to bills, this explains why we are experiencing such a surge in queries for IVAs. And with similar reports filtering from the industry about the number of phone calls/emails about debt advice, we predict it will outstrip 2007's total of 110,000 insolvencies, when 1.3bn was written off in bad debts as a result of individual voluntary arrangements."

Posted by converted lurker @ 11:48 AM 0 Comments

New house sales orders slump.

Bloomberg news: Taylor orders drop 19% as credit deters buyers.

Taylor warning of a slump in orders does no bode well.

Posted by doomberger @ 11:09 AM 0 Comments

Flawed HPI assumption caused Government's Olympic funding black hole

MoneyWeek: Do houses prices really only ever go up? Ask the Government

Plenty of otherwise sensible people have bought overpriced property on the assumption that prices could only go up. Funnily enough, the Government based its financing of the Olympic site in Stratford on the same premise...

Posted by mary @ 10:55 AM 4 Comments

London crashing

Primelocation: House price index

Most areas of the capital experience a fall in average asking prices. Average prices of prime London property for sale finish the year 13.0% higher than in December 2006, although significantly down on the yearonyear peak of 31.2% witnessed in the boomtime of June 2007. Prime country property for sale in the South is hit hardest, with month on month prices down 1.9% in the South East. Rental values of prime London rental property decline in December, down 0.1%, due to unprecedented unrented stock and weakening corporate demand. HURRAH!!!!!!!!!!!!!!!

Posted by confused76 @ 10:37 AM 22 Comments

agreed over three years.. oh dear!

bbc: Teachers given pay rise of 2.45%

Teachers in England and Wales will get pay rises above the 2% set by Prime Minister Gordon Brown. This is another slightly off topic, but relevant because the teachers have been conned into signing up for a deal over three years..

Posted by george monsoon @ 10:14 AM 11 Comments

The office for made up statistics

Reuters: Inflation steady in December

LONDON (Reuters) - Annual consumer price inflation held at 2.1 percent as expected in December, above the Bank of England's target for the third month running, official data showed on Tuesday. The Office for National Statistics said consumer prices rose 0.6 percent last month, the biggest monthly gain in a year, keeping the annual rate at 2.1 percent.

Posted by jack c @ 09:22 AM 17 Comments

Homeowners on a flood plane are moaning again!

bbc: Stormy weather raises flood fears

Families and householders hit by last summer's flooding are bracing themselves for more severe weather. It beggars belief that someone would buy a house on a flood plane and expect sympathy, or even an insurance policy. I know this is a bit off topic, but relevant just because many property developers have been buying cheap "floodplane" land and not passing this information on to the buyers..

Posted by george monsoon @ 09:11 AM 10 Comments

Is this why gold is rising?

The Telegraph: ECB warns crashing dollar may stop Fed cuts

Rumours of an emergency rate cut over coming days by the US Federal Reserve have swept the global markets, setting off a fresh plunge in the dollar.
Gold surged to an all-time high of $914 an ounce in New York on bets that the authorities will flood the global system with further liquidity to stave off a mounting debt crisis.

Posted by sold 2 rent 1 @ 08:40 AM 13 Comments

This should delay IR cuts

The Telegraph: Food cost increase adds 750 to annual bill

Food prices are accelerating at their fastest rate since records began, fuelling a rise in the average family's shopping bill of 750 a year.

Posted by sold 2 rent 1 @ 07:49 AM 5 Comments

December down again

FT Acadametrics: FT House Price Index

Decembers report from Acadametrics shows just a 0.1% rise for December 2007. Dr Peter Williams: "As our national index summary indicates, the market has been slowing on a monthly and annual basis since August".

Posted by growler @ 07:21 AM 0 Comments

2012 Olympics Plan Requires Land Price Rising at 16% Per Annum!

The Times: Revealed: 1 billion Olympics black hole

Britain faces a 1 billion black hole after the 2012 Olympics because of ludicrous property price projections backed by ministers, it emerged last night ... Ken Livingstone, the Mayor of London, and Tessa Jowell, the Olympics Minister, signed a memorandum of understanding last year stating that at least 1.8 billion would be raised in land sales after the Games. The LDA now fears that this figure, based on a 16 per cent per annum increase in land prices in Stratford, East London, over the next 15 to 20 years, is too optmistic.

Posted by quiet guy @ 01:38 AM 5 Comments

Deposits double from 5% to 10% (so affordability drops 50%)

Guardian: Lenders raise deposits on buying homes

Two of Britain's biggest mortgage lenders, Alliance & Leicester and Britannia building society, have doubled the minimum deposit demanded from first-time buyers in the latest sign that banks are anticipating a downturn in house prices. Borrowers will have to pay a minimum deposit of 10% on the price of a property compared with 5% before. A typical first-time buyer with a 7,500 deposit can now only afford a house worth 75,000, instead of one worth 150,000. Big lenders such as Halifax, Abbey and Nationwide to continue to offer 95% loans.

Posted by drewster @ 01:00 AM 1 Comments

The rich are leaving London and moving overseas

Telegraph: Is London losing its lustre?

Last year, London was in the middle of a full-throttle, moneyed, golden age. But suddenly the super-rich are showing signs of having had enough. The have-yachts are sailing away. London is beginning to lose its appeal. The Greek shipping families recently held a meeting to discuss re-locating to Cyprus. German fund managers are considering Geneva, as are various French entrepreneurs. American hedge fund managers want to cash in their real estate in Kensington and return to Connecticut where their children can have a pool in their backyard. "The weather is dire, the streets are dirty, the rubbish is rarely collected, the transport is dire." It will be back to the late 1970s when London was a dreary place with rising crime, terrible food and dowdily dressed women.

Posted by drewster @ 12:09 AM 14 Comments

Monday, January 14, 2008

It's Brown's mess so let him lie in it

Times: Conservatives would not block bill to nationalise Northern Rock

The Conservatives have a brainwave, it's called letting the government get on with it and seeing what happens next.

A very good move, now it's your turn Captain Darling and Mr Brooon.

Posted by enuii @ 10:16 PM 6 Comments

Shadowy company to sink 1Billion in UK property companies

Property stocks rebound on Laxey hopes: FT

The activist investor company Laxey has announced plans to launch a 1 billion property fund, designed to take advantage of the sharp drop in the share prices of many listed property companies. Land Securities, the UKs largest-quoted property company, is currently trading at well over 30 per cent below its Net Asset Value while British Land is nearly 50 per cent below. The company will take stakes of upto 20% in UK property companies, which it described as very cheap. Property stocks rebounded on the news.

Posted by little professor @ 08:47 PM 1 Comments

Price slide for Detached houses and Bungalows

Mail: Detached house prices plummet as property market enters slowdown

The price of detached homes has fallen by 2.4 per cent as the property market enters a slowdown. House prices fell by 0.8 per cent during November, while annual growth slowed to its lowest level for 12 months, Government figures showed today. Annual house price inflation dropped to 9.5 per cent during the month, its lowest level since November the previous year, according to the Department for Communities and Local Government. The monthly fall, which left the average home in the UK costing 218,330, was driven by a 2.4 per cent drop in the price of detached houses as well as a 0.9% fall in the cost of bungalows.

Posted by jack c @ 08:04 PM 7 Comments

Mortgage lenders cut maximum borrowing level

Reuters: Mortgage lenders cut maximum borrowing level

Eleven mortgage lenders have reduced the amount of money they will lend to home-buyers, as expectations of a property price slowdown grow.

Posted by bobed @ 07:28 PM 4 Comments

"While I can live with a relatively minor fall in value from 170,000 to 165,000, one has dropped from 700,000 to 600,000 - a massive 14%"

Mortgagestrategy: Surveyors must not stall the market

Why downvaluations are happening is a mystery. I realise that the property market is generally flat with potentially falling values on the radar, but if valuers continue to give lower than anticipated valuations, the prophesy will become self-fulfilling. We are already in danger of talking the market into the doldrums but if valuers are starting a trend we could be in trouble soon. This may be a good time for lenders to exert a steadying influence on their surveying partners.

Posted by jack c @ 06:44 PM 17 Comments

This years total number of insolvencies are likely to outstrip 2007s figure of 110,000

Mortgagestrategy: IVA.com sees 67% surge in enquiries

IVA.com has reported a 67% surge in enquiries for individual voluntary arrangements this January compared to December. The comparison site for IVAs says a lethal cocktail of credit card bills, utilities bills and the deadline for self-assessment tax payments makes January the hardest month for consumers.Terry Balfour, director of IVA.com, says: January is the cruellest month when it comes to bills as well as for many already feeling the pressure of higher mortgage repayments, along with the raft of outgoings needed purely to service their debts.

Posted by jack c @ 06:34 PM 7 Comments

No Protection against inflation

Bloomberg: Oil, Gold Show Inflation; TIPS Traders Say Forget It

Lots of people are wondering where to put money for wealth preservation. Government Inflation Bonds are no good either. "Just because oil trades above $100 a barrel, gold fetches more than $900 an ounce and U.S. consumer prices climb at the fastest rate in two years, now is not the time to buy U.S. government securities protected from inflation."

Posted by happyrenterz @ 05:20 PM 0 Comments

Up to 17 percent of South Africans could lose their homes this year.

Business Report (South Africa): Repossessions escalate as debt skyrockets

Johannesburg - Auction warehouses are full of glittering 4x4s and expensive sedans, driving the message home to the previous owners the high price to be paid for over-indebtedness. Yes, South Africans love debt and hate saving. Household debt reached a record high of 77.4 percent of disposable income in the third quarter of last year, up from 49.8 percent in the fourth quarter of 2002.

Posted by landedgentry @ 05:07 PM 4 Comments

"BTL should be avoided"

ThisIsMoney: Is it too late to get into buy-to-let?

"I have 10,000 to invest and am thinking of buy-to-let, but warnings of a property crash are putting me off. Is it too late to invest in property?" what do you buy with 10k? A kennel? nooooo... of course 10k was enough to buy a two bed flat last year.... mmmm that demand has dried up now, I am afraid

Posted by confused76 @ 04:16 PM 12 Comments

More debt to crash with houseprices

FT: Not merely a subprime crisis; CDS and global financial meltdown

"If this had been a mere subprime crisis, it would now be over. But it is not, and nor will it be over soon. The reason is that several other pockets of the credit market are also vulnerable." Serial bubbles and manipulation means all forms of debt are now dangerous and primed to go bust. The longest run of economic growth here and elsewhere were built on debt, including corporate debt. CDS (credit default swaps) will be in trouble with an economic slowdown.

Posted by happyrenterz @ 01:36 PM 1 Comments

Reality check for Rosie Millard

The Times: Well have to stop treating our homes as cashpoints

its not just speculators who are worried. Its everyone. We have known nothing other than the phenomenon of using our home as a convenient cash cow. When we first bought property, in the early- to mid1990s, everything was at the bottom of the previous cycle. For the past decade, or longer, life has gone as follows: buy something. Watch it go up in value. Laugh. Remortgage and spend the cash on another property, or a roof extension, or school fees, or a holiday in Mauritius. Now all that has changed. But everything eventually bounces back, and if you dont mind doing without an annual holiday in Barbados, what the property market does should only bother those who have to move house.

Posted by little professor @ 01:13 PM 10 Comments

Here we go, the BoE just can't cut rates (hint: inflation and falling pound, the latter causing in turn more inflation)

Times: Record inflation fails to dampen rate cut hopes

factory gate inflation reaching a 16-year high during December, fuelled by rising oil and food prices. but the Times says ... but the Bank of England is still expected to cut borrowing costs. Yeah yeah yeah, so you hope, Davidsmith!

Posted by confused76 @ 12:51 PM 25 Comments

Yet MORE Inflation evidence.

BBC News: Food costs add to price pressures

Food inflation still increasing, and above expectations. Should the BOE even be thinking about cutting rates in Feb '08 ?

Posted by c'mon correction @ 12:16 PM 0 Comments

Citigroup write-offs could reach $24 billion

MarketWatch: Citigroup write-offs could reach $24 billion

LONDON (MarketWatch) -- Citigroup may write off up to $24 billion over subprime- and credit-related losses, putting as many as 20,000 jobs at risk, according to a published report on Monday.

Posted by doomwatch @ 11:53 AM 0 Comments

Meanwhile....

BBC News: UK house price slowdown continues

As expected the market is following most expectations on this website... unexpected and boring I know, but for the record nonetheless... incidentally gold is at $915 and stock mrkets are wobbling.. remember to buy your gold sovereigns and stock-up on tinned provisions..

Posted by stevie dee @ 11:14 AM 3 Comments

The UK's very own subprime crisis

MoneyWeek: Britain's subprime problem is bigger than you think

There can't be many people who haven't heard about the US subprime mortgage crisis by now. But it's time to start focusing on what's coming next - faltering credit card companies and the UK's very own subprime surge.

Posted by mary @ 10:17 AM 3 Comments

First govt figures to include effects of credit crunch?

Firstrung: UK house prices fall by 0.8% in a single month according to latest government figures

Note that the Communities and Local Government house price index figures released in this issue are based on completions during the month of November. Other recent indicators have been based on asking prices in December or prices based on mortgages approved during December. Therefore the Communities and Local Government figures are not directly comparable with these other indicators. - I reckon this is highly significant - CL

Posted by converted lurker @ 10:15 AM 8 Comments

Gold-ramping works

Yahoo: Gold prices reach record as nervous investors pile in

The price of gold has hit a record high above $900 an ounce. The uncertainty in the markets has led investors to pick the traditionally safe haven of gold. Turmoil in financial markets and expectations of sharp interest rate cuts in the US have helped raise gold's appeal.

Posted by little professor @ 09:58 AM 24 Comments

Migration demand for housing....

Mail: Britain has to build 2 million new homes - just to cope with growing number of immigrants

Almost two million new homes will have to be built just to cope with the immigrant influx, peers will be told tomorrow. It means 263 houses must be constructed every day - for almost 20 years the equivalent of five cities the size of Birmingham during the next 18 years. Four in 10 of all new homes will go to new migrants, a report by Migrationwatch UK claims.

Posted by hpwatcher @ 09:35 AM 14 Comments

New Zealand follows the downward path

stuff.co.nz: Property price slow down

Downwards tumble here in NZ is accelerating, prices down over 4% since they peaked in September/October, although in a VI trick your all familiar with this article focuses on the now meaningless annual rise figure. When the average house price falls from NZ$406,089 in Oct 2007 to $388,253 in December (after falling to $393200 in November) you just know that if it looks like a falling knife, and cuts like a falling knife, it is, in all probability, indeed a falling knife............... But NZ is different, shortage of housing, high immigration, blah blah blah..........

Posted by andy hamilton @ 09:31 AM 2 Comments

Policymaking UK vs USA

Independent: If the Fed is busy mobilising its economic weapons, why is the BoE holding back?

"As a policymaker, what should you do faced with an economy with a huge current account deficit, a currency that's under pressure, a housing market that's hit a brick wall, a banking system that's in crisis, a mortgage lender that might be on the verge of bankruptcy, and a budget deficit that's larger than it once was"?

Posted by alan @ 09:07 AM 5 Comments

Big claim.....

The Times: Goodbye to all that: the worst is over for the global credit crunch

''Global stock markets have suffered their worst early-January trading since records began in the 1920s. Conventional wisdom is again overwhelmingly gloomy - about the global economy, the asset markets and even the sustainability of the global financial and trading systems. However, conditions are not nearly as bad as the headlines and market pundits suggest. In Britain, there seems to be almost no chance of economic and financial disasters comparable to those suffered from 1990 to 1992. ''

Posted by hpwatcher @ 08:53 AM 18 Comments

HPI in retreat!!!

home.co.uk: House Prices Falter in Uncertain Market

It's official - asking prices are not falling they are retreating and are a bit uncertain of themselves!

Posted by phdinbubbles @ 08:42 AM 4 Comments

Bonuses Down but proeprty Still the Main Target for City Executives

The Times: News Article

Well, who would have thought it? Perhaps there won't be the crash everyone is anticipating?

Posted by david-20040 @ 08:24 AM 5 Comments

Desperate Darling

Times Online: Darling fails with 12bn quick-fix asset sales

Desperate man and no-one wants to help him. No wonder Ed Balls never wanted the job

Posted by brian2 @ 08:21 AM 1 Comments

Roger Bootle bearishness

The Daily Telegraph: UK high street has echoes of 1990s recession

There are worrying similarities with the early 1990s recession - except that there has been an even bigger build-up of debt and an even bigger bubble in the housing market.

Posted by timelash @ 07:22 AM 1 Comments

boom boom bang ,

daily mail: Spanish dream home bulldozed

Heres the follow up on the english couple whose house was demolished in spain, para ir a tome el ayuntamiento!

Posted by camping @ 05:12 AM 0 Comments

Bank charges court test to open

BBC: Bank charges court test to open

Banks and their customers are awaiting the start of a High Court test case which could bring a fundamental change to UK High Street banking. The outcome may decide how much banks can charge millions of account holders who go overdrawn without permission. [Here is hoping that the banks actually lose this case!!!]

Posted by ukuser1 @ 02:17 AM 0 Comments

Facebook Housing Market Crash Group!

Facebook: Facebook Housing Market Crash Group

Even Facebook users are getting on the House Price Crash train!

Posted by ftb_praying! @ 01:44 AM 0 Comments

Sunday, January 13, 2008

Hoo boy!

Washington Post: It's Not 1929, but It's the Biggest Mess Since

It was Charles Mackay, the 19th-century Scottish journalist, who observed that men go mad in herds but only come to their senses one by one. We are only at the beginning of the financial world coming to its senses after the bursting of the biggest credit bubble the world has seen. Everyone seems to acknowledge now that there will be lots of mortgage foreclosures and that house prices will fall nationally for the first time since the Great Depression. Some lenders and hedge funds have failed, while some banks have taken painful write-offs and fired executives. There's even a growing recognition that a recession is over the horizon. But let me assure you, you ain't seen nothing, yet.

Posted by lvmreader @ 10:59 PM 6 Comments

Gold at $1000 on Shanghai Gold Futures Market

GATA: Shanghai exchange seen driving gold far higher

"Shanghai's investors paid a large premium of about $100 an ounce over international gold prices, with the June futures contract hitting an intraday high of Rmb 230.95 a gram, or almost $1,000 an ounce." www.caseyresearch.com comments "This is just one more case of not trusting the paper money systems. A country can control its currency, its interest rate and its inflation, but not all at once. With the dollar crashing, the inflation in China is high. Chinese citizens are increasingly rich, and not stupid. Gold is an exit strategy from the renminbis dollar-linked inflation of 6.9%."

Posted by happyrenterz @ 10:35 PM 4 Comments

The UK's Subprime

FT: Many new mortgages dubbed subprime

"Almost one in five new mortgages written in 2007 was either dubbed subprime by the bank that loaned the funds or was made to a homebuyer who offered no proof of income, according to an industry trade association. The Intermediary Mortgages Lenders Association mortgage brokers that sell almost all the subprime and self-certified loans in the UK said the first category accounted for 8 per cent of loans and the latter a further 10 per cent."

Posted by happyrenterz @ 08:29 PM 3 Comments

It was all Greenspan's fault, really!

Telegraph: Anna Schwartz blames Fed for sub-prime crisis

As rebukes go in the close-knit world of central banking, few hurt as much as the scathing indictment of the US Fed by Anna Schwartz. The high priestess of US monetarism - a revered figure at the Fed - says the central bank is itself the chief cause of the credit bubble, and now seems stunned as the consequences of its own actions engulf the financial system. "The new group at the Fed is not equal to the problem that faces it," she says. Schwartz warns against facile comparisons between today's world and the Gold Standard era. "This is nothing like the Depression. I don't really believe the economy as a whole is going to fall apart. Northern Rock has been the only episode of a bank failure so far," she says. Over 4,000 US banks - a fifth - collapsed in the 1930s.

Posted by lvmreader @ 05:43 PM 16 Comments

Goodbye ClubMed.......It's been emotional

Telegraph: Spain and Italy threaten EMU stability

A top French bank has warned that mounting strains within the eurozone will set off a sharp jump in spreads on Italian, Spanish, Greek, and Portuguese sovereign bonds this year, forcing major changes in government policy across the region. BNP Paribas said a decade of lagging performance across southern Europe has left the region unable to compete with the eurozone's northern tier. A property boom fuelled by low real interest rates has disguised the slippage until now, but only at the cost of storing up greater trouble.

The end of the Euro?

Posted by lvmreader @ 05:39 PM 9 Comments

More coverage of our very own HPC man Jonathan

The Independent on Sunday: Should first-timers rush to buy now the door is half-open?

"first-timers willing to resist temptation will be handsomely rewarded, according to Jonathan Davis a chartered financial planner at Armstrong Davis and a contributor to the website Housepricecrash.co.uk. He predicts that prices will tumble by around 35 per cent over the next five years, kicking off with falls of between 5 and 10 per cent during 2008. "My advice to those thinking about getting on the ladder is simple: don't touch property with a barge pole. A 250,000 home now will be worth 150,000 in as little as four years' time."

Posted by jack c @ 05:28 PM 8 Comments

Again, notice the BBC editor putting the word 'failure' in quotes

BBC "News": Cameron criticises Rock 'failure'

Musn't be seen to criticize their paymasters, and politely refutes all of the arguments given by Cameron. Who needs political enemies when you're up against a co-opted state media channel?

Posted by paul @ 05:18 PM 0 Comments

Crunch - the sound of music?

BBC News: EMI 'set to axe up to 2,000 jobs'

Record label EMI could announce that it is cutting up to 2,000 jobs on Tuesday as part of a radical restructuring plan. The restructuring plans come from EMI's private equity owner Guy Hands, who bought it for 3.2bn last year. The Mail on Sunday says that Mr Hands must cut costs swiftly to pay back the 2bn he borrowed from Citigroup just as the credit crunch began to bite last summer.

Posted by damian @ 05:10 PM 0 Comments

Nice and easy! little by little.

Guardian: UBS warns sub-prime crisis not over

Keep it coming boys, i think it will be a couple of years before they admit all losses

Posted by lee @ 04:56 PM 0 Comments

Was peak oil in 2005

Safe Haven: Peak Oil and Beyond

Matt Simmons (MS): My opinion is that it's increasingly likely that we actually set an all-time record in May 2005 of 74,252,000 barrels per day. And for the first three months of 2007, we're almost a million barrels per day behind that, and we're dropping fast. If that record still holds a year from now, I'll bet someone ten-to-one that we set peak oil in May 2005 and it's now past tense.

Posted by sold 2 rent 1 @ 03:31 PM 8 Comments

After 3 months, David had a sudden e#@[tion in January

DavidSmith: January's shock house price stats

"Even in a weak market, house prices have not lost the capacity to surprise. Nobody expected the Halifax, Britains biggest mortgage lender, to announce a 1.3% rise in house prices for last month. I suspect that even within the bank, there was a certain amount of head-scratching. So, what has really been happening to house prices since the credit crisis broke in August? you would say that November marked the point of maximum gloom, when the full effects of the Northern Rock affair and the credit crunch were felt." HA HHAHAH ... "full" effect... AH HAHHA

Posted by confused76 @ 01:31 PM 4 Comments

London: Kiss the Russian oligarch good bye

Times: Investors bale out of Britain

Foreigners are rich (and now richer thank to the strong euro) but are not stupid. For foreign investors London houses have lost 10% of their "home currency" value in 2007. Expect no more demand from Euroland and the Oil Countries. "SOME of the Citys top professionals are betting that sterling will slide this year, making Britain one of the least attractive world markets in 2008 and throwing up better opportunities overseas."

Posted by confused76 @ 01:21 PM 7 Comments

Buy to letters please carry on 'filling your boots'

Firstrung: Firstrung, first time buyers housing news in focus

Buy to let continued its death throes in the mainsteam media, quite frankly anyone investing in this phenomena requires help and we don't mean of the financial variety. With yields averaging 5% (not allowing for voids and repairs), mortgage costs being on average 8% for BTL and house prices falling, buy to let lender Paragon's pr effort, (as their share price collapsed by nearly half this week), is reminiscent of the kind of denial the Iraqi information minister proclaimed whilst the 'coallition of the willing' began illegally occupying his country in 2003. The injustice miilions of first time buyers have experienced over recent years in the UK pales into comparison when you consider other global issues.Still, back on track, let's hope the buy to let investor continues...............

Posted by converted lurker @ 11:23 AM 0 Comments

Cat amongst pigeons with a 35% correction...

Firstrung: A decade of UK house prices rising leaves Britons sitting on a pot worth 4 trillion and debts of 1.2 trillion

Martin Ellis, Chief Economist at Halifax, commented: "UK home owners have collectively accumulated an extra 2 trillion of equity in their homes over the past decade as property prices have risen. This has significantly strengthened the household balance sheet. Mortgage debt accounts for only 30% of the value of the UK's 4 trillion worth of housing assets."

Posted by converted lurker @ 11:20 AM 5 Comments

Questionable retail figures last month

Telegraph: Is this a slump or an M&S slump?

If the Bank of England had cut rates this month, they would probably have been doing it because M&S strategy failed, not because of a general slowdown. After all, John Lewis figures were up year-on-year in December.

Posted by paul @ 10:26 AM 1 Comments

It's the ''R'' word...stupid!

BBC News: Profit warnings hit six-year high

''Profit warnings by UK listed firms are at their highest level for six years. Research by Ernst & Young shows nearly 400 warnings about disappointing profits were issued in 2007, up by more than 10% on the previous year.''

Posted by hpwatcher @ 10:07 AM 1 Comments

UK Recession imminent

Telegraph: Engine of the British economy begins to slow

"In the last six months, large parts of the economy have been buffeted by the credit crunch. Banks have slowed down their lending, the housing market has turned down and now debt-laden consumers are spending less. However, one factor has - up until now - given cause for comfort and prevented even the gloomiest observers from predicting an outright recession: employment remains high." John Philpott, economist at the Chartered Institute of Personnel and Development, says: "We expect this year to be the worst for job creation in a decade (thats the post crash 90's folks). Employment will continue to rise but not by much." More realism from the Telegraph - we just need Gordon Darling and Brown Nose to stop giving the country bull and do something sensible - like abdicate.

Posted by growler @ 09:53 AM 6 Comments

YEESSSS! Look at the sobering stats though - No more boom & bust eh Gordon?!?

Telegraph: Fall in 'over-inflated' house prices inevitable

House prices in Britain are the most over-inflated in the world and a fall in the value of homes is inevitable, leading economists have warned. The cost of property in this country has risen faster than in any other affluent nation, making it increasingly difficult for first-time buyers and young families to own a home, an international study has found. Property prices in Britain have risen for 13 successive years, and in the past decade the increase has been particularly steep. The price of an average home has risen from 70,000 when Labour came to power in 1997, to nearly 200,000 today. In the same period, the retail price index rose by only 30 per cent. An average home costs 156,000 in America, 149,000 in Germany and 141,000 in New Zealand.

Posted by tyrellcorporation @ 08:58 AM 4 Comments

Rich quick? Build-to-let (not Buy-to-let!!), spread betting, and stock picking... you cant go wrong!! like a walk in the park.... sure!

Times: Give up your job and earn 100,000

"MANY of us dream of giving up the day job and making a living from our investments or hobbies, but with the housing market flat and shares looking choppy, just how easy is it?" mWUA HHAHAHHAHA HAHHAHHAHAHAHHAH HAHAHAHHAH

Posted by confused76 @ 02:17 AM 14 Comments

Banking revival predicted,,,, but only if house prices do not fall!

Herald: Banking shares revival predicted

"SHAREHOLDERS IN the UK's biggest domestic banks can look forward to a 75 billion rise in the value of their investments - just so long as we avoid a house price crash and recession." AHH HAHHAHHH AHHAA HA MUAUA AUUAUAUUAWAAAAHHH HAHHAHAHH

Posted by confused76 @ 02:03 AM 1 Comments

"The days of cheap credit are well and truly over"

Guardian: Is it the end for shopping fever?

" For more than a decade, shoppers have turned out, month after month, to spend their hard-earned cash, driven by the whims of fast fashion and the interior design tips proffered by home makeover programmes. But living costs are now rising faster than any time in the past decade: so whether it's filling the tank, your monthly mortgage payment or a trip to the supermarket, the spare cash we used to burn in Topshop or on the latest album release at HMV is dwindling. 'I think the days of cheap credit are well and truly over, and we're just at the beginning of seeing how scarce credit can actually be,' agrees Karen Ward of HSBC"

Posted by confused76 @ 01:58 AM 7 Comments

It's bonus time at Northern Rock for "excellent operational performance"!

thisislondon.co.uk: Secret bonuses double salaries of Northern Rock staff (while our billions are propping it up)

In a letter to senior staff on December 20, chief executive Andy Kuipers said the bank's board of directors had agreed "an enhanced remuneration package" for employees deemed "essential to our continuing excellent operational performance". He said they will receive a bonus amounting to a quarter of their gross annual salary every three months effectively doubling their pay if they are paid the bonus for a year. Mr Kuipers, who replaced Adam Applegarth as chief executive last month, stressed that the arrangement "will not be offered to the generality of staff and, as such, must remain absolutely confidential to yourself and not be discussed with others. "If you do discuss the existence of this bonus to any third party then you will forfeit your entitlement."

Posted by quiet guy @ 01:47 AM 4 Comments

Bad weekend for Crash Gordon and Captain Darling then

Times: Fate of Rock rescue is in PMs hands

Looks like it's all down to the magnificent two over a bottle of port at chequers then.

Can anyone explain the financial jiggery pokery in plain English!

Posted by enuii @ 12:01 AM 6 Comments

Saturday, January 12, 2008

News for the great unwashed

Daily Star: HOMES IN BRITAIN WORTH 4TRILLION

House prices in Britain shot up 9% last year despite all the dire predictions of doom and gloom. And that means the value of our homes has trebled over the last 10 years, says mortgage lender Halifax. The total value of all the homes in Britain is now an amazing 4 trillion (thats 4million million) which is well over three times 1997's valuation. And the best news of all is that our houses are now worth 3.4 times the level of mortgages still to be repaid, which means that Brits now have a hefty 2.8trillion of wealth in their homes up from just 870bn in 1997.

Posted by little professor @ 10:20 PM 4 Comments

Gold's future

FT: Gold is a bright prospect for the bold

Valuable article looking at the risks to gold this year. Supporting gold are dangers in the Euro zone. Spain is suffering a hpc but can't drop interest rates like USA and UK because it is in the euro. Spain, Portugal and Italy have suffered huge loss in competitiveness because of the euro. Do they leave the Eurozone?

Posted by happyrenterz @ 06:05 PM 1 Comments

Paragon to go into deep freeze

The Daily Telegraph: Paragon launches emergency rights issue

Looks like Paragon to be frozen so it can be thawed out some time in the future when credit conditions improve.

Posted by ash4781 @ 05:06 PM 1 Comments

History repeats itself

Independent: Saudi prince ready to invest $2bn in Citigroup

"In the 1990s, the Prince made an initial investment of $550m to bail out Citi-bank, which had hit trouble due to underperforming American real estate loans. His holdings in Citigroup now comprises half of his wealth, (which is worth about $10bn)".

Posted by alan @ 04:22 PM 1 Comments

anyone want a laugh, mortgage company office for sale..lol

Right move: Partington Lane, Swinton, Manchester 79,950 Commercial Property

I am sure we will see a lot more of these soon...lol

Posted by mark @ 03:15 PM 5 Comments

First step in the governments agenda - take control of the countries banks and building societies

BBC: Treasury lines up new Rock boss

The Treasury has recruited the former boss of Lloyd's insurance market, Ron Sandler, to lead Northern Rock, should the troubled bank be nationalised.

Posted by george monsoon @ 02:36 PM 6 Comments

Another well used line - "we are in it for the long term"

Citywire: Buy-to-let amateurs seek to build long-term assets

Amateur landlords are into buy-to-let for the long term and more than half, some 57%, say they invest in buy-to-let property to build up assets for the future rather than to supplement their monthly income.Given the predictions that property prices will fall, or at best flatline, during 2008, taking a long-term view is as much a necessity as a prudent investment decision.

Posted by jack c @ 02:30 PM 5 Comments

housing stock review

Reuters: Value of Britain's homes hits new record

This has significantly strengthened the household balance sheet; mortgage debt accounts for only 30 percent of the value of the UK's 4 trillion pounds-worth of housing assets. Yeah but witch group will be handing the keys back?

Posted by sosoon @ 12:34 PM 2 Comments

Spectre of negative equity looms for first-timers

The Times: Spectre of negative equity looms for first-timers

One of the readers comments says "Negative equity should be outlawed, as it is in the USA. Has it ever been challenged in court?" I'm not quite sure how this one would work. How do you outlaw prices going down? And who would you challenge in court, the FTB whose refusing to pay your ridiculously overinflated price?

Posted by becky @ 11:44 AM 11 Comments

And a much less overvalued, indebted and more balanced economy than ours!

BBC News: US stocks slump on economy fears

"Investors are worried that major banks are yet to reveal the full impact of their exposure to the housing slowdown." They will not be able to reveal their exposure because the "slowdown" has a few more years to go (at least). No mention of subprime anymore! It's the whole God damn thing.

Posted by cheekie charlie @ 09:31 AM 2 Comments

Encouraging news for home owners...yawn

Express: ITAINS HOUSES ARE NOW WORTH 4TRILLION AS PRICES RISE 9% IN JUST ONE YEAR

''British home owners are sitting on a property goldmine worth 4trillion.'' ''But Martin Ellis, chief economist at Halifax, said: Home owners are building up lots of equity in their properties, which is providing a very good cushion for when the market gets more difficult. Shame when things get more difficult, the homes won't be worth much!!!!!

Posted by hpwatcher @ 06:35 AM 19 Comments

UK is a Nation of Savers? I Say No

Telegraph: Morning Market Comment: Britons do save

"I feel that property should never be included in the inflation index as houses are assets you might as well put the stock market in the CPI. The argument that the UK population is a low saving nation is laughable. We are one of the highest property owning nations in the world." Apparently, there is no need to invest in productive assets or work for a living or ... whatever. Just keep drinking the house price Kool-Aid.

Posted by quiet guy @ 04:26 AM 12 Comments

Friday, January 11, 2008

I'm no chartist...

FT: Gold challenging $900 level

... but take a look at the gold price decide for yourselves where this price is headed once all the automated sales are cleared.

Posted by craig @ 11:46 PM 5 Comments

The USA has sneezed... now comes your cold!

Market Oracle: Deflation Economic Time-bomb As US Moves Towards Recession

"When banks don't lend and consumers don't borrow; the economy crashes. End of story. The whole system is predicated on the prudent use of credit. That system is now in terminal distress. Perhaps the whole inflation-deflation debate is academic. The real issue is the length and severity of the impending recession. That's what we really want to know. And how many people will needlessly suffer".

Posted by alan @ 10:30 PM 7 Comments

J P Morgan strike the Rock with T.B. on-board

BBC: Rock sells off 2.2bn mortgages

Oooh Look, J P Morgan, didn't some one called Tony with initials that stand for a disease get a nice little job with them, how ironic!

Posted by enuii @ 06:10 PM 5 Comments

More Bank of Bail-out assistance DEMANDED

Citywire: Rock's pension trustees demand government protection as 100m deficit emerges

Trustees of the Northern Rock pension scheme have demanded the government offer its members the same level of protection it has afforded to depositors after the scheme fell to a 100 million deficit as a result of the crisis at the bank.

Posted by jack c @ 05:38 PM 8 Comments

Credit crunch is like Pacman, it just crunches up everything in sight...

Economist: Stepping beyond subprime

As fears of an American recession grow, so do worries about a general deterioration of credit. Commercial property looks more precarious by the day, as do car loans, student loans and credit-card debt. All of these were, like residential mortgages, fed into Wall Streets stalled securitisation machine. Many now sit in complex products with the same questionable credit ratings. Banks have to worry about more than just the fancy asset-backed stuff. Losses on unsecuritised loans are rising faster than expected. Investment banks face a slowdown in a number of businesses, from advising on mergers to equity underwriting. Credit derivatives are also in for a shock because defaults are expected to rise sharply, according to Moody's, a rating agency.

Posted by drewster @ 05:13 PM 1 Comments

A crash will help solve the affordable housing crisis

Inside Housing: Associations poised to snap up hard-to-sell homes from private builders

Developers are already offering discounts of up to 15 per cent to housing associations for stock that they are struggling to shift, Inside Housing has learned.

Posted by still-waiting @ 05:00 PM 2 Comments

Paragon went bust during the last crash... history repeats itself

Times: No Paragon

"The rights issue solves one problem, but still leaves another: Paragons exposure to a deteriorating housing market and the danger of a rise in bad debts from buy-to-let borrowers. For that reason, it would be premature to assume that the phoenix of Britains last housing downturn can do it again." The UK housing market is a big government-underwritten fraud. Crooks and gullible people will always exist so I am afraid Paragon's reincarnation will be around during the next boom-bust.

Posted by confused76 @ 04:52 PM 2 Comments

The dreaded ''R'' word......

Times Online: Recession fears as manufacturing drops

It's coming, no doubt about that........''Output in November drops 0.1 per cent, prompting warnings that the manufacturing sector is heading to recession.'' ''Manufacturing succumbed to its second drop in output in three months in November, sparking warnings from City economists that the British industry could slide into a new recession later this year''

Posted by hpwatcher @ 04:15 PM 5 Comments

Almost as stupid as suing macdonalds because they made me fat...

CNN: Cleveland sues lenders over subprime

I didnt have to buy the burgers and eat them for every meal... just like I dont have to get a mortgage I know I cannot ever pay.... CLEVELAND (CNN) -- Likening their actions to those of organized crime syndicates, Cleveland's Mayor is suing 21 major banks and mortgage companies for the roles they played in the sub-prime mortgage crisis that devastated many neighborhoods in the city. The suit, filed in Cuyahoga County Common Pleas Court, alleges that in pushing sub-prime mortgages in Cleveland, the companies created a public nuisance in violation of state law.

Posted by mark @ 03:57 PM 0 Comments

Baltic dry sea freight in biggest drop since '85

Reuters: Baltic dry sea freight in biggest drop since '85

They don't call the Baltic Dry Index the pulse of the world economy for nothing...

Posted by robertpaulson @ 03:35 PM 0 Comments

Police Box for Student Son cost about 92K in 2004

Argus.co.uk: Police box to become des res

A former police box is to be transformed into Brighton's smallest house. [well if they get planning permission approved] The owner, who has chosen to remain anonymous, wants the 18sqm space to become a home for his student son. Average house prices in Brighton and Hove have risen steeply in recent years to 276,895 in December and buyers have been forced to look at more unusual sites, such as garages, for new homes. The planning application is likely to be dealt with on January 23.

Posted by ukuser1 @ 03:02 PM 6 Comments

Soured mortgage investments - they say

New York Times: Giant Write-Down is seen for Merrill

"ML is expected to suffer $15 billion in losses stemming from soured mortgage investments, almost double its original estimate, prompting the firm to raise additional capital from an outside investor. Merrill the nations largest brokerage firm, is expected to disclose the huge write-down when it reports earnings next week, according to people who have been briefed on its plans. The loss far exceeds the $12 billion hit many Wall Street analysts had forecast".

Posted by alan @ 01:50 PM 0 Comments

Countrywide throw in the towel!

Bloomberg: Bank of America to Acquire Countrywide for $4 Billion

"Bank of America Corp., the biggest U.S. bank by market value, agreed to buy Countrywide Financial Corp. for about $4 billion, five months after making a money- losing $2 billion investment in the unprofitable mortgage lender"

Posted by alan @ 01:42 PM 8 Comments

How will Sterlings nose-dive affect House Prices?

Reuters: Sterling extends losses, dips below $1.95

"Sterling extended losses to fall to fresh all-time lows versus the euro and below $1.95 on Friday after weak output data maintained the bearish tone on the UK economy confirming expectations of monetary easing. The euro rose as high as 75.86 pence and the pound fell as low as $1.9485".

Posted by alan @ 01:02 PM 4 Comments

BTL mortgage lender Para-gone dilutes it shares

Paragon seeks lifeline from investors: Reuters

"LONDON (Reuters) - Mortgage lender Paragon (PARA.L: Quote, Profile, Research) is to raise 287 million pounds to keep itself afloat by selling new shares to existing investors at a 90 percent discount, sending its shares plunging. It is the first lender to tap investors for cash as a result of the recent global credit crunch, which has left it unable to arrange financing." If they don't succeed Crash Gordon will be standing ready.

Posted by happyrenterz @ 12:39 PM 2 Comments

House prices stalling outside of London

FT [pdf]: FT house price index released today

House prices in England and Wales increased by just 0.1% in December, the lowest monthly increase since July 2005. On an annual basis, house prices rose by 7.9%. Our national index summary shows the market has been slowing on a monthly and annual basis since August, reinforcing the view that this has been a year of two halves. If we strip London out of the assessment there was no overall monthly increase for England and Wales and the annual rate falls to 5.8%. We expect this downward trend to continue

Posted by little professor @ 11:22 AM 10 Comments

News scoop BoE actually cut rates !!

Scotsman: Borrowers' joy as rates cut for second month in a row

HOMEOWNERS, borrowers and businesses are celebrating today after the Bank of England announced a reduction in interest rates for the second consecutive month. Comments are good too. I'll paste it is a comment before they take it off.

Posted by happyrenterz @ 11:14 AM 35 Comments

UK building sector down the drain

Times: Bovis Homes adds more housing market gloom

Builders' profit warnings were the beginning of the very end in Spain, US and Ireland exactly 12 months ago. Which makes my HPC forecast of -5% by August 2008 and -10% by year end.

Posted by confused76 @ 11:08 AM 3 Comments

Can't be too long before we see a year on year negative figure

Firstrung: UK house prices stall once London house prices are stripped out of data - FT house price index

"House prices in England and Wales increased by just 0.1% in December, the lowest monthly increase since July 2005. On an annual basis, house prices rose by 7.9%, the lowest level since October 2006. As our national index summary indicates, the market has been slowing on a monthly and annual basis since August reinforcing the view that this has been a year of two halves. If we strip London out of the assessment there was no overall monthly increase for England and Wales and the annual rate falls to 5.8%, i.e. over 2 percentage points lower." - Dr Peter Williams, Chairman of Acadametrics

Posted by converted lurker @ 11:06 AM 5 Comments

Irish banks and builders set for worse

MoneyWeek: The Irish stock market is cheap, but its no bargain

Looking for a bargain investment? How about the Irish stock market? It fell 26% in 2007, making it one of last years worst performers, and now sits on a p/e of 9.5, which looks ridiculously cheap. At least, it would look ridiculously cheap if it werent stacked to the hilt with builders. Not to mention banks that would make Northern Rock look like Ebeneezer Scrooge & Co, so lax have they been with their lending criteria. But that generosity is beginning to bite. The economy is slowing, credit is scarce and amateur tycoons bragging about their property fortunes, an integral feature of any swanky Dublin watering hole for several years, have slunk away into the rafters. The housing boom is over. And it could drag the economy with it

Posted by drewster @ 10:30 AM 2 Comments

and the job cuts start... then recession

Times: Rolls-Royce to cut 2,300 white-collar jobs

and they said it would never happen.... the uk seems to be mapping out for a recession.........

Posted by mark @ 10:05 AM 8 Comments

Paragon 90% discounted rights issue leads the demise of the BTL sector

Times: Buy-to-let Paragon resorts to crisis funding

"The troubled buy-to-let specialist raises 287 million through 25-for-one-rights issue as credit squeeze continues. The lender, which has become the first in the UK to resort to a hugely discounted rights issue, is offering shares to investors at a 90% per cent discount to yesterday's closing price of 102p." Yes you read it right 90% PERCENT DISCOUNT. However, shares now are trading at 64p. So, it was Paragon and not BB (yet) the real subject of yesterday's rumors. Good stuff! so we will not be bothered with the boisterous claims of a rosy BTL market by that clown of Nigel Terrington.

Posted by confused76 @ 09:44 AM 7 Comments

Piecemeal break-up?

Reuters: Northern Rock sells assets to repay Bank

"Troubled mortgage bank Northern Rock has sold a 2.2 billion pound portfolio of mortgages to U.S. investment bank JP Morgan and said it would use the cash to repay the Bank of England".

Posted by alan @ 08:35 AM 8 Comments

adios amigos

daily mail: spanish bulldozers

back to britain then i guess? boom boom bang... perchance to dream.

Posted by camping @ 07:22 AM 13 Comments

This guy has got himself mixed up with God...

BBC: Fed boss says 2008 outlook worse

Mr Bernanke said the Fed was prepared to "take substantive additional action as needed to support growth and to provide adequate insurance against downside risks".

Posted by hpwatcher @ 05:32 AM 16 Comments

Merrill Lynch is expected to suffer $15 billion in losses stemming from soured mortgage investments

newyork times: Giant Write-Down Is Seen for Merrill

Merrill Lynch is expected to suffer $15 billion in losses stemming from soured mortgage investments, almost double its original estimate, prompting the firm to raise additional capital from an outside investor

Posted by chris @ 03:21 AM 0 Comments

Telegraph Says the Party is Over

Telegraph: Cheaper money is bad for Britain

Consumer confidence is cooling, but that's good. Too many people have been spending like drunken sailors, inebriated on a cocktail of unsustainable house-price growth and an explosion of readily available, cheap loans.

Posted by quiet guy @ 02:50 AM 9 Comments

A lot more in Sydney and Melbourne are under pressure due to house prices,

news.com.au: Consumer debt is growing much faster in Victoria than in other states and is about to get worse.

"Victorians . . . have been coping, but the last couple of interest rate rises have really pushed people over the edge. "We've never had this volume (of calls) and we are struggling to deal with it. It has been phenomenal."

Posted by chris @ 12:30 AM 0 Comments

Thursday, January 10, 2008

Times admits the market is crashing

Times: Homeowners are acting prudently - if only banks could do the same

Anne Ashworth must have written this piece under the influence. "On Monday this week 120,000 people surfed the Primelocation site. A few may certainly have been looking for a rough valuation of the family home before contacting a divorce lawyer - January 7, dubbed Manic Monday, marked the start of the end of many marriages" "They will not be quite so understanding, however, if they see that Halifax and other banks aggravate the slowdown by failing to pass on the benefit of lower interest rates to existing customers and by being needlessly niggardly with creditworthy new mortgage applicants, including first-time buyers"

Posted by confused76 @ 11:00 PM 5 Comments

When to sell gold

Market Oracle: Central Banks Facing Stagflation - Bullish Gold, Currencies and Crude Oil

"If we stay with decent world growth and inflation, gold and oil continue rising. If we get stagflation, that could be worse, and gold and oil rise more, .... But, even if central banks cut interest rates, we may get a big economic contraction anyway because, so far, Central Bank rate cuts have had virtually zero effect on the spreading credit contraction. If that is the case, we get a severe world economic recession. In such case, gold, commodities and oil likely turn in the other direction. The present price levels will not stay with us. It is going to be important for gold and commodity bulls to discern if a serious recession is about to emerge which stems both inflation and or stagflation causing a big world stock sell off."

Posted by happyrenterz @ 10:46 PM 6 Comments

Whodunnit 2....

Guardian: Anxious times for mortgage banks

There has been a bit of nervousness among the mortgage banks again today. Rumours of someone seeking emergency funding from the Bank of England went round the City once more, and with the Bank's monetary policy committee deciding not to cut interest rates, the sector headed south. Even a continuing fall in the Libor rate did not help matters. Bradford & Bingley seemed to suffer the brunt of the rumours, and shortly before the market closed it denied it had gone to the Bank for funding. Its shares still ended 9p lower at 249p, while Alliance & Leicester lost 30p to 724.5p and HBOS fell 29p to 647p.

Posted by flamepoint23 @ 10:45 PM 0 Comments

A BTL in Nairobi?

BusinessAfrica: Nairobi among Africas lucrative property sites

"The report by Global Property Guide ranked the city seventh on the list of Africas top property investment destination behind Cairo, Johannesburg, Windhoek, Kampala, Dar-es-Salaam and Gaborone. Such ranking has the potential of driving up property value as more investors seek avenues of entry with an eye on the quick returns."Cairo remains the most investment-friendly city in Africa with a gross rental yield of 11.35 per year. GPR described the Egyptian capitals score as having a spectacular, an above average buy-to-let income and an excellent long term investment rating."

Posted by confused76 @ 10:42 PM 2 Comments

Whodunnit?

Reuters: B&B denies market rumours of emergency funding

LONDON (Reuters) - Buy-to-let mortgage bank Bradford & Bingley (BB.L: Quote, Profile, Research) on Thursday "categorically denied" market rumours that it had requested emergency funding from the Bank of England.

Posted by flamepoint23 @ 10:15 PM 1 Comments

Germany's Northern Rock

Spiegel: Saxony State Bank Saved from Possible Collapse by Sale

The much anticipated sale of Landesbank Sachsen went through on Thursday morning. But the state of Saxony is on the hook for 2.75 billion despite promises by the government that tax money was safe.

Posted by lvmreader @ 09:59 PM 2 Comments

How and why can the Fionnuala Earleys get away with it

Urban Dictionary: C.R.S.

The reason is that most people cannot remember what they did even last week.

Posted by lvmreader @ 09:53 PM 2 Comments

Subprime: It wasn't just the Brits and the Yanks - the mighty Germans too

Timesonline: Commerzbank removes three top credit bankers

Wait till the Italians start fessing up. And the Spanish, Greeks, Portuguese and other. Then comes China, Singapore and Japan. Except they have savings

Posted by lvmreader @ 09:52 PM 4 Comments

Flashback: Germany bails out a few banks

BBC News: LBBW says Sachsen deal to proceed

Dec 13 2007

German bank LBBW says it has reached agreement on covering risks faced by sub-prime-hit peer Sachsen LB, clearing the way for a takeover to take place.
The state of Saxony will now provide guarantees worth 2.75bn euros ($4bn; 1.98bn), once the move gets official backing by the regional parliament.

Posted by lvmreader @ 09:50 PM 0 Comments

"We will almost certainly see a negative annual rate of inflation in some parts of the UK in 2008," says Fionnuala

Reuters: Housing market facing tough years ahead

LONDON (Reuters) - House prices will stagnate this year and next and there is a two in three chance that prices fall on an annual basis at some point in 2008, a Reuters poll of property market analysts showed. The survey calls a definitive end to a decade-long housing boom, fuelled on cheap credit, that paused briefly three years ago but is now reeling from a slowing economy, debt loads, and the grip of a global credit crunch.

Posted by jack c @ 09:08 PM 6 Comments

Australian banks' investment in the US mortgage provider was a questionable strategy. "They have plenty of exposure to mortgages. Why would you need to get more exposure to mortgages in another country?" he said.

smh: Investors drive down banks on mortgage exposure

THE four big Australian banks' $1 billion exposure to the ailing US mortgage provider Countrywide Financial weighed on bank stocks yesterday, as the US subprime crisis continued to rattle domestic investors.

Posted by chris @ 07:51 PM 0 Comments

Property cheerleaders can t do the math!

MSN: Where will house prices go in 2008?

"How likely is it that property will fall? The evidence certainly suggests that we are highly unlikely to see the kind of gains experienced since the mid-1990s. According to Nationwide, an average UK property costing 100,000 in the third quarter of 1997 would be worth 303,000 today, effective compounded gains of about 20% a year." The ignorance of these house pundits (and journalists reading from a mortgage lender press release) is astounding: where does the "20% compounded" come from? (Hint: 200% / 10 years) What a turkey!! It is in fact 11.6% compounded return from 1997 to 2007... and if you believe mean reversion you better exit now. MWAUU HAHAHHAH HAHHAHAHHAAH HAHAHAHH

Posted by confused76 @ 06:53 PM 1 Comments

Pity the American Savers

CNN: The Fed to the rescue

Federal Reserve chairman Ben Bernanke said in a speech Thursday that the central bank is prepared to continue lowering interest rates in order to help keep the economy on track.

Posted by quiet guy @ 06:45 PM 5 Comments

Man the bilge pumps

bloomberg: Darling Says Northern Rock Sale May Not Be Possible

Chancellor of the Exchequer Alistair Darling said it might not be possible for companies to finance a rescue of Northern Rock Plc and that shareholders of the bank should have realized that their investment may be worth nothing

Posted by mken @ 04:14 PM 1 Comments

Pound still crumbling - record low seems like a daily event nowadays

Reuters: Pound at record low vs euro on rates view contrast

Sterling fell to a record low versus the euro on Thursday after an on-hold decision from the Bank of England did not alter expectations for rate cuts soon, in contrast to a hawkish message from the European Central Bank. The ice is getting thinner.

Posted by sovietuk @ 03:41 PM 7 Comments

What's in your wallet?

AP - Yahoo: Stocks Open Lower As Capital 1 Profit Warning Stirs Further Credit Concerns

Not a surprise really, as these people would lend to almost anyone. This according to a lady who works for them, whom I had a drink with two nights ago. She even mentioned that they even targeted mentally vulnerable individuals. Sad but true.

Posted by stevie dee @ 03:07 PM 0 Comments

Why Brown's wrong to blame America

MoneyWeek: Gordon Brown shouldn't blame the US for Britain's credit crisis

It's easy to pin the credit crisis on the US as that's where the first signs of trouble appeared. But the UK's economic troubles are mostly of our own - or make that Gordon Brown's - making.

Posted by mary @ 01:26 PM 3 Comments

Shares of major high street retailers fall sharply

Daily telegraph: Marks & Spencer shares plunge after poor sales

M&S, Next, Argos, Debenhams and Woolworths shares fall by between 5 and 10% this morning confirming suspicions that consumer sentiment has turned. Coupled with this morning's decision to keep interest rates at 5.5% it is now only a matter of time before job losses hit the sector.

Posted by chris k @ 12:18 PM 0 Comments

For those who missed it last night

ITV Tonight: Britains biggest house price falls

"After a price boom lasting more than a decade, Britains housing market is heading downwards. The Tonight team reveal the areas of the country seeing the biggest falls and who stands to win or lose from the slowdown." Click on Catch up http://www.itv.com/Watchnow/CatchUp/default.html and then select the Programme Britains biggest house price falls: Tonight Go then Play

Posted by doomwatch @ 12:12 PM 32 Comments

Mortgage holders still suffer even with savage rate cuts

The Times: Dim sum for the rich, crumbs for the poor

Mr King must leave the social engineering to the fiscal policy setters. Gordon Brown must be growing increasingly uncomfortable about Britains widening wealth gap. The question is whether he has the means to do anything about it. The Treasury coffers are empty and the silence on the issue is loud. But if you listen hard enough, can you hear the phrase: Let them eat dim sum!?

Posted by landedgentry @ 12:04 PM 5 Comments

But only for this month.....

times online: Bank of England leaves interest rates on hold

The Bank of England today defied intense pressure to cut interest rates for a second month in a row, risking a chorus of criticism to keep borrowing costs pegged, despite growing fears over a vulnerable economy. Spurning demands from business leaders, and defying apparent hints from the Chancellor that a cut was needed to bolster prospects, the Banks Monetary Policy Committee fulfilled economists predictions and kept base rates on hold at at 5.5 per cent.

Posted by hpwatcher @ 11:54 AM 11 Comments

"There is a two in three chance that prices fall on an annual basis at some point in 2008"

Guardian: British housing market facing tough years ahead

This articale gets some things right: the market was fuelled by cheap credit. ...but it also gets a lot wrong: underpinned by a shortage of supply on a small island. Ed Stansfield, property economist at consultancy Capital Economics, which has no mortgage portfolio to defend, says UK housing is even more overvalued than in the United States, which is now in its deepest housing slump since the 1991 recession. The credit crunch that has caused market rates for interbank lending to soar over recent months and create turmoil in financial markets is only starting to exact a toll, he says, predicting a 5 percent price fall this year and 8 percent next. ...But analysts attach only a 15 percent probability to a U.S.-style market correction in the UK.

Posted by disillusioned @ 11:44 AM 6 Comments

Mervyn holds his nerve

Bank of England: Bank of England maintains bank rate at 5.5%

The Bank of Englands Monetary Policy Committee today voted to maintain the official Bank Rate paid on commercial bank reserves at 5.5%. The minutes of the meeting will be published at 9.30am on Wednesday 23 January. The previous change in Bank Rate was a reduction of 0.25 percentage points to 5.5% on 6 December 2007.

Posted by drewster @ 11:42 AM 20 Comments

Inflation creates the perfect headache for Mervyn King

MoneyWeek: Inflation creates the perfect headache for Mervyn King

Gordon Brown may be piling on the pressure for a rate cut, but the MPC should ignore him. Inflation is on the rampage - and it's mainly down to China.

Posted by mary @ 11:40 AM 2 Comments

Isn't this what got us into this mess in the first place?

BBC News: Rock;s debt may be sold as bonds

Goldman Sachs is endeavouring to convert the taxpayer loans to Northern Rock into bonds for sale to investors, the BBC has learned. But in order to make them sellable, these new Rock bonds would need a triple-A credit rating. Goldman believes one or more of the world's giant commercial reinsurers might take over some or all of the government guarantee. But they [the reinsurers] would charge for taking on the Rock risk from the government; for providing the cherished triple-A rating. Goldman's success or failure in securitising this debt will decide the very future of the Rock.

Posted by drewster @ 11:40 AM 4 Comments

Grim forcasts despite December's 'rise'

The Press Association: Further house price falls forecast

Economists have warned that house prices have further to fall despite a surprise jump in the cost of property during December...Meanwhile, the CML said a total of 80,000 loans were taken out by home-movers during November, 3.1% less than in October, while their value fell to 12.2 billion - the lowest level since April last year. The number of people remortgaging declined even more significantly, dropping by 21% to 73,000, while the total value of the mortgages was the lowest since April 2006 at 9.1 billion, as homeowners sat on their hands in anticipation of further interest rate cuts in the near future. Let's see what happens later today...

Posted by disillusioned @ 11:38 AM 0 Comments

Just where do we get the money to pay for these mortgages?

The great pay divide: Why pole dancers, bishops and RAF pilots earn the SAME salary: Daily Mail

Only loosely related to HP but I thought I'd add it before all the interest rate decision articles flood in. The bit I find fascinating is that with a salary of 46,600 you are in the top 10% of earners! Going on a 4x salary multiple, this means only 10% of the UK population should be able to afford a house costing more than 186,000! "The average British salary is 24,907, but two-thirds of the population still earn under the national average, while fewer than five thousand earn more than a million. And to be in the top ten per cent of earners, you need to be on a salary of just 46,000".

Posted by becky @ 11:28 AM 10 Comments

Aussie banks' debts

sky news: Australian banks have already lost ground on the share market and this news is expected to lead to further declines.

Australia's top four banks are understood to be grappling with a billion dollars worth of debts linked to the sub prime mortgage crisis in the United States.

Posted by chris @ 11:10 AM 1 Comments

Snout in the trough

Reuters: Tony Blair joins JPMorgan as senior advisor

"I look forward to advising them on how they approach the huge political and economic changes that globalisation brings," Blair said in a statement.

Posted by alan @ 09:13 AM 34 Comments

Britain at Particular Risk of the Credit Crunch

The Times: Business Article

Enough said. Who thinks this baby is over?

Posted by orwell @ 08:54 AM 0 Comments

You go, girl!

The Times: Bank should not cut interest rates

The Times comes out with a triple salvo of articles stating that the Bank of England should stand firm and not cut interest rates in response to political pressure. The Times' Shadow MPC has voted 5 to 4 against a cut. Hawks on the panel highlighted the inflationary risks of a continued devaluation of the pound, and one member stated to cut twice in a row would look panicky.

Posted by little professor @ 12:31 AM 12 Comments

Wednesday, January 9, 2008

Watch that space

Firstrung: Florida developers to liquidate new build developments in no reserve auctions

Two top Florida Developers are putting scores of properties on the auction market with no reserve prices and no minimum. The luxury apartments on developments in two of the best locations in Florida will be sold to the highest bidder however low that bid might be...The January sale starts at 11am on January 19th when Stirling Sotheby's International Realty, in association with The British Homes Group, will hold a live Absolute Auction on the premises at Lely Landings in upmarket Naples, on Florida's west coast. Twenty-seven, 3 bedroom elegant coach homes of 1600 sq ft+ are to be auctioned individually. Alternatively they can be bought on a bulk purchase of the entire inventory.

Posted by converted lurker @ 10:59 PM 5 Comments

RICS estimate it could be as many as 1.4mil FTBs priced out

Firstrung: Half a million first time buyers have been unable to get into the market since 2002 - RICS

2008 - A year of two halves for the UK housing market - RICS Market Commentary: We believe there is now a significant amount of potential demand from first-time-buyers (FTB's) waiting to be unlocked which could prove a big support for the market. One reason often cited for the difficultly FTB's have in accessing the housing market is stretched affordability. This is crudely defined as the proportion of FTB's pay which is taken up by mortgage payments. It is interesting to note that while this share has risen over the past decade, it does not track movements in the proportion of housing market activity attributable to FTB's terribly well...

Posted by converted lurker @ 10:57 PM 12 Comments

Uses peak oil analysis to make predictions for 2008

TheOilDrum.com: Peak Oil and the Financial Markets: A Forecast for 2008

Gives some bearish predictions and the following conclusion, all point to INFLATION! "Having a functioning financial system is very important from the point of view of our oil production and distribution system. Oil companies need to be able to pay their workers. They need to be able to borrow money to start new projects. They need be able to make contracts with other companies for necessary services, like hiring drilling rigs. They need to be able to purchase oil from overseas, and to be able to pay for it using transaction methods that are not too disrupted. All of these may be problems, if there are too many bank failures, or other serious issues with the financial system. This has the potential to create a negative feedback mechanism which will further limit oil supply"

Posted by planning4acrash @ 10:38 PM 0 Comments

US mortgage applications soar as rates plunge

reuters: It was the highest level of activity since the first week of December, as the average 30-year fixed mortgage rate dropped by 0.32 percentage point to 5.73 percent,

Applications for U.S. home mortgages jumped to their highest in a month last week as concerns about recession pushed interest rates to their lowest in more than two years, an industry group said on Wednesday.

Posted by chris @ 10:31 PM 0 Comments

Sensible article

FT: Three cheers for falling property prices

Worryingly, UK house prices rose by 1.3 per cent during December, according to the Halifax. There is a real danger the residential property market is on the turn. Improvements in October and November, when prices fell 0.7 per cent and 1.3 per cent, are being reversed. We can only pray that the downward trend will resume this month, fulfilling optimists forecasts of a 10-15 per cent slump in 2008. Hold your nerve, Merv. Keep those interest rates high.

Posted by submedia @ 09:37 PM 10 Comments

Vested Interest Spin

Evening Standard: Property slump? House prices in London just keep going up

Andy Smith of 1st Property Investment Ltd said: "In addition to the established markets, many emerging areas of London will experience capital growth this year, such as regeneration areas in Romford, Woolwich and Barking." Here is a clue to the reality: "This year has started surprisingly well with plenty of new buyers coming into the market and plenty of offers being made, although very few actually agreed."

Posted by alan @ 08:26 PM 9 Comments

Unprecedented: we get to see Judith Heywood the uber-cheerleader

Times: Video: how to interpret the latest property market figures

despite the refreshing festive news, "it is no longer possible to make a quick buck on property". However, I do not know where this cheerleader got the 8% long term average price growth from. that is complete nonsense. "Real" house price appreciation is 2.4%, so I would guess a "nominal" 5%, maybe 5.5%. That means that the "disappointing 2007" was in fact as average as you get.

Posted by confused76 @ 04:48 PM 10 Comments

Gloom and Doom

Reuters: Sterling at record low vs euro as M&S adds to gloom

Sterling slid to a fresh all-time low against the euro and a nine-month trough versus the dollar on Wednesday as a weak earnings report from a major UK retailer fanned expectations of an interest rate cut as soon as Thursday. Dark days ahead. Anybody know any jokes ?

Posted by sovietuk @ 04:39 PM 12 Comments

recession!!!!!

CNN: Goldman Sees Brief US Recession, Trims Rate Forecast To 2.5%

NEW YORK -(Dow Jones)- Recession isn't just a market buzz anymore. It is rearing its ugly head in the U.S. after a six-year hiatus, and will prompt the Federal Reserve to cut rates to 2.50%, according to Goldman Sachs & Co. (GS), the world's most profitable security firm. Goldman's U.S. economic team said in a research note Wednesday that they switched to an "outright recession call" as the housing slump and credit market turmoil spills over into the broader economy, with consumer spending taking a hit. The economists made the call following reports over the past week that showed a spike in the jobless rate, and a tumble in home sales and manufacturing activity.

Posted by mark @ 04:27 PM 4 Comments

A spokesman for the Council of Mortgage Lenders said: 'It's a misconception to see a link between the base rate and the mortgage rates.'

ThisIsMoney: PM tells banks to pass on rate cuts

At least they have been honest this time

Posted by confused76 @ 04:12 PM 6 Comments

Persimmon sales slump (down 14%) but its average house price went up by... hold on tight.... a fantastik 0.7% last year...

Times: Persimmon puts faith in spring growth

Persimmon, the housebuilder, has posted a 14 per cent reduction in forward sales for early 2008, blaming challenging market conditions, but believes that falling interest rates will spur a recovery. AH AHHHH AHHAHAHAH. Persimmon's average selling price, however, increased to 189,558 from 188,129. MWAUUU AHHHAH HAHAHHAH

Posted by confused76 @ 02:47 PM 5 Comments

It dont look that bad after all!?!?!?

Investment tools .com: Real Estate

Not a news article but lots of goodies - charts of US median prices, average prices, and various headlines. Even charts the prices of homes in Gold and shares. Pretty up to date too. Have fun!!! If only we had this kind of data here! By the way the title is meant to be provocative!

Posted by techieman @ 02:03 PM 6 Comments

It's OK peeps, house prices are still going up!

Daily Express: HOUSE PRICES UP 5.2%

BRITAINS struggling housing market received a huge boost yesterday as the countrys biggest mortgage lender announced a rise in property prices. The Halifax bank says its figures for December show that the market grew 5.2 per cent year-on-year dispelling scaremongering predictions that prices will fall this year. I think I might rush out today to buy a flat then..... (sarcasm)

Posted by nopensionnohouse @ 01:26 PM 21 Comments

weak politicians

Whisky & Gun Powder (also bullionVault): Money Flood Pushes Inflation

dated from 27/ but good one - not sure posted before extract: the monetary authorities are racing to issue more money, and economists are clamouring for cuts in interest rates. Theyre caught twixt the devil and the deep blue sea, because although they could address these serious inflationary indicators, doing so risks the revenge of a giant economic threat a rout in the housing market. And that would mean depression. "

Posted by ellipse @ 01:18 PM 0 Comments

Could gold-backed money cut government waste?

MoneyWeek: Gold - the key to slashing government waste

"One of the ways governments compensate for their incompetence is simply to create more money to pay for it (see Northern Rock for example). This would not be possible if we had an asset-backed currency, because you cannot create tangible assets out of nothing. Gold imposes discipline; a discipline that those in power simply do not have."

Posted by mary @ 01:00 PM 5 Comments

Costa del crash

Financial Times: Spain sees credit surge brought to rude halt

Ive been a bank manager for 28 years and I have never lived through a situation as dramatic as this, says the branch manager of a regional savings bank, who asked not to be named. House prices in this town have fallen by 20 per cent, there is no demand, and no mortgage finance. Savings banks have cut off funding. Before the credit crunch, I used to do 12 mortgages a month. Since August, my branch has approved only one new loan.

Posted by cheekie charlie @ 12:48 PM 1 Comments

City can ride property storm

Manchester Evening News: City can ride property storm

If we are to look into the crystal ball, what will happen in Manchester city centre - a property market which did not even exist in 1991 when we saw the last house price slump? Thousands of new homes have been built, and a whole generation of buy-to-let investors have cut their teeth here. In just ten years, a city centre apartment may have increased in value by 300 or 400 per cent, compared with 250 per cent for a suburban home. Is there a bubble ready to burst?

Posted by al @ 12:18 PM 0 Comments

If they cut rates now, there will be a lot of explaining to do

FT: Uncertainty likely to dash hopes for rate cut

"In what was apparently a mistake, Mr Brown also indicated that interest rates were likely to be cut this week."
And if this happens, how will his prior knowledge be challenged? Can this be grounds for alledging compromise of the MPC's independence?

Posted by paul @ 12:05 PM 5 Comments

Getting 'em hooked on credit young

Guardian: 'Fantasy' credit ad cut down to size

"Hot dates won't wait 'til payday," stated a line the direct marketing promotion. "By the time you can afford that sexy new outfit Mr Right (or Mr Right Now!) could be long gone. "That's where we come in. Think of us as your fairy godsister. All you have to do is say three magic words. Direct Plus Account." The advertising regulator has criticised a campaign by a financial services company for encouraging young women to live a glamorous, impulsive lifestyle on credit.

Posted by happyrenterz @ 12:00 PM 11 Comments

Rising inflation and falling interest rates and falling pound? Hello runaway inflation

FT: Unions to demand pay rise of up to 7%

"Recklessness" is the first word that springs to mind.

Posted by paul @ 12:00 PM 12 Comments

Gordo propoganda tonight on ITV ahead of the MCP ?

ITV1: Britain's Biggest House Price Falls: Tonight

Is the spin machine on full reality wash tonight: "Investigation into the current downturn in Britain's housing market, revealing the area of the country worst affected and not just who stands to lose out, but who stands to benefit from the slump"

Posted by doomwatch @ 11:24 AM 11 Comments

It's just a big fat con trick ...

Property Investments: Leaseback with upto 5% guaranteed return for 30 yrs

So you get UP TO 5% return, and no more !!! Just who do they think they are kidding. Even NEGATIVE growth is permitted in the advertising description. And for 30 years. Roll up suckers all !!!

Posted by fahrenheit451 @ 10:45 AM 1 Comments

Why it makes sense to rent, not buy

MoneyWeek: How to survive the credit crunch - sell your house

With mortgage rates rising and credit getting harder to come by, it makes more sense to rent than buy in most parts of the country right now. And for the heavily indebted, sell-to-rent could be the least painful option.

Posted by mary @ 10:31 AM 0 Comments

2.3 million households not paying council tax

Firstrung: Millions of bills going unpaid in the past six months as household budgets stretch to breaking point

Household budgets across the country are being squeezed to breaking point with millions of bills going unpaid in the past six months alone, according to new research by MoneyExpert.com...The independent financial comparison website says as many as 6.9 million bills went unpaid since June last year and warns that many more people's finances could begin to feel the effects as energy prices begin to rise again and credit becomes increasingly hard to come by. The MoneyExpert.com figures show that of all household bills people are most likely to overlook their council tax bill, with a staggering 2.3 million** people - around one in twenty adults - claiming to have paid their council tax late or not at all in the past six months.

Posted by converted lurker @ 10:26 AM 12 Comments

Will interest rates fall below 5% by April?

Firstrung: Barclays Stockbrokers predicts the MPC will cut rates in tomorrows meeting

Henk Potts, Investment Analyst, Barclays Stockbrokers, comments on the forthcoming interest rate announcement: "The pressure has been building and building on the Bank of England to cut interest rates this week. A mixture of a weakening property market, tightening credit conditions and falling business and consumer confidence are all conspiring to force the Monetary Policy Committee to act sooner rather than later. We expect a quarter point cut on Thursday and further quarter point cuts in February and April, taking interest rates back to 4.75%."

Posted by converted lurker @ 10:24 AM 14 Comments

If the private sector won't build more housing, they'll "force" it through !!!

Property Week: Notorious Deepcut barracks to become housing estate

"In a statement today the Ministry of Defence announced the Princess Royal Barracks, where four young soldiers died in separate shooting incidents between 1995 and 2002, will be released for alternative civilian use." Didn't I hear somewhere that the Planners wanted to restrict the overdevelopment of the South East.

Location map: http://maps.google.co.uk/maps?f=q&hl=en&geocode=&time=&date=&ttype=&q=GU16+6RW&ie=UTF8&ll=51.305117,-0.698082&spn=0.009149,0.019956&t=h&z=16&iwloc=addr&om=1

Posted by fahrenheit451 @ 10:19 AM 4 Comments

London crashing

Times: WEF warns UK most exposed to crunch fallout

"Britains reliance on the financial sector as an engine for the economy has left it more exposed than most other leading economies to fallout from money market turmoil and the global credit squeeze, the World Economic Forum said today" also have a look at the falling Pound today

Posted by confused76 @ 10:17 AM 2 Comments

Investors brace for bad bank earnings

CNN: Investors brace for bad bank earnings

NEW YORK (CNNMoney.com) -- Sometimes when it rains, it pours on Wall Street. And next week, forecasters are calling for a flood. Beginning next Monday, Wall Street will most likely find itself drowning in a torrent of dreary earnings news from some of the nation's biggest banks, marking yet another grim milestone for the troubled financial sector.

Posted by mark @ 10:17 AM 1 Comments

BTL gamble

Manchester: Gamble that didn't pay off

"I bought 20 new flats dotted around the city centre, using the technique where you buy at a 15 per cent discount and that discount would pay for the deposit for the mortgage either in the form of a cashback or a gifted deposit,"This meant he had a property portfolio worth 3m having staked only 60,000 or so of his own money." A perfect plan, BUT... "The rentals went down very quickly as so many new builds came on to the market."He sold some, but many of the properties were repossessed and Peers was made bankrupt in April last year. He now works for a company, advising on how to build up a property portfolio "without overstretching yourself" What-a-punk!

Posted by confused76 @ 10:10 AM 7 Comments

Will it go bust? If so what happens?

cnn: Countrywide shares take another hit

Nation's largest mortgage lender tumbles after report alleging 'recreated' letters in customer's bankruptcy procedure and analyst's comments. Earlier in the session, shares bottomed out at $5.76 - their lowest since early 2000 - after speculation the company was planning to file for bankruptcy itself. Countrywide later denied the rumors. What happens when the big boys go bust?

Posted by mark @ 10:02 AM 5 Comments

Mmmm... New Labour meddling in markets - again. Just how independent is the BoE when GB is hinting at rate cuts this week?

Telegraph: Mortgage lenders defying Gordon Brown

Gordon Brown and Alistair Darling have warned mortgage lenders that they will be expected to pass on cuts in interest rates to hard-pressed home owners. The Prime Minister said they had a "duty" to pass on interest rate cuts after it emerged that hundreds of thousands of borrowers are still paying over the odds following last month's base rate reduction.

Posted by tyrellcorporation @ 09:39 AM 9 Comments

Unifying cycle theories part II

contrahour: The Business Cycle And the Future

Following on from yesterdays post, blogger M3 correctly points out that I missed out Armstrong. His 8.6 year Global Business Cycle captures the essence of nature. His predictions have been so good that the CIA demanded the model. Armstrong said no to the CIA and a few months later ended up in prison where he has now been for 8 years on contempt of court.

Posted by sold 2 rent 1 @ 09:19 AM 15 Comments

Looks like we are nearly there!

Times Online: Growth in the labour market hits two-year low as economic conditions bite

''Recession is an ever more likely possibility because of a slowdown in the jobs market, according to a report for the Recruitment and Employment Confederation and KPMG. Last month the recruitment of permanent employees grew at its weakest rate for 4 years and the growth of temporary and contract staff placements was the slowest for nearly two years.''

Posted by hpwatcher @ 09:09 AM 1 Comments

Inflationary threat looms as tide of cheap Chinese goods dries up

The Times: On Line Business Article

Oh my oh my talk about the people here and their sound predictions. And that was miles before the US stats came out. I recall people talking about this about this time last year. Mr. Murdoch! REally! Talk about old news....

Posted by orwell @ 08:56 AM 1 Comments

The most believable piece of journalism for years

The Daily Mash: TO THE PEOPLE, I PRESENT MY VISION

WHEN I was a small boy somewhere in Scotland, I remember meeting a poverty-stricken old man who coughed phlegm and bits all over me. Even though I was just a child, I vowed to do whatever I could to cure that man of his illness, and then destroy him. READ THIS! Its far more informative than the 675 articles that IVMreader posted already today. IVM, what do you do for a living? are there any jobs going at your gaff, it sounds like a job with lots of free time!

Posted by george monsoon @ 08:19 AM 10 Comments

So just how is Gordon B(H) going to build 3million houses?

Reuters: Ability to track risk has shrunk "forever" -Moody's

The complexity of the global financial system and the imbalance of information available to market participants means the ability to track risk has declined "probably forever", Moody's Investors Service said on Monday. "It is extremely unlikely that in today's markets we will ever know on a timely basis where every risk lies," analysts at the ratings agency, led by chief international economist Pierre Cailleteau, wrote in a report. The warning touches on a hot topic in the credit crisis that engulfed markets in 2007. The problems faced by markets, sparked by losses on securities linked to U.S. subprime mortgages, were exacerbated as institutions became increasingly uncertain about which market participants were exposed and how big the losses might be.

Posted by lvmreader @ 04:12 AM 5 Comments

"Yeah well, we did our best, we screwed up, YOU lose"

Naked Capitalism: Risk Exposures Cannot Be Measured Fully

But they still get paid?*!!?**!

This deceptively important Reuters story, "Ability to track risk has shrunk 'forever' -Moody's," which says that financial innovation has created information asymmetries that make it impossible for participants to understand their exposures fully. That position may cynically be seen as a defense of the rating agencies' poor performance, but the implications are much greater than that. The biggest implication is for intermediaries. Moody's is saying that intermediaries cannot know their risk exposures with a high degree of confidence, due to complexity of financial instruments, opacity, and leverage.

Posted by lvmreader @ 04:02 AM 1 Comments

Yeah, Scooby, just what are these pesky things?

Principia Partners: What are Structured Investment Vehicles (SIV) ?

What Are Structured Investment Vehicles (SIV)?

The first SIVs were founded in the mid-1980s as bankruptcy-remote entities and were sponsored by large banks or investment managers for the purpose of generating leveraged returns. They do this by earning the spread (differences in yields) between the longer-dated assets purchased and the short-term liabilities issued. The balance sheet of a structured investment vehicle typically contains assets such as asset-backed securities (ABS) and other high-grade securities.

Posted by lvmreader @ 04:00 AM 2 Comments

Turns out that Warren Buffet is so savvy.....

Naked Capitalism: MBIA, Ambac Tanks Due to Countrywide Bankruptcy Rumors

Ooof, things have gone from bad to ugly. Bloomberg reports that the stocks of mortgage insurers MBIA and Ambac plummeted due to an earnings estimate cut by Morgan Stanley and talk of a Countrywide bankruptcy. It goes without saying that these developments imperil the fundraisings the insurers have been told by the ratings agencies they need to execute to fend off a downgrade. And as has been discussed widely, the implications of a ratings cut are serious, since it would lead to a wave of forced selling of certain types of insured debt. Sovereign wealth fund to the rescue? But if they were really savvy, they'd let the train wreck happen and pick among the pieces afterward. This is like your home insurer AND its insurer both going under

Posted by lvmreader @ 03:58 AM 0 Comments

This is very, very serious: 13 credit notches they fell

FT.com: Steep Victoria downgrade bodes ill for SIVs

The extent of damage in credit markets from recent turmoil was starkly underlined on Tuesday when the credit rating of one of the largest independent structured investment vehicles was slashed by 13 notches. The downgrade of the $6bn Victoria SIV by Standard & Poors takes its rating deep into junk territory, to B minus. Just three months ago it was rated triple-A If any large banks have exposure to the same assets in this beast, we will see not just more writedowns, but collapse of asset values too, leading to even more losses in a vicious cycle

Posted by lvmreader @ 03:54 AM 2 Comments

Whoopsie - thought you were getting a rate cut?

FT.com: CDO issuance to drop 60% in 2008

And they thought that rate cut was for them - the poor beleagured home owners

Global markets for complex credit products look likely to see issuance volumes collapse this year as the effects of the turmoil in debt markets continue to cripple much of the securitisation industry, according to analysts forecasts. Collateralised debt obligations (CDOs), which pool together different kinds of bonds, loans or other debts, are likely to experience the worst contraction, with analysts at Citigroup predicting that global volumes will be down 60 per cent in 2008 against last year.

Posted by lvmreader @ 03:52 AM 0 Comments

As if things weren't bad enough, now no more loans for business

FT.com: Credit squeeze casts shadow over US

How many business models in the last 10 years actually only got started because of the generous credit environment - 50%, 60%, 100%?

Corporate debt issuance in the US has made a lacklustre start to the year, after the slowest December in three years, as the credit squeeze continues to weigh on investor sentiment and market liquidity. So far this month, issuance of investment-grade debt totals $2,500bn, compared with record debt sales of $79,706bn for the whole of January last year, according to Thomson Financial.

Posted by lvmreader @ 03:50 AM 1 Comments

Barcap banker given marching orders

Forbes: Kvalheim Leaves Barclays

Barclays' investment banking arm is losing one of its co-presidents, the company said Tuesday, as the British bank struggles to overcome write-downs related to the collapse of the U.S. subprime mortgage market. Grant Kvalheim is leaving Barclays (nyse: BCS - news - people ) Capital and Co-president Jerry del Missier was named president, the company said. Kvalheim, a 51-year-old banker who joined Barclays Capital from Deutsche Bank (nyse: DB - news - people ) in 2001, will leave Barclays at the end of the current quarter.

Posted by lvmreader @ 03:49 AM 0 Comments

Everybody loved him. Everybody disappeared.

DealBreaker: Layoffs Hitting Merrill Lynch: Fixed Income Blood Bath

The much anticipated new round of layoffs of Merrill Lynch began this morning, according to people familiar with the matter. We hear that Merrill began firing people starting at 7 am on the trading floor. The deepest cuts have been concentrated in FICC. In all, 1,600 positions said to be on the chopping block. Packages suck, says one of those familiar people. Three months pay and a $25,000 bonus from analyst to MD. Of course, Charlie Gasparino has been reporting exactly the 1,600 figure since like last week and yesterday said the cuts would come today. Score another one for Chucky Gees. The cute sounding spokeswoman for Merrill declined to comment and nearly put us to sleep by talking about how "material disclosures" would be made according to regulations about financial disclosure.

Posted by lvmreader @ 03:13 AM 0 Comments

How long until it is our turn?

FT.com: Venezuela launches new currency to stem inflation

How many banks can we bail out due to mortgage losses before we need a new currency?

In an effort to stem record-high inflation, Venezuela launches a new currency on Wednesday the strong bolivar by slicing three zeroes off the bolivar.

While President Hugo Chvezs government is hailing the measure as an anti-inflationary measure that will help stabilise the economy, non-government economists fear the strong bolivar will be anything but strong.

Posted by lvmreader @ 12:05 AM 5 Comments

Tuesday, January 8, 2008

The Party's Over Spain - I hope you enjoy the memories

FT: Spain sees credit surge brought to rude halt

Adios nos amigos, y gracias para todas las pescas

Well, I could be wrong (I often am), but it looks like Spain lived by the credit bubble for the last decade and it will die by the credit bubble. Ominous portents for Ireland, the UK, Italy, France and the Baltic States.

Posted by lvmreader @ 11:52 PM 2 Comments

What we were saying in March 2007

HPC Flashback: March 2007 Archive

I guess we got some things right and many things wrong. But as the old BT advert goes "It's good to talk".

Posted by lvmreader @ 11:25 PM 2 Comments

This could never happen here, thankfully

BBC News: Economic woes fan Hungarian riot fires

The admission by Hungary's Prime Minister that he lied to voters may have sparked the country's worst riots in decades, but the violent street protests have deeper-reaching economic and political roots. Despite greater freedoms, many Hungarians feel they have been marginalised and left behind in a fast-changing nation as a small and powerful elite get richer at their expense. At the same time, Hungary's economy has deteriorated to the point where the government has had to draft a package of emergency austerity measures in the hope of putting its finances back in order. Our Prime Ministers and Chancellors don't lie for starters. :)

Posted by lvmreader @ 11:24 PM 2 Comments

Dorothy? Kansas? Bye-bye?

HPC Flashback: How A US Currency Crisis Can Unfold

I wonder if we will see any more cash machine "failures"

Imagine going to your bank (probably online) and wanting to take out say 50k, say half of your cash, so you can go buy say, Yen. The bank tells you, "you are only allowed to take out 5k per month, it's a new law." This would be same situation for a brokerage account. Sound far fetched???? Argentina did that in about 2002. The Argentine peso collapsed, people wanted to take their pesos and sell for dollars. The Argentine government just told the banks, don't let them pull out their money. Freeze the bank accounts. The peso dropped like a stone and the people with money in the bank... just had to watch... and starve too. There was rioting in the streets of course, for months.

Posted by lvmreader @ 11:15 PM 0 Comments

Darling defeated inflation last month and Gordon want cheaper mortgages for everyone!

Times: Alistair Darling tells banks to pass on lower interest rates as the pressure grows for another cut

Government goes for broke in this one, banks expected to mortgage rates, public sector 3 year pay deals, power companies should bring down prices. Why does this remind me of the 1970's!

Best snippets: Mr Brown hurriedly corrected himself when he appeared to suggest that the Bank of England was about to cut interest rates, and Mr Darling suggested that action on inflation had given the Bank room for manoeuvre to make last months cut and said that there could be room to do more!

Posted by enuii @ 11:13 PM 4 Comments

Countrywide Denies Bankruptcy

Times Online: News Article

Well, we did predict this a long time ago. How much money has been spent holding this baby up I wonder?

Posted by orwell @ 10:37 PM 0 Comments

PLease sir can I have some more

Investment Week: Mott Urges BoE to cut interest rates

"Mott is continuing to back banks, as has been his strategy since the launch of the fund, with a weighting of 18% of the portfolio. He said financials should be a key sector that would benefit from a falling interest rate environment." Just like what is happening in the US - All the financials have bounced right back after the FED slashed rates.

Posted by bystander @ 10:15 PM 0 Comments

The R word is here...

BBC News: Recession in the US 'has arrived'

The feared recession in the US economy has already arrived, according to a report from Merrill Lynch. It said that Friday's employment report, which sent shares tumbling worldwide, confirmed that the US is in the first month of a recession.

Posted by afrobaggie @ 09:35 PM 0 Comments

Travelodge Erects Chinese Pre-Fab Hotel in Uxbridge

Reuters: UK builds recyclable hotel

Well that's more UK builders and tradesmen without a job, expect cash strapped low-budget house-builders to follow suit as the Chinese supply our first pre-fabricated hotel built from pre-finished container like modules complete with bathrooms already installed.

The firm supplying the modules hopes to be able to shortly offer these modules pre-decorated and furnished.

Posted by enuii @ 08:54 PM 4 Comments

House prices suffer biggest quarterly fall in 12 years

Daily Mail: House prices suffer biggest quarterly fall in 12 years

New figures have revealed the biggest quarterly drop in house prices since the second quarter of 1995, although December saw a slight increase in prices. The figures from Halifax, Britain's biggest mortgage lender, said that despite a surprise 1.3 per cent rise in prices last month after three successive months of falls, the overall picture remained one of cooldown. Prices in the final quarter of the year were 0.8 per cent down on the previous quarter. This was the first quarterly drop since the second quarter of 2000.

Posted by e p @ 08:43 PM 2 Comments

Welcome to the buyers' market of 2008

Telegraph: Property market: Don't miss the bumper January rush

Anecdotal evidence from various parts of the country reflecting the reality. If you want to sell, you're going to have to drop the price. Summary: "The surveyors' body RICS predicts a 10 per cent drop in transactions this year, making it harder for sellers to find buyers. Hometrack, a property consultancy, says typical prices across England and Wales fell by 03 per cent in December and the annual property inflation rate was at an 18-month low of just three per cent. Estate agency Cluttons says central London prices dipped by 13 per cent in the three months to December. Meanwhile one of Britain's biggest estate agency chains, Your Move, has just announced the closure of 12 branches with the loss of 315 jobs. All those figures mean the ball is in the buyers"

Posted by growler @ 08:34 PM 1 Comments

US markets declining fast as countrywide may seek bankrupcy protection !

Bloomberg: Countrywide Loses Most Since 1987 on Funding Wagers (Update3)

Countrywide one of the biggest US home loan providers is rumoured to be planning for bankrupcy. Its certainly spooked the US the Dow fallen over 150 points in less than 1 hour. This will not bode well for UK banks its uncertain whether there will be further writedowns credit is tightening up day by day.

Posted by doomberger @ 08:04 PM 0 Comments

Save a few quid now and possibly pay through the nose for it later!

Times: Homeowners turn their backs on fixed rate deals

Apparently demand for fixed rate mortgages is falling as borrowers anticipate further interest rate cuts. Somehow I think this slight drop in the CML's figures is due more to wishful thinking from maxxed borrowers than anything statistically meaningful.

Posted by enuii @ 06:34 PM 2 Comments

Meanwhile, Northern Crocks asset book is sliding in value as house prices keep nosediving

BBC "News": Rock shareholder warns Treasury

A breach of the Human Rights Act?
I didn't know the Human Rights Act protects people making bad investment decisions or protects people's invstements when they hold shares in technically bankrupt companies.

Posted by paul @ 06:32 PM 6 Comments

Never Trust An Estate Agent.

New York Times: Lender Tells Judge It "Recreated" Letters

"The Countrywide Financial Corporation fabricated documents related to the bankruptcy case of a Pennsylvania homeowner, court records show, raising new questions about the business practices of the giant mortgage lender at the center of the subprime mess."

Posted by jackas @ 04:56 PM 0 Comments

We're about 12 months behind the "mess in the US"

Bloomberg: Pending Sales of Existing U.S. Homes Fell in November

The number of Americans signing contracts to buy previously owned homes fell more than forecast in November, signaling f urther deterioration in housing.

Posted by doomwatch @ 04:18 PM 2 Comments

Merryn you are a star!!

ThisIsMoney: How the falling pound will hit house prices

London's estate agents told us over and over again that it didn't matter what happened to the rest of the housing market, prime London prices would never fall. Because of the 'stupid foreigner' theory that it doesn't matter if Londoners can't afford 1m-plus houses, rich foreigners will keep buying them (and keep pushing prices up). Say you are a French hedge fund manager and you bought a three-bedroom mews house in Bayswater last September for 1m. It's final cost to you, including stamp duty and so on, would have been around 1,045,000. Since then, according to Savills, house prices in prime London locations have fallen 2%. So you now have an asset worth 980,000. Not good is it? But it gets worse: the pound has fallen a good 5% against the euro.

Posted by confused76 @ 03:44 PM 6 Comments

IPs and Banks kiss and make up

Investor's Chronicle: Dealing with dodgy debt

A truce has been called between leading lenders and providers of individual voluntary arrangements (IVAs) that should mark an end to the bitter acrimony that plagued Insolvency Practitioners for much of last year Around 1.4m homes face mortgage repayment increases of up to 200 a month when fixed-rate deals taken out two years ago come to an end. A vast majority of people in debt will get by with a bit of time-honoured belt-tightening, but for some it is already too late. So, having taken the pain of the new fee structure, IPs will now be rubbing their hands.

Posted by alan @ 03:18 PM 9 Comments

BTLers come home to roast!

Tgraph: Lenders may not pass on rate cuts, CML warns

Mr Boulger said: "The buy to let market is much quieter". Little by little the VIs are telling the truth

Posted by confused76 @ 03:05 PM 1 Comments

It s company reporting season!

Times: Savills cautious on UK property market

Savills admitted that activity in its UK business had slowed towards the end of the year because of the effects of the credit crunch.On the coming year, Savills is more optimistic about its Asia and European business which "currently appear less affected by the credit squeeze". But, on the UK, it said: "The outlook for our UK and US commercial investment, UK residential and UK mortgage broking businesses will inevitably depend on how quickly confidence returns to financial markets." But why in the world would any one invest in UK property? Stagnant (ahemm...) prices, falling pound... oh I forgot we have the BTLers... they are a special brainless breed of investors

Posted by confused76 @ 02:59 PM 0 Comments

Another reason to sell Pounds

FT: View of the Day: Why the dollar will (eventually) rally

Indeed, alongside the clear UK-specific reasons to be negative on the pound, the currencys strong link to growth was an important factor in our call for further sterling weakness in 2008On the flip side, while currencies like the Swiss franc normally benefit during global slowdowns, the US dollar has statistically been the most likely to rally. PS the pound strengthened today on news that the hpc was delayed in December (http://www.ft.com/cms/s/0/26293fbe-bdd0-11dc-8bc9-0000779fd2ac.html). At least there is is some benefit from the BTL locusts giving me more time to sell all my pounds ;-)

Posted by happyrenterz @ 02:54 PM 0 Comments

Japan 2002 - Britain 2008/'09/'10? Place your bets!

BusinessWeek: 18th March 2002: Japan's Deflation Disaster

"To see what havoc deflation is wreaking on Japan's economy, swing by a model-home complex in the upscale Tokyo suburb of Sakura Jyosui. There, big homebuilders such as Mitsui & Co. and Misawa Homes Co. show off their latest homes, which boast elegant tatami rooms, wine cellars, and saunas. But there aren't many takers these days. This despite the fact that Misawa and rival homebuilder S x L Corp. last year triggered a price war that has crunched prices for a new home by as much as 28%. "Times are awful," says a Mitsui salesman. "And the competition is ferocious." Life is hell for such foot soldiers of the Japanese economy. Why splurge on a big-ticket purchase like a new home now, consumers figure, when it will likely cost less next year?

Posted by drewster @ 02:49 PM 7 Comments

Inflation vs Interest rate cuts

Times Online: Blow to rate cut hopes after central banks sound warning over threat from inflation

The worlds leading central banks yesterday emphasised their vigilance against inflation in the face of soaring food and energy costs, dampening market hopes of aggressive interest rate cuts in response to financial upheavals.

Posted by submedia @ 02:18 PM 5 Comments

London buyers are drying up fast

London evening Standard: Number of home buyers drops to three-year low

The number of buyers looking for new homes in London has hit one of its lowest levels for three years. "The credit crunch has made people take a step back and adopt a more balanced approach. There is now a more healthy balance between buyers and sellers." A straw poll of other estate agents in London showed most now have fewer buyers and sellers on their books than a year ago." Douglas and Gordon has seen a 30 per cent fall in both. Director Ed Mead said he expected the number of buyers to continue falling as people held on for better deals.

Posted by doomwatch @ 01:14 PM 2 Comments

Selfish calls for rate cuts from the British Retail Consortium

MoneyWeek: Why there's far worse to come for retailers

"We realise you cant expect sense from a lobby group but what exactly would a half-point rate cut achieve? Even if it did drive down the cost of credit and kick off consumer spending again (which is doubtful, given how rapidly sentiment has turned and how frightened the banks remain), then all youre doing is stockpiling problems for the future. Obviously retailers dont particularly care about that they just want to squeeze out the last few drops from the good times before the downturn arrives."

Posted by mary @ 12:34 PM 5 Comments

One in five mortgage hunters sign online deal without professional advice

Citywire: More choosing to bypass IFA's and go direct online

An increasing number of homebuyers are researching the mortgage market on the internet and an estimated 20% are prepared to sign up a deal online without advice from a professional. New research conducted by Yorkshire Building Society and yourmortgage.co.uk has revealed that 95% of people looking for a mortgage will use the internet at some stage, with one in five prepared to complete the full mortgage application online.

Posted by webmaster @ 12:12 PM 1 Comments

Unifying Elliott waves, Kondratieff cycles, Spengler cycles and the Mayan calendar.

Gold Eagle: Elliott Wave and the Kondratieff cycle

Please read the section on Kondratieff Long Wave Cycle and Oswald Spengler before moving to comment 1

Posted by sold 2 rent 1 @ 11:39 AM 29 Comments

Gold hard money

FT: Gold is the new global currency

This FT article adds it's 2p worth. "Golds rise shows investors are nervous. That is an important message for central banks contemplating interest rate cuts. The Fed must show it is not prepared to allow inflation to take off. Keynes called gold a barbarous relic. It has life left in it. But it is in the interests of business and consumers that its most bullish fans are proved wrong."

Posted by happyrenterz @ 11:19 AM 20 Comments

That R word again, with a C thrown in

Telegraph: US recession is already here, warns Merrill

The US has entered its first full-blown economic recession in 16 years, according to investment bank Merrill Lynch.

Posted by doomwatch @ 10:52 AM 0 Comments

Warning of crash...

Times online: Writedown warning rocks housebuilders

Big price falls expected:- ''A wave of anxiety passed over the housebuilding sector yesterday after an analyst gave warning that parts of the market would crash and that land values would have to be written down. Alastair Stewart, of Dresdner Kleinwort, said that the slowdown would be more abrupt than he had expected: We now expect [price] falls in the wider new-build sector, not just the blighted new apartments market, where we see the mounting possibility of a headlong crash.

Posted by hpwatcher @ 10:11 AM 0 Comments

The architect of the miracle economy continues to take a pounding

Times Online: Poll wipes the smile off Gordon Brown makeover

Gordon Brown today appointed a spin-meister in the form of former Ofcom chief Stephen Carter. However, it would appear that he requires a miracle of biblical proportion to resurect his rapidly failing image.

Posted by denzil @ 10:09 AM 0 Comments

Latest bounce reported by Halifax provides little cheer

Times Online: UK house price growth 'slowest for a decade'

The latest Halifax stats appear to be genuinely surprisingly but regardless they provide little cheer as growth in the Housing Market is fading fast

Posted by denzil @ 09:59 AM 2 Comments

Outrageous.

BBC News: Public sector pay reform planned

Captain Darling wants to subsidise future rate cuts by pinching pennies from those hard working British citizens who risk their own lives to keep us safe, nurse us through illness, clean our streets etc. But it's ok... because they can rest assured that their below inflation, locked-in pay rises will be 'stable'. More rate cuts on the way then to help the nation's poor destitute land barons.

Posted by jeremy @ 07:54 AM 15 Comments

House prices up 1.3% in December

BBC News: House prices up 1.3% in December

"UK house prices rose for the first time in four months during December, according to the UK's biggest mortgage lender, the Halifax". A dead cat bounce maybe?

Posted by becky @ 07:50 AM 56 Comments

Monday, January 7, 2008

Ssssh, don't tell the customer

BBC: Banks attacked over rates policy

This one is about savings accounts marketing in the UK: "Some providers seem more interested in boosting profit and achieving best buy status than actually offering long term good value". Or in other words "all that glitters is not gold". I'm sure this doesn't apply to mortgage deals....

Posted by growler @ 11:03 PM 0 Comments

Shock & Awe Part 2 - It's Bernanke's helicopters piloted by Bush and Paulson!

Telegraph: Bush convenes Plunge Protection Team

Bears beware. The New Deal of 2008 is in the works. The US Treasury is about to shower households with rebate cheques to head off a full-blown slump, and save the Bush presidency. On Friday, Mr Bush convened the so-called Plunge Protection Team for its first known meeting in the Oval Office. The black arts unit - officially the President's Working Group on Financial Markets - was created after the 1987 crash. Judging by a well-briefed report in the Washington Post, a mood of deep alarm has taken hold in the upper echelons of the administration. "What everyone's looking at is what is the fastest way to get money out there," said a Bush aide.

Posted by tyrellcorporation @ 10:50 PM 7 Comments

Someone is trying out some new toys....

CNN: U.S. F/A-18 fighter jets crash in Persian Gulf

WASHINGTON (CNN) -- Two U.S. Navy F/A-18 Super Hornets -- flying off the aircraft carrier USS Harry S. Truman -- crashed Monday night in the Persian Gulf, U.S. Navy officials said. The aircrafts' three aviators were recovered safely after they ejected from the jets -- a single-seat F/A-18E and two-seat F/A-18F. The U.S. Navy did not immediately know the cause of the F/A-18 crash. There is no indication of hostile fire action, the officials said. The incident is not related to Sunday's confrontation between three U.S. Navy warships and five Iranian boats, Navy officials said

Posted by lvmreader @ 10:13 PM 10 Comments

The "R" word is officially out across the pond

Telegraph: US recession is already here, warns Merrill

The US has entered its first full-blown economic recession in 16 years, according to investment bank Merrill Lynch.Merrill, itself one of Wall Street's biggest casualties of the sub-prime crisis, is the first major bank to declare that a recession in the world's biggest economy is now underway. David Rosenberg, the bank's chief North American economist, argues that a weakening employment picture and declining retail sales signal the economy has tipped into its first month of recession.

Posted by jack c @ 10:06 PM 0 Comments

Price anomaly

Various: Can anyone explain this?

I was looking at sold houses prices near I stay. This house has been on the market for almost 2-3 years. And the asking price was 325,000 then went upto 330,000 and now has been reduced to 299,995. This house has been with www.tremayneandbelcher.co.uk all the way. But the interesting thing has been the land registry price for this and another adjucent house have been registered at a higher price in March 2007 at 320,000. I don't think these houses got sold. http://www.mouseprice.com/Search_Results.aspx?Search=S&id=HomeCo&PostCode=NN11+4TG Can someone explain how this is possible? How can land registry price rise even though no physical sale took place. Could it be just re mortgaging?

Posted by deepak @ 09:48 PM 6 Comments

BBC - Buy in Bulgaria

BBC News: Bulgaria tops house price league

As the US housing market hit the buffers and most of Europe slowed, Bulgaria topped the table for house price growth in 2007.

Posted by ash4781 @ 08:27 PM 5 Comments

Elliot wave number 5 for Kondratieff and Spengler

financial sense: Cycles of History, Boom and Bust

Even if Elliott Wave Theory is mistaken and unscientific, the cycle of boom and bust is real enough. It is not pessimistic to say that the United States will eventually experience another Great Depression. It is realistic to make such a statement. But are we currently approaching the decisive psychological turning-point between optimism and pessimism? If it doesnt come at the end of 2007 it will come, nonetheless, in 2008 or 2009. The world economy cannot expand indefinitely. There will be another Great Depression. And this revelation has military-political significance for Americans. It has national-survival significance.

Posted by sold 2 rent 1 @ 06:18 PM 7 Comments

Sheeple raising cash on a mortgage to pay a government tax !

Moneymarketing: Property buyers don't know how to raise stamp duty, says Stroud & Swindon

Forty-two per cent of those planning to buy a property have no idea how they will raise the cash for the stamp duty land tax, according to research by Stroud & Swindon. A quarter of respondents plan to add the tax onto their mortgage and the same proportion plan to use their savings, though this varies between the sexes.A third of men say they will to use their savings, compared to one fifth of women and 29 per cent of women plan to add the stamp duty onto their mortgage, compared to 18 per cent of men.More than half of over 55s admitted they did not know how they would pay their stamp duty bill with their next property purchase.

Posted by jack c @ 04:42 PM 25 Comments

Losses far worse than reported?

Times oline: Citigroup poised to axe up to 32,000 jobs

What these people do is far more important than what they say..... ''Citigroup, the world's largest financial services group, is believed to be planning to axe up to 10 per cent of its workforce in a bid to stem rising losses. The bank is expected to make an announcement about the job cuts which could see as many as 32,000 people made redundant when it unveils its full year figures on January 15''

Posted by hpwatcher @ 04:36 PM 2 Comments

Where could you invest in 2008 (hint - not Britain)

MoneyWeek: The outlook for global markets in 2008

These are uncertain times for markets, but which are looking the shakiest? For those of you looking to put something away this year, MoneyWeek presents a summary of perspectives on global markets for 2008.

Posted by mary @ 04:19 PM 1 Comments

It just gets worse

FT: Spectre of US slowdown haunts tech fair

The prospect of a consumer spending slowdown in the important US market clouded the upbeat mood Sunday at the start of the global consumer electronics industrys biggest annual jamboree in Las Vegas. At the same time, sharply falling prices for some consumer gadgets this year, and slow development of the digital services needed to stimulate demand for more devices, are forecast to cause parts of the US market to shrink compared with 2007.

Posted by lvmreader @ 04:14 PM 0 Comments

It's like deja-vu all over again!

FT: Xerox warns companies cutting IT spending

It is like 2001 - 2002 all over again. I remember how IT contractors and management consultants all waited for the inevitable rebound that never came. Consultants at all the top strategic consultants (BAH, Bain, BCG, McKinsey, Mercer, Marakon) were either laid off or put on "20% Sabbaticals". This meant that they were put on 20% of their original salary and given a 1 year's mandatory holiday with a promise to be rehired back when conditions improved, provided they didn't take another job with another firm. Many went off to places like India (Goa, Kerala etc) to live cheaply while attempting to rent out or sell their apartments. No doubt, some turned to a different form of prostitution to make ends meet.

Posted by lvmreader @ 04:14 PM 5 Comments

Commercial real estate takes a pounding

Bloomberg: U.K. Real Estate Losses May Be Biggest in 25 Years

Suspension of commercial RE fund redemptions, fund stock prices trading at deep discount to NAV's, read on....

Posted by mrminsky @ 03:48 PM 2 Comments

Well this is like pouring gasoline on the forest fire

CreditFlux: S&P puts 149 tranches of cash flow and hybrid CDOs on downgrade watch

Standard & Poor's put on watch for possible downgrade ratings on 149 tranches of US cash flow and hybrid CDOs, totaling $6.42 billion. The tranches are from CDOs of ABS collateralized by structured finance securities, as well as US RMBS backed by closed-end and second-lien collateral. According to Dow Jones, 28 of the tranches in today's action are high grade structured finance CDOs of ABS, collateralized at origination primarily by AAA, AA and up to 30% A rated tranches of RMBS and other structured finance securities. The rest are mezzanine structured finance CDOs of ABS, collateralized by A and BBB rated tranches of RMBS and other structured finance securities.

Posted by lvmreader @ 03:31 PM 0 Comments

Oh, it's only just beginning

CreditFlux: Australian council threatens legal action against Lehman

Australia's Wingecarribee Shire Council, a local government body in New South Wales, has announced that it plans to sell its AUD3 million ($2.6 million) investment in Federation CDO, a synthetic CDO backed by ABS. It also says it will pursue various legal remedies against the deal's arranger, Lehman Brothers Australia (previously Grange Securities), which it accuses of misleading and deceptive conduct.

There are perhaps 18,000 other councils who will follow suit

Posted by lvmreader @ 03:18 PM 2 Comments

Pop! goes the weasel. - Agghhh

Times Online: Interest rates likely to be kept on hold

Half a pound of tuppenny rice, Half a pound of treacle. Thats the way the money goes, Pop! goes the weasel.

Posted by fahrenheit451 @ 02:33 PM 0 Comments

Mortgage Fraud? That is why I cannot get on the housing ladder

mortgage strategy: FSA bans broker for false application

This is just the tip of the iceberg. The FSA have banned a mortgage broker for 22 false mortgage applications. If they start looking into all the self cert mortgages they will uncover more fraudulent mortgage applications.

Posted by moley20 @ 01:59 PM 6 Comments

Trying to predict the future

Gold Eagle: LOOKING DOWN THE ROAD

Looking down the road is always a good idea if you want to know where you are going and avoid any problems. And you can look in a rear view mirror to see where you have come from and, more importantly, what dangers may lurk behind you. Trying to look down the road for direction in markets is of course different then driving a car. But many analysts try, including me, because being able to anticipate or analyse dangers that may lie ahead is important for everyone's financial health.

Posted by sold 2 rent 1 @ 01:29 PM 9 Comments

Toast

Firstrung: Financial services industry witnesses activity shrink at fastest rate since 1991

This is the CBI press release in full and direct from the horses' mouth. The credit crunch implosion is now being felt by consumers and perhaps what is more important it's being logged and recorded. Unless various data compilers skew the data with a gun at their heads in order to keep the muddled classes shopping themselves to oblivion with borrowed money then there is quite simply no way out...

Posted by converted lurker @ 12:32 PM 0 Comments

Rate Cut Imminent

Independent: Is Britains economy heading for a perfect storm

The VI's are pulling all the tricks to put huge pressure on the MPC before this Thursday's meeting. With REALinflation, not the manufactured CPI running at well above the 2.1% rate set by the MPC what can we expect - well a rate cut ofcourse to try to save the faltering economy from the 'Perfect Storm'. Hopefully Darling can get those naughty people at NPower to reasses their price hike before Thursday too.

Posted by bystander @ 11:57 AM 5 Comments

The feel good spin doctors, just scraped the bottom of the barrel

BBC: Britons 'richer than Americans'

The average UK person will this year have a greater income than their US counterpart for the first time since the 19th Century, figures suggest

Posted by george monsoon @ 10:52 AM 19 Comments

Piggies monthly squeel for cuts

BBC News: Credit woes 'hit finance firms'

Business levels at UK financial services firms fell at their fastest rate in almost 17 years during the last three months of 2007, says the CBI. Guess what they want?

Posted by tick tock @ 10:39 AM 0 Comments

The buck passing has already begun

MoneyWeek: How Britain's 10-year boom is turning into Brown's bust

"I imagine well see a lot of finger-pointing this year the Bank of England has already taken the flack for Northern Rock. Now poor Americans, careless bankers and bloated City fat cats will be blamed for starting the credit crunch, and Britain will be told that its up to Big Gordon to clean up the mess. Its a classic attempt to erase history and start with a clean page Stalin himself would be proud. But Mr Brown wont be able to find a clean page that easily hes spilled far too much red ink for that"

Posted by mary @ 10:38 AM 5 Comments

Peak Food

Safe Haven: Global Food Crisis -- Credit Crunch Could Pale in Comparison

Soaring world grain prices will keep driving food price inflation in 2008 as China and India carve out a bigger place at the table and a new dinner guest -- biofuels -- threatens to become the biggest glutton of all.

Posted by sold 2 rent 1 @ 10:37 AM 0 Comments

Darling worried as to how he's going fudge inflation figures now

BBC News: Darling 'seeks energy cost talks'

Chancellor Alistair Darling has asked to meet with energy regulator Ofgem to discuss last week's gas and electricity price rises by Npower, a report says.

Posted by sara @ 09:31 AM 13 Comments

''few wanted lower rates, given the dangers of rising inflation'' so why do it?

telegraph: Interest rates have been hijacked by politics

The Bank of England faces another tough decision on Thursday. Having cut interest rates to 5.5 per cent in December, the Monetary Policy Committee is this month expected to keep borrowing costs on hold. In last week's Reuters survey, 51 of 63 "leading economists" said the MPC should wait until February, or even longer, before lowering rates again. Economists can be fickle, though, coming under all kinds of pressure to fit their predictions to their paymasters' views. The weekend before the December rate cut, like now, various economists' polls showed that few wanted lower rates, given the dangers of rising inflation.

Posted by hpwatcher @ 09:21 AM 2 Comments

Fibonacci Summation Series in nature

My Broker: THE METAPHYSICAL NATURE OF PRICE MOVEMENTS

Not directly related to HPC but cosmic food for thought.
Price (stocks, commodities etc) is the end result of all economic and psychological pressures and by examining the patterns of price movements, insights into the hidden forces can be explored. In the following, special attention is paid to the examination of these forces through the graphic presentation of price movements in the market as revealed through the Fibonacci Summation Series, the Dow Theory and the Elliott Wave Theory.

Posted by sold 2 rent 1 @ 09:03 AM 13 Comments

Get gold now

The Telegraph: Bush can buy time as property bubble bursts

Not even a Bush New Deal can hold back the post-bubble tide that is drawing in across the globe. What it can do is buy time. Fortunately for America - and the world - the US budget deficit is a healthy 1.2pc of GDP ($163bn). Washington has the wherewithal to fund a fiscal blitz.

Britain has no such luxury. Our deficit is 3pc of GDP at the top of the cycle. Gordon Brown has shut the Keynesian door.

Posted by sold 2 rent 1 @ 08:36 AM 2 Comments

BoE rate cuts helping borrowers? I would not "bank" on that!

Tgraph: Cost of home loan highest in seven years

"The cost of the typical home loan has soared to a seven-year high with families facing mortgage bills more than 20 per cent higher than two years ago as the effects of the credit crunch take their toll." "policymakers at the Bank of England are having less and less influence on what rates home owners actually pay."Most lenders have failed to cut their fixed rate deals - taken out by two-thirds of new borrowers - since the last Bank of England cut in the base rate." But the Pound accrues heavy drops every quarter-point rate cut!

Posted by confused76 @ 08:19 AM 2 Comments

Capitaland in trouble?

Forbes / Thomson Financial News: Singapore's CapitaLand, units request trading suspension pending announcement

I spend a fair amount of time in Asia and Capitaland are amongst the big dogs of Mall builders. I have seen them in every big Asian capital I have been to. Dec 20, 2007 21, 2007 (China Knowledge) CapitaLand Retail Limited, a wholly-owned subsidiary of Singapore CapitaLand Ltd, has bought 50% stakes in a Shanghai shopping ...

Posted by lvmreader @ 03:59 AM 0 Comments

Don't shoot the messenger

Telegraph: Newspapers cannot talk UK into recession

By Edmund Conway. "They say you can tell we're in a recession by counting the number of times the papers use that r-word. We can exclusively reveal that in the past three months, the r-word was used in almost 2,000 broadsheet articles in the UK, compared with just 850 times in the previous quarter. Am I really putting the entire economy at risk by talking us into a recession? No. If the economy really was as vulnerable to warnings from the press about the coming economic apocalypse, house prices would have started plummeting years ago, when newspaper columnists first started predicting their demise. Instead, they boomed on for much longer than anyone expected, and are only now starting to fall. Britain now faces its biggest recession risk since the dotcom crash."

Posted by drewster @ 03:00 AM 0 Comments

Save us, Merv!

Daily Express: PRESSURE PILES ON BANK TO CUT RATES FOR HOME OWNERS

Home owners were offered a glimmer of hope yesterday. Economists and financial experts called on the Bank of England governor Mervyn King to cut interest rates this week in a bid to head off a recession. As credit problems and stagnating house prices continued to take their toll on the economy, experts warned that only a dramatic cut in interest rates could relieve the pressure on millions of home owners.

Posted by little professor @ 01:14 AM 7 Comments

Borrowers are being mercilessly squeezed

Telegraph: Cost of home loan highest in seven years

On Sunday, in his first interview since the Christmas break, Mr Brown said it would be a "very big year" for the country as the effects of the credit crunch became apparent. "There is less money around for people to borrow and at higher rates," he said. Accountants predict a record number of bankruptcies and insolvencies.

Posted by quiet guy @ 01:14 AM 2 Comments

Anyone still doubting about the crash?

Times: Clergy told to counsel on life and debt crisis

"The Church has disclosed to The Times that it is to offer guidance to all its clergy on giving debt advice from the pulpit and within community groups. It is also providing a ten-point debt checklist to help people to work out if they need assistance before it is too late. The Churchs intervention comes as pressure intensifies on the Bank of England to make an immediate cut in interest rates in the face of an abrupt souring of confidence among business leaders and financiers." I would normally blast in a big laughter. but this is too serious and grotesque to be ridiculed. The Times is despicable in connecting the issue of debt advice with yet another pledge for the MPC. Shame on these journalists, paid servants of vested interests

Posted by confused76 @ 12:07 AM 1 Comments

Historical Archive of The Times at last 88 - 92 HPC - MIRROR IMAGE OF TODAYS NEWS ??

The Times, The Sunday Times: Several

Check it for yourself and decide.........

Posted by tim w @ 12:07 AM 1 Comments

Sunday, January 6, 2008

London housing market is dead in the water

Times: The rise and fall for private equity deals

"The volume of British buyouts tumbled 80 per cent in the fourth quarter, as the squeeze on global credit led to the quietest three months in nearly five years, data published today shows. The value of private equity buyouts plunged to 2.9 billion from 15.4 billion in the third quarter as high-profile deals, such as a proposed acquisition of J Sainsbury, were shelved in the wake of the credit crisis." there was not even one secondary deal in the fourth quarter." Add to that that retail profit warnings will flock in this week, I think we can safely call the crash in London.

Posted by confused76 @ 11:19 PM 0 Comments

How can you talk yourself into a recession? Come on guys, let's all 'talk down' oil and gas prices

Firstrung: Let's not talk ourselves into recession

With many commentators publishing housing and mortgage market predictions for 2008, the overall tone has been negative and the Intermediary Mortgage Lenders Association (IMLA) believes there is a real danger of this feeding a spiral of worsening sentiment...Although the latest Bank of England Credit Conditions survey gives a relatively downbeat picture, there are some positive features.

Posted by converted lurker @ 09:31 PM 1 Comments

As Unsound as a Pound?

Telegraph: Interest rates have been hijacked by politics

Good article summing up all that we already know, backed up by a fantastic graph with old money/economy pictorial background and scathing readers comments.

Is comment 3 Andrew Marr getting his own back on Gordon????

Posted by enuii @ 09:20 PM 4 Comments

The Oil- Money-Food Network Failure

The Oil Drum: The Failure of Networked Systems

Sit back and enjoy the (fairly long) read ! "The ability to measure and monitor the system gives us the capacity to avoid small avalanches in individual areas. However, if we keep adding load without adding capacity we overload the entire network and thus make an all-encompassing avalanche inevitable."

Posted by happyrenterz @ 09:17 PM 1 Comments

Gordon Brown today urged voters to judge him on his performance during 2008 as he warned it was going to be a

Telegraph: Brown warns of 'dangerous' year for economy

his first television interview since returning from the Christmas break, the Prime Minister said that 2008 was going to be a "decisive year for the economy" and his political future rested on whether Britain was prepared for the challenges which lie ahead.

Posted by chris @ 09:13 PM 4 Comments

More data to strengthen the HPC stance

Citywire: Sunday Papers: GE may quit UK store card market + other news

General Electric is considering abandoning the UKs 2.5 billion store card market, where its the No. 1 player, the Mail on Sunday reports, quoting unidentified senior bankers; GE currently handles the store cards of such retailers as Debenhams, House of Fraser, Topshop and Dorothy Perkins.

Posted by jack c @ 08:37 PM 7 Comments

The perfect word to describe the situation perfectly

BBC News: 'Subprime' is word of year 2007

"Subprime" has been voted word of the year for 2007 by linguists of the American Dialect Society. Marvellous!! The VIs are really gonna' love this one! As for the "Perfect Situation", look no further than: http://news.independent.co.uk/business/news/article3223673.ece

Posted by h_bear @ 08:22 PM 1 Comments

Fundamental reasons why gold is rising. Includes graph dating back 600 years.

Telegraph: Flight to gold as investors lose faith in money

In 1981, gold established a "safe-haven" level of $1,500 in today's money. By this benchmark, last week's jump to $869 looks tame. A small army of investors [I think they mean us!] is betting that governments will opt for the easy path of reflation to postpone the day of reckoning. The little guys are buying defiantly, at last able to invest in gold through exchange trade funds (ETFs) on the main bourses. China does not report data. Vladimir Putin has told Russia's central bank to buy gold. We know that those Asian and oil states now holding most of the world's $6.6 trillion [dollar] reserves possess very little gold, yet most have an historical affinity for it. Draw your own conclusion.

Posted by drewster @ 07:37 PM 12 Comments

Bombay or Boombay?

Timesonline: Luxury living rises from the slums

Is it smart to be so conspicuously rich amongst such poverty. Europe is littered with the detritus of "royalty" that got carried away. When people are starving and they see the large house on the hill, they don't care how you made your money, they just want to take it from you / deprive you of it. You may as well be in prison and living in fear if you are the only rich person around.

Posted by lvmreader @ 07:15 PM 3 Comments

Totally out of tune with the Times' economy cheerleaderes, Merryn is not afraid to speak the truth... 2008 is going to be a doo doo year for the UK

Merryn in the Times: Your pound in a pickle

"Even as our currency was rising against the dollar it was falling against pretty much every other currency. And the UK economy, just like the US economy, is in a pickle." "The commercial property market is in mid-collapse with prices down 9% last year and deals falling apart all over the place, and the residential-property market is close to finding itself in a similar condition according to estate agent Savills, even prime London prices fell 2% in the last three months of 2007." what a contrast with DavidSmith's prose...stop please stop, my sides are aching...

Posted by confused76 @ 03:33 PM 4 Comments

Lies over CPI will lead to strikes...

BBC News: Brown warns MPs over pay increase

Interview to day with Andrew Marr:- ''Gordon Brown has urged MPs to limit their pay rises to keep them in line with those of public sector workers like nurses and police. The decision on MPs' pay will be made by the House of Commons, but Mr Brown said increases must stay below 2%.''

Posted by hpwatcher @ 12:25 PM 18 Comments

DEFCON 2 reached

Firstrung: Firstrung, first time buyers, the week in focus

Firstrung are concerned that the mainstream media are hasitly predicting the re-emergence of the 'lesser spotted' first time buyer. FTB house prices increased by an average 19K in 2007, prices for FTBs were for the most part too expensive in 2004. Therefore it's way too early to confirm the 're-birth' of the FTB, unless the mainstream media is predicting a 35% crash...er..well they'll get back to you on that one, after they've checked with the Director of advertising sales and the housing supplement section editors...

Posted by converted lurker @ 12:19 PM 2 Comments

David Smith is covering all bases (just in case he was wrong)

DavidSmith: Home Economics 2008

"The most useful tool for a forecaster can be a simple ruler. Put one on the house-price falls announced by Halifax and Nationwide in recent months and you get a 5%-10% drop for 2008. This has become the no-brainer forecast." David, I am a no-brainer person, I am happy with that forecast.

Posted by confused76 @ 10:49 AM 4 Comments

House prices will rise, sterling will strengthen, all is fine in cookoo-land

DavidSmith: Fear of falling governs outlook

"My prediction for house prices remains one of stagnation broadly flat." "As for sterling, its fall in recent weeks has been the product of several factors. It was caught in the dollar-euro crossfire and hurt by the damage to the Bank and Treasurys reputations as a result of Northern Rock, together with the governments wider difficulties. The apparent willingness of the Bank to cut rates aggressively has contributed, as has the perception that Britain is heading for US-style economic and housing weakness. There are the twin deficits; poor public finances and a horrendous, 20 billion current-account deficit in the third quarter. But sterling is only a little below its average" What a spinmaster!! GBP lost 12% to the EUR since February!! "Dollar-euro cross fire"... what a bs!!

Posted by confused76 @ 10:33 AM 15 Comments

Home-buyers bribed to buy overpriced homes

Independent.ie: Developers mask 15pc house price fall with 'incentives'

A report out this Tuesday by real estate giants CB Richard Ellis says that a 15 per cent drop in the value of new homes has been disguised through "incentives" offered by developers to prospective buyers to encourage them to buy properties.

Posted by su @ 09:27 AM 9 Comments

First savers now poor shareholders take a hit

Yahoo USA Biz: Investors May See Dividends Disappear

With credit markets continuing their downward spiral, investors could see their dividends disappearing in 2008.

Posted by acetip @ 07:48 AM 1 Comments

Excuses, Excuses - Its all America's fault

Guardian: Interview: Gordon Brown (part1)

To give you a flavour... Q: It looks like Britain is facing the bleakest economic outlook in ten years. Is this your biggest challenge as you deal with real public disquiet over economic issues? A: This is one of the most difficult years for the world economy. No prizes there then.....

Posted by matt_the_hat @ 06:17 AM 2 Comments

The retail bellwether is ringin'

The Times: M&S reveals Christmas blues

The plunge at one of Britains biggest and best-known retailers will confirm City fears about the extent of the deterioration in market conditions since the start of the credit crunch. M&S will caution that higher mortgage payments and household bills have combined with nervousness about the economy to dampen confidence and make trading conditions tough.

Posted by matt_the_hat @ 06:04 AM 4 Comments

Taxpayer Shareholders Will Take a Hit

Telegraph: Housing crash threat to Northern Rock sale

Fears about the housing market have now replaced concerns about the cost of funding as the single largest obstacle to a deal.

Posted by quiet guy @ 01:14 AM 12 Comments

Finding Your Way Through a World of Pain

The Independent: Banks move to head off repossessions

Banks are set to contact thousands of at-risk borrowers under plans to stave off fears of a huge rise in the number of home repossessions.

Posted by quiet guy @ 01:07 AM 9 Comments

Saturday, January 5, 2008

Trade press acknowledges that London rentals are falling

LondonLettings: Landlords may need to lower expectations

There are two articles by the same cheerleader, that - despite the headlines claiming otherwise - say: "The prime rentals market is changing. Monthly rents are declining month-on-month by 0.2 per cent and average annual price growth fell to just 2.7 per cent in November, down from a peak 11.7 per cent in August 2007, according to Primelocations price index summary." Good luck BTLosers!! Rental values have slowed over the last few months as the supply of available property to rent builds to record levels. However, the market is anticipating an injection of demand over the coming months, as potential buyers wait for prices to fall further in the sales market, meanwhile renting temporarily. This may yet arrest the decline in rental values currently being witnessed. BTL screwed in any case

Posted by confused76 @ 04:54 PM 5 Comments

House prices will rise for ever, says Halifax

FT: South-east and Scotland forecast to buck slowing prices trend

Chief price pumper at the Halifax says places with below average prices could see double-digit growth this year. Since there is always somewhere with below average prices, it follows prices will always rise. Onwards and upwards. Martin Ellis, you're a genie' s@rse, with a salary to match no doubt.

Posted by letthemfall @ 03:30 PM 5 Comments

Estate agent sets up investment fund to benefit form falling house prices....

Homemove.co.uk: Innovative investment fund from Strutt & Parker

YES you are reading this right, an estate agent in the uk is setting up a derivate based investment fund to benefit from falling house prices... so the last few people out there ( estate agents ) who are still talking the market up are now hedging against the market... so the question now is how bad is it going to be????

Posted by axxo @ 03:08 PM 1 Comments

Can you believe this - Fortnightly auctions will continue for as long as necessary, the Fed has said.

BBC: Fed ups credit auction offering

The US Federal Reserve has increased the amount of money available to banks as it seeks to help financial markets hit by the global lending squeeze. It said that banks could bid for $60bn worth of credit this month, instead of the $40bn it had earlier promised. So how long will it take before the Banks trust oneanother enough to begin lending each other money?

Posted by jack c @ 02:39 PM 9 Comments

Shut up, will you?

Mirror: You're talking us into a recession

Gloomy pundits are in danger of talking the country into a recession, senior Labour figures have warned. Ministers say the fundamentals of the economy are sound, with inflation low, employment high and interest rates coming down. But they believe commentators' repeated warnings of a recession may scare consumers so much they stop spending - bringing about the downturn everyone fears.

Posted by little professor @ 12:18 PM 29 Comments

Coming our way soon ..... and a great quote from Bush ...

TheDay.Com: Recession Fears As Jobless Rate Hits 5%

Bush said he is on top of the situation: We can't take economic growth for granted, he said. There are signs that will cause us to be ever more diligent and make sure that good policies come out of Washington. DONT'T HOLD YOUR BREATH!!!! Ps. Should he not always have been making sure he had good policies ....!!!

Posted by it_is_going_with_a_bang @ 11:59 AM 1 Comments

Oops! quick, find some Oligarchs

Firstrung: Prime London house prices fall 2% in last 3 months of 2007

Prime central London property values succumbed to the pressures of the global credit crisis and subsequent market volatility during the final quarter of 2007 and fell slightly, according to Savills Research. A fall of 2% was recorded during the three months to the end of December to leave annual growth running at 16.3%...

Posted by converted lurker @ 11:53 AM 3 Comments

Shocking set of statistics

Mortgagestrategy: UK personal debt hits 1.4trillion

Total UK personal debt hit a staggering 1.4trillion at the end of November 2007, reveals money education charity Credit Action. The charitys latest UK debt statistics reveal the debt growth rate increased to 9.5% for the previous 12 months, equating to an increase of 120bn.

Posted by jack c @ 11:47 AM 0 Comments

edmund conway spreads the word

Daily Telegraph: Property market: Brace yourselves for the crash

Ed Conway gets off the fence, we're all doomed and a recession is sure to follow the HPC with a nice graph. More mainstream bear food

Posted by daiking @ 12:51 AM 0 Comments

Friday, January 4, 2008

End of year window dressing by money managers

Wall Street Journal: Now You See Those Securities, Now You Dont

This article is a bit technical but amusing. The lengths banks are going to to make their complex debt securities disappear. No one wants to be seen to be holding these things anymore. The example they uncovered was for corporate debt rather than mortgage debt. But I bet there is a lot going on in this area too. Where are the bodies? It's a bit like those gangster movies where they dig up the bodies and bury them somewhere else! Not a good time to be a money/bank manager right now, waking up at night in cold sweat.

Posted by happyrenterz @ 11:42 PM 9 Comments

Buying Euros? think again

Seekingalpha.com: News Flash: The Euro's Not Really a Safe Bet

"Also take note that the deposit facility of the ECB pays a negative real interest rate at currently 3%. But I don't think European banks would have much to deposit anyway as it appears that Europe will drown in a sea of debt in 2008. Investors here have been good buyers of property related U.S. debt, relying on wrong AAA ratings and enjoying a moderate yield pickup compared to sovereign debt. It will cost them their corporate life....Europe has: 1. almost no commodity or energy resources 2. the highest labor costs in the world, and 3. a rapidly aging population. So think again before you consider the Euro as a safe haven. It will not be."

Posted by happyrenterz @ 10:24 PM 9 Comments

You gotta read between the lines of these press releases, Reality is quite simple: CRASH

Times: Housing market cooling as loan approvals drop to three-year low

Cooling, flat, gently.... Judith wake up and smell the coffee! "Mortgages for house purchase, a key indicator of the health of the housing market, fell even more sharply, dropping by 37 per cent from levels a year earlier to only 83,000" 37% down!!! gently, slowing, landing, flat

Posted by confused76 @ 10:16 PM 5 Comments

Darling finds his spine?

BBC News: Bank watchdog 'to get more power'

Looks like Dear Alistair isn't happy in his interview with the FT (http://www.ft.com/cms/s/0/ec63ba08-ba27-11dc-abcb-0000779fd2ac.html)... "I do think that the COBRA model which we use for other difficulties is one that has a great deal of attraction." ...seems he want's to give the FSA bigger teeth and (without even having to read between the lines) be able to cease a banks assets and take control on behalf of the public. Not sure how the banks will react but I can see the weekend cartoon in the Guardian of "Crash Gordon" and his trusty side-kick Darling bursting through the doors of Northern Crock in a "Batman"/SAS style entrance ;^)

Posted by root @ 09:01 PM 6 Comments

Getting tighter in OZ

Herald-Sun: Just how far will the banks go on interest rates?

AUSTRALIAN home borrowers are staring down the barrel of more rate increases this year regardless of whether the Reserve Bank tightens monetary policy again. ANZ is expected to increase its variable-rate mortgages by at least 0.2 per cent next week after announcing it would be increasing all of its fixed-rate mortgages by 0.25 per cent from Monday.

Posted by alan @ 08:33 PM 0 Comments

Flashback: Oh dear - are we seeing an Anglo-system world banking system crash?

HousePriceCrash: Are these the first creaks

WESTPAC's electronic banking system crashed across Australia today when a power disruption disabled ATMS and eftpos machines. Customers trying to withdraw money were told to fill in forms at branches and get cash over the counter until power was restored.

Posted by lvmreader @ 07:23 PM 2 Comments

Remeber this?

Scotsman: March 2005: Barclays hit by ATM crash

Barclays hit by ATM crash

MILLIONS of Barclays Bank customers were left without cash after a computer meltdown paralysed half of the banks 3000 ATMs across southern England. The bank is investigating whether the change over to British Summer Time on Saturday night caused the glitch. A spokeswoman said the clock change theory was "something fairly high on the list" of possible causes. Customers remained able to use shop cashback services to access their funds.

Posted by lvmreader @ 07:22 PM 0 Comments

Greed ain't good - it's dumb!

Bloomberg: In Unforgiven Margin Call, Bear Funds Failed on Merrill CDOs

In this case of instant Karma, Merrill Lynch, forcing Bear to write down its CDOs actually got stung to the tune of $8bn themselves because they forced a market valuation of all similar assets. How funny is that. I guess they were not so clever after all.

Posted by lvmreader @ 07:02 PM 0 Comments

Are you sure? (apologies if this article has already been published on hpc)

FT: The coming decline in UK house prices: how large and how helpful?

How stretched is the UK housing market? Given how long UK house prices, especially those in London, have defied both gravity and conventional models of valuation, a confident answer to that question is hardly possible. A look at a couple of the conventional affordability measures suggests, however, that in MPC speak the balance of risk to house prices is skewed to the downside. In English, house prices are more likely to fall sharply than to rise steeply.

Posted by stevie dee @ 06:49 PM 0 Comments

Good article by Edmund Conway

Tgraph: Property market: Brace yourselves for the crash

"A housing slump - severe enough to tip the entire economy into recession - looks likely. Edmund Conway wonders who will take the hardest hit... Hardest hit are the buy-to-let investor in the North and the young couple who have just taken out a big mortgage to buy their first place; best-placed are those who have yet to buy, and families with small mortgages." Yeah!!!

Posted by confused76 @ 06:32 PM 11 Comments

No way out for BOE or CBOUK?.

BBC News: Double-digit rise in Npower bills

Energy firm Npower has announced that electricity prices for its domestic customers will rise by 12.7%, while gas bills will see a 17.2% increase. "Welcome to the Central Bank of the United Kingdom - What We Do The Bank sets interest rates to keep inflation low, issues banknotes and works to maintain a stable financial system." Ba Da Bing!!

Posted by andy @ 05:47 PM 0 Comments

Soft furnishings sales plunge alongside housing

Telegraph: 19 hours ot TV ads fail to help Land of Leather

Falling house sale volumes and equity withdrawal hit home furnishings group land of leather whose shares halved in value within minutes of todays profit warning.

Posted by enuii @ 04:44 PM 2 Comments

Loans dry up !

Yahoo: The Loan Gunmen

Loans are drying up fast as banks curb lending. This is bad for business and bad for the property market.

Posted by doomberger @ 04:44 PM 0 Comments

Well, don't say you weren't warned.

The Power Hour: 100 Items to Disappear First

From a Sarajevo War Survivor:

Experiencing horrible things that can happen in a war - death of parents and friends, hunger and malnutrition, endless freezing cold, fear, sniper attacks.
1. Stockpiling helps. but you never no how long trouble will last, so locate near renewable food sources. 2. Living near a well with a manual pump is like being in Eden. 3. After awhile, even gold can lose its luster. But there is no luxury in war quite like toilet paper. Its surplus value is greater than gold's. 4. If you had to go without one utility, lose electricity - it's the easiest to do without (unless you're in a very nice climate with no need for heat.) 5. Canned foods are awesome, especially if their contents are tasty without heating.

Posted by lvmreader @ 03:48 PM 29 Comments

Suuuure......

EconomicsBriefinf: ATM's Hacked: Citibank Limits ATM Cash Withdrawals

How long before UK Banks start limiting cash withdrawls in the same way?.

Citibank has joined the Hotel California Hedge Fund method of allowing withdrawals. Check your money out anytime you like, it just can't leave. A jump in ATM fraud has led Citibank to slash the maximum amount of cash available to customers from their accounts. In some cases by half. The new cap on cash distributed by the banks's ATMs began in mid-December after what Citibank called "isolated fraudulent activity" in New York City. Daily News reports that one Brooklyn woman said she went to her bank branch on Christmas Eve and was unable to take out her normal cash limit, so she called customer assistance. "She told me customer accounts had been hacked into through cash machines around the city,"

Posted by lvmreader @ 03:44 PM 12 Comments

Not good for the time of year or for the housing market

Market Watch USA: Unemployment jumps to 5%

Goods-producing industries cut 75,000 jobs in December, including 49,000 in construction and 31,000 in manufacturing. Construction jobs have fallen 236,000 since September 2006. Manufacturing industries tied to construction accounted for about 30% of the jobs lost in the factory sector in 2007.

Posted by yoyo1 @ 02:21 PM 0 Comments

Looks like the ECB can't cut rates

BBC: Eurozone inflation remains high

Record oil prices and continuing high food costs kept eurozone inflation at 3.1% in December, the European Central Bank (ECB) has said.

Posted by holding out @ 01:49 PM 12 Comments

Ministry of Information - Article 1004 /3-A1

Corporation: Mortgage approvals still falling

The number of new mortgages being approved for home buying fell again in November, says the Bank of England. Thrown in about half way down this article is this :- "Soaring prices have also pushed the cost of homes out of reach of many potential first-time buyers. " Ya think?

Posted by george monsoon @ 12:57 PM 4 Comments

Goodwill can limit effects of bad times

Associated Press: Housing Glut Could Help War Wounded

The glut of unsold houses pocking the nation's newer neighbourhoods may be just what the doctor ordered for thousands of wounded servicemembers facing homelessness and serious financial hardships since returning home from Iraq and Afghanistan, advocates say.

Posted by su @ 12:39 PM 0 Comments

Don't laugh (too much)

Telegraph: Estate agent jobs go as house sales tumble

One of Britain's biggest estate agents has cut jobs and closed branches as the volume of sales tumble to the lowest level since the 1980s. LSL Property Services, which owns Your Move and Reeds Rains, has shut 12 branches and cut 315 jobs. Chief exec Mr Embley said he could not rule out further cuts, and predicted price falls in some city centres of upto 20%. Transaction volumes have plummeted by 40%, hitting estate agents hard.

Posted by little professor @ 12:34 PM 6 Comments

Now Fionnuala is talking "severe slowdown"

Telegraph: Mortgage approvals slump to 3-year low

Fionnuala Earley, Nationwide's chief economist, said: "We expect further cooling in mortgage approvals and transactions, as part of a severe slowdown in the property market." The next couple of months will deal blow after blow to the market. And I'm STILL getting lots of updates about new properties on the market (M40/M25 South Bucks)

Posted by growler @ 12:24 PM 4 Comments

What a trustworthy fellow

guardian: High anxiety keeps wage rises lower

High anxiety keeps wage rises lower One of the key issues for the Bank of England's monetary policy committee over the past 18 months has been the degree of spare capacity in the economy and its implications for wages. The Bank's labour market expert, Professor David Blanchflower, explains why we should not be concerned about the pace of rising pay

Posted by inbreda @ 11:45 AM 5 Comments

House prices DROP 0.1% in the 4Q sequentially

YourMortgage: House price growth takes a dip

Despite the positive spin by the media (i.e. that prices in 4Q 2007 are 6.9% up versus previous year). "...the average UK house price having fallen to 183,959 from 184,131" yes, that is a 0.1% DROP not a "growth slow down". Let us be prepared to read about "negative growth", "negative EA business expansions", and "negative increase in mortgage lending" in the next few months

Posted by confused76 @ 11:39 AM 11 Comments

Write-up of UK housing market debate

MoneyWeek: Are we heading for a house price crash?

Interesting MoneyWeek roundtable discussion from a couple of months ago, featuring the predictions of various pundits, including an estate agent director - who, from reading this transcript, caused a bit of friction...

Posted by talon @ 11:12 AM 6 Comments

Sterling set to slide in 2008

MoneyWeek: Why sterling faces a pounding

Sterling may have hit a 26-year peak of $2.10 against the dollar last year, but its overall performance was poor. Now the pressure is really on for the pound.

Posted by mary @ 10:36 AM 6 Comments

Here We Go

MONEYWEEK: THE HISSING SOUND BEGINS

The Hissing !!!

Posted by johnnyp @ 10:34 AM 0 Comments

Will Jan. figures, available in March, be record lows?

Firstrung: New mortgage approvals crash by 36% year on year - Bank of England

The number of new mortgages being approved for home buying fell again in November, according to the latest Bank of England data published this morning. The anticipation must be that the January figures, to be released in March, will fall below the lows of 77,000 recorded in January 1999. In its latest figures the BoE show that just 83,000 new mortgages were approved for home buyers last month. Vis a vis 131,000 approvals in November 2006 this represents a dramatic 36% fall and is surely the latest in a series of recorded data, from the BoE, that the much discussed credit crunch has hit the UK borrower and lender hard.

Posted by converted lurker @ 09:54 AM 2 Comments

CPI ignored by the private sector.....

BBC News: Pay increases 'now running at 4%'

Says it all really.......Average pay rises in the private sector are now running at 4%, fuelled by higher inflation, a report by wage analysts has found. The figure is up from 3.4% last month, said Incomes Data Services (IDS). IDS said the jump had been triggered by Retail Price Inflation (RPI) rising to 4.3% in November from 4.2% in October. The RPI figure is used as the basis for many pay deals, despite it being higher than the government's preferred Consumer Price Index measure. Inflation as measured by the Consumer Price Index was unchanged at 2.1% in November - the most recent available data - just above the government's 2% target.

Posted by hpwatcher @ 09:25 AM 9 Comments

Too much debt...where to go?

Telegraph: Economy at risk from 'debt famine'

Households and businesses face a "debt famine" this year, experts warned last night after the Bank of England reported a sharp drop in banks' willingness to lend cash. The Bank's closely-watched new Credit Conditions survey showed that lenders had embarked on a dramatic clampdown on borrowers in both the household and the corporate sectors after turmoil in money markets across the world.

Posted by hpwatcher @ 09:11 AM 2 Comments

UK buyers still harbour ambitions to buy abroad according to experts at the NAEA

Firstrung: Go on, please book the easy jet flight and fill your boots

Property markets across the world have experienced some tough times in 2007 as international economic events have shaken consumer confidence. It seems that for UK buyers, however, our love for overseas property remains strong, according to experts at the NAEA International incorporating FOPDAC. While the outlook varies as one drills down into the established and emerging markets, it seems that the diversity of the UK buyer is one factor helping to keep overseas property demand strong in 2008...

Posted by converted lurker @ 09:03 AM 1 Comments

Loans dry up.

Telegraph: Economy at risk from 'debt famine'

With new regulation announced today by Alistair Darling and credit tightening up its going to be almost impossible to get credit unless conusmers are squeaky clean.

Posted by doomberger @ 08:53 AM 0 Comments

Slash rates as wages rise?

Bloomberg: U.K. Wages Rise at Fastest Pace in at Least 13 Years, IDS Says

Jan. 4 (Bloomberg) -- U.K. wage negotiators agreed on the biggest salary increases since at least 1994 in the three months through January as inflation fueled higher pay demands, Incomes Data Services said. The median salary settlement rose to 4 percent from 3.4 percent in the three months through December, the London-based researcher said in an e-mailed statement today. The reading is based on 30 agreements covering 434,889 workers.

Posted by uro_who @ 07:31 AM 2 Comments

How long before the Poles give up their British dream...

International Herald Tribune: Brazilians giving up their American dream

In the last half year, the reverse migration has become unmistakable among Brazilians in the United States. Homeward-bound Brazilians point to a slumping American economy, coupled with the steep drop in the value of the dollar against the currency of Brazil, where the economy has improved. Some are leaving after losing homes in the subprime mortgage crisis. More Brazilians are leaving than arriving - the reversal of an upward curve that seemed unstoppable as recently as 2005, when Brazilians were sneaking across the United States-Mexico border in record numbers. "I believe we lost 5,000 Brazilians this year [in Massachusetts]" he said. "The landlords are going to face a crisis soon." ----- How long before this happens with the Poles, the Russians, and other recent immigrants to Britain?

Posted by drewster @ 01:24 AM 15 Comments

Phew - Japan's markets will only be open for the morning session

Blomberg: Japanese Stocks Tumble; Topix Has Record Opening-Day Fall

Japanese stocks fell, with the Topix index having its worst New Year opening, after U.S. economic reports pointed to increasing chances of a recession, and the yen climbed to the highest in a month versus the dollar. 10:37 (Tokyo) -723 (-5%)

Posted by stevie dee @ 01:19 AM 0 Comments

Honest article about the social benefits of any HPC

FT: The coming decline in UK house prices: how large and how helpful?

"The social benefits from a significant decline in UK house prices are bound to be significantly larger than any short-term credit squeeze on consumers, writes Willem Buiter"

Posted by trough2010 @ 12:30 AM 6 Comments

Thursday, January 3, 2008

La plus ca change..................

FT: An Ottoman warning for indebted America

Future historians will look back on the current decade as a turning point comparable with that of the Seventies. No, not the 1970s. This is not going to be another piece pointing out the coincidence of an unpopular Republican president, soaring oil prices, a sagging dollar and an unwinnable faraway war. I am talking about the 1870s. At first sight, the resemblances across 130 years may not seem obvious. The 1870s were a time when conservative leaders such as Benjamin Disraeli, British prime minister, were powerful and popular. It was a time of falling commodity prices, after the financial crash of 1873 and the opening up of the American plains to agriculture. And it was an era of currency stability, as one country after another followed the British lead by pegging to gold.

Posted by lvmreader @ 11:02 PM 1 Comments

"Money without a brain can be a dangerous thing"

Motley Fool: Resign, Bernanke and Paulson

Bernanke's thinking goes like this: Problem: Low interest rates led to way too much lending Solution: Cut interest rates to encourage more lending Slashing rates to ease the credit crunch is like sticking a band-aid on a tumour. The tumour needs to be cut out, no matter how costly and painful. There's only one answer - house prices need to fall - a lot.

Posted by little professor @ 10:55 PM 5 Comments

This will probably be fully offset by the plunging price of Foot Spas from Argos!!!

BBC: Npower to increase energy prices

Npower is to increase both its gas and electricity prices, the UK's fourth largest energy supplier has confirmed. The company, which has four million customers, said it would provide exact details on Friday. Its move comes on the back of higher wholesale energy bills, lifted by crude oil hitting a record $100 a barrel in New York earlier this week. Analysts predict that other UK energy providers are now likely to announce price rises.

Posted by tyrellcorporation @ 10:15 PM 6 Comments

Estate agents start to contract as business evaporates

Times: Fears of big cutbacks for estate agents as LSL closes branches

First large redundancies hit LSL Property Services, owner of the 290 Your Move offices as it closes 12 branches and cuts 315 full-time jobs, expect more to follow suit.

Posted by enuii @ 09:37 PM 9 Comments

House prices only need fall by 5% to make them affordable...glad that's sorted then

Firstrung: House price affordability at lowest level since 1991 - Lombard Street Research

Lombard Street Research compile a quarterly report on UK house prices. Despite their affordability index being at its worse position since 1991 (the last recognised 'epicentre' of a reported house price crash) LSR feel justified in predicting only a modest house price correction of 3-4% in 2008. Thereafter LSR suggest only a 5% correction is needed to put property 'back on track' in terms of affordability. LSR base this theory on interest rates needing to increase to 8.5% in order to mirror the severe affordability problems which existed in 1991.However, this does not take into consideration that (according to the CML) mortgage payments, as a percentage of take home pay, are currently as high as in 1991 With that in mind the LSR research is compromised and therefore deeply flawed.

Posted by converted lurker @ 08:27 PM 4 Comments

Estate agents in a pickle

Mortgagestrategy: Essex estate agents demand cut in interest rate

Local estate agents have called on Brentwood and Ongar MP Eric Pickles to press for an interest rate cut. Agents say the cut is essential to reviving the ailing property market. Pickles, says: "At a recent meeting with estate agents there was strong agreement that the Bank of England needs to cut interest rates early in 2008 if the slow down in the housing market is to be reversed.

Posted by jack c @ 07:55 PM 10 Comments

Consumers will be squeezed by food price hikes

MoneyWeek: Why food will cost you more in 2008

With demand from Asia rising and America using ever more corn to fuel its ethanol programme, the price of food is set to hit consumers' wallets even harder in 2008 - but there are also ways you could profit from the boom...

Posted by mary @ 06:32 PM 0 Comments

The nasty side to HPC

Safe Haven: Social Implications of a Significant Economic Downturn

Be careful what you wish for in 2008.

Posted by sold 2 rent 1 @ 05:51 PM 13 Comments

What is the Bank of England for if it will not defend our currency?

The Times: Rate cut pressure builds as Bank fears defaults

At the moment, there are three comments on this article and they are all very much against rate cuts. That is the only good news I can see in this article.

Posted by quiet guy @ 05:39 PM 4 Comments

And the rest. I reckon it will double in two-three yrs.

Forbes: German institute DIW sees oil prices doubling within 10 years

FRANKFURT (Thomson Financial) - German research institute DIW sees oil prices doubling to 200 usd per barrel within the coming 10 years, DIW's head of department for energy, transport and environment Claudia Kemfert told Berliner Zeitung. 'Oil reserves are becoming scarce, and that will drive up prices further,' Kemfert told the newspaper. Within five years, oil prices will likely reach 150 usd per barrel, she said.

Posted by planning4acrash @ 04:47 PM 2 Comments

Unemployment ahead

CNBC: Financial Giants Gear Up To Cut Thousands of Jobs

"After geting burned by billions of dollars in losses from the mortgage meltdown, financial giants like Merrill Lynch and Citigroup are gearing up for major job cuts, and could start announcing layoffs as soon as Thursday, CNBC has learned. The jobs cuts, which may be made over several weeks, could total up to 10% of those employees who are not in investment banking or brokerage operations, or about 1,600 positions. The credit and bond departments are most at risk..."

Posted by alan @ 04:31 PM 2 Comments

Can anyone spare a dime? My bank can't lend anything. Where's the trust gone?. It's getting very messy out there.

Bloomberg: U.K. Banks Plan to Tighten All Lending This Quarter

U.K. banks told the Bank of England they plan to make fewer loans to consumers and companies in the first quarter, threatening to deepen the economic slowdown.

Posted by acetip @ 04:18 PM 0 Comments

the usual nonesense

Goverment: Nocitybailout - epetition reply

"As a responsible citizen, I do not believe it is right for you to ask me to pay for the City's financial excesses, especially since a bailout encourages lenders to continue making predatory loans, with the assumption that taxpayers are on the hook. Any proposed bailout will only reward lenders and borrowers who acted irresponsibly, and it will punish people who work hard and diligently manage their finances by not buying houses which they cannot afford.

Posted by seanb303 @ 03:48 PM 4 Comments

BTL could seriously damage your wealth

Citywire: Buy-to-let investors should be wary of new-build developments

The values of new-build properties, in particular one and two-bedroom apartments, are likely to continue to fall in 2008 and buy-to-let investors must be careful not to pay too much even if the seller is offering a big discount.

Posted by jack c @ 02:52 PM 2 Comments

These are better indicators of the upcoming house price crash

Press: Estate agents jobs go as sales tumble

"From retail gloom to more property market woes. The latest victim of an increasingly jittery housing market is residential property group LSL Property Services. LSL's estate agency division, which operates under the YOUR MOVE and Reeds Rains brands, was forced to admit this morning that business volumes slumped by around a third in the second half of 2007. That news has left its shares down 7.5p, or 5.4%, at 131.5p. As a result of the estate agency troubles it is in the process of closing 12 underperforming branches and slashing 200 full time jobs." That means a market recovery is not in sight... sorry optimists!

Posted by confused76 @ 02:33 PM 9 Comments

Unemployment starts here

Telegraph: Estate agent jobs go as house sales tumble

The start of redundancy within Estate Agency.... But doubtless we'll still hear all is well and business is "consistant and sustainable" and in tune with the market.

Posted by growler @ 02:32 PM 3 Comments

BoE Survey Results

Reuters: Credit conditions to tighten further

Households and companies are likely to find it harder to borrow in the coming months after money market turmoil tightened credit conditions at the end of last year, a survey from the Bank of England showed on Thursday. The survey also showed lenders expected mortgage defaults to rise and demand for home loans to fall in the coming months, adding to evidence that the housing market is cooling fast.

Posted by alan @ 02:25 PM 0 Comments

I think we all knew it was only a matter of time before this started happening!

The Telegraph: Estate agent jobs go as house sales tumble

One of Britain's biggest estate agents has cut jobs and closed branches as the volume of sales tumble to the lowest level since the country's last house price slump in the late 1980s. LSL Property Services, the owner of the estate agencies Your Move and Reeds Rains, has shut 12 branches and eliminated 315 jobs in a move that signals the slowing market will take its toll on estate agents this year.

Posted by francis @ 02:19 PM 1 Comments

BBC and government desperately try to downplay new oil price highs

BBC "News": Single trader behind oil record

If the Bank of England cuts interest rates while oil trades at over $100 a barrel, it will look very much like they've lost sight of their remit.

Posted by paul @ 01:57 PM 7 Comments

Hamilton Bolton - 1957

Elliott Wave International: What is Deflation and What Causes it to Occur?

Although this is an exceprt from a book (which has been mentioned here before) the interesting thing i find is the letter from HB - where he describes the observations on Us depressions. Written in 1957 In reading a history of major depressions in the U.S. from 1830 on, (a) All were set off by a deflation of excess credit. This was the one factor in common. (b) Sometimes the excess-of-credit situation seemed to last years before the bubble broke. (c) Some outside event, such as a major failure, brought the thing to a head, but the signs were visible many months, and in some cases years, in advance. (d) None was ever quite like the last, so that the public was always fooled thereby. (e) Some panics occurred under great government surpluses of revenue (1837, for instance) and some und

Posted by techieman @ 01:46 PM 3 Comments

Kiss the EAs bye bye!

Tgraph: Your Move owner axes jobs as housing slows

"LSL Property Services has shut 12 branches and axed 315 jobs as the slowdown in the country's housing market begins to take its toll on the industry. The estate agency network, the third largest in the UK, said volumes in the second half of 2007 fell by around a third" (that is in line with the 26% slowdown reported by the Land Reg, but this is set to continue. if they foresaw a recovery they would not close branches now!!) "The group said it now plans to increase estate agent's fees" (wow wow BTLosers take notice) (big laughter: AHA HAHAHHA)

Posted by confused76 @ 01:36 PM 0 Comments

Trouble for the Estate Agents

Telegraph: Your Move owner axes jobs as housing slows

This artical highlights the trouble facing Estate Agents and high house prices. Basically if no one can afford a house the estate agents do badly and loose jobs. My advise to them is knock 40% off the asking prices and people will buy houses again and you won't loose your jobs. To all the estate agents reading this cut the asking prices to save your jobs. The articals solution is to make people pay more to sell houses. Interesting idea but one which i think is going to fail I say cut cut cut the asking prices of houses.

Posted by priced out ftb @ 01:27 PM 0 Comments

Sell your house, buy Euros

ThisWasMoney: Households will face borrowing crunch

At this point very little to mitigate the crunch can be done. House prices will fall and the pound with it, in an attempt by the BoE to soften the blow by reducing rates. "Vicky Redwood, of Capital Economics, said: 'The Q3 survey had suggested that households would emerge relatively unscathed from the credit crunch. But the latest survey shows that lenders have reduced the supply of mortgages 'materially' and increased mortgage lending spreads. 'This supports anecdotal evidence of increases in mortgage fees and widening lending spreads." In a year's time we will look back and say "the writing was on the wall"

Posted by confused76 @ 01:25 PM 1 Comments

Curry's profit warning..

Mattd49: BBC Website

Firts sign of a poor Christmas on the high street.

Posted by mattd49 @ 01:06 PM 0 Comments

Only confirms what we already know, money's too tight to mention

Firstrung: Credit crunch affecting mortgage lenders supply of household credit - Bank of England Credit Conditions Survey

Contrary to their expectations in the Q3 survey, lenders reported that the availability of secured credit to households had been reduced materially over the three months to mid-December. They expected a further reduction in secured credit availability over the next three months. Lenders reported that household unsecured credit availability had been reduced a little over the past three months. They expected a further slight reduction in unsecured credit availability over the next three months. Corporate credit availability was reported to have been reduced significantly over the past three months, in line with lenders' expectations in the Q3 survey. A further reduction in the availability of credit was expected over the next three months

Posted by converted lurker @ 12:52 PM 0 Comments

Your Move owner axes jobs as housing slows

Daily Telegraph: Your Move owner axes jobs as housing slows

LSL Property Services, the owner of the estate agency Your Move, has shut 12 branches and axed 315 jobs as the slowdown in the country's housing market begins to take its toll on the industry.

Posted by becky @ 12:45 PM 0 Comments

Defaults set to rise!

BBC: Bank warns on mortgage defaults

As the credit crunch tightens defaults are set to rise.

Posted by doomberger @ 11:52 AM 0 Comments

Demistify the house bandwagon

Fool: House Prices Double Every Seven Years, you wish!

"Most recently, I came across this claim in an interview with actress-turned-property-millionaire Fiona Fullerton in last weekend's Financial Times. Alas, while Ms Fullerton may be a successful buy-to-let baroness and author of Fiona Fullerton's Guide to Buying to Let, she doesn't have her facts right."

Posted by confused76 @ 11:43 AM 2 Comments

Sales volumes crash by up to 39% in 2007 - Land Reg latest figures

Firstrung: UK house prices increase by 0.6% as house sales crash

In theory this data relates to house sales transactions that could have taken place August 2007 onwards. What is alarming is the drop off in sales volumes for the same period vis a vis 2006. The house price sectors the majority of Britons operate in saw a dramatic contraction in transactions. In the lower priced band of up to 150K, (the first time buyer market), sales volumes were a staggering 39% down in direct comparison with 2006. Once again this should be viewed as not including the impact of the credit crunch, causing 44% less mortgages for house purchase apprrovals as acknowledged by the BBA and CML.

Posted by converted lurker @ 11:32 AM 17 Comments

Delayed Reaction?

Land Registry: House Prices Nov 2007

The latest from the Land Registry issued 11:00 today which shows completions in November - mostly from "sale agreed" 3 months before. Annual growth is unchanged from last month at 8.1%, but traditionally August/September sales recover after July. It also shows less activity, which must also indicate the way to go for future reports -> ie downwards!

Posted by growler @ 11:12 AM 5 Comments

Is this the big one?

The Guardian: Is this the big one?

It is 15 years since Britain last suffered a recession. But now the housing market is slumping, oil prices are soaring and a credit crisis is paralysing the banking world. Are the conditions right for a 'perfect economic storm'? Larry Elliott reports

Posted by becky @ 11:05 AM 1 Comments

Gold and oil: the safest predictions for 2008

MoneyWeek: Why you should take a tip from Russia's central bankers

Even the most bullish investors didn't expect oil to top $100 or gold to breach its all-time high so soon. It's time to follow the Russian central bank - and invest in gold.

Posted by mary @ 10:47 AM 3 Comments

Turning the credit tap off...

Bloomberg: U.K. Banks Plan to Tighten All Lending This Quarter

U.K. lenders told the Bank of England they plan to reduce the supply of credit to consumers and companies in the first quarter, threatening to deepen the economic slowdown.

Posted by francis @ 10:45 AM 1 Comments

When this malaise is over who will be controlling wealth?

FT: Insight: Post credit bubble wealth transfer will beggar belief

"There are few safe bets in currency markets, but in Europe the nearest thing to one is that sterling, attached to a debt-sodden UK economy afflicted with larger financial imbalances than the US, will sink." "For western politicians to complain about the loss of crown jewels is special pleading of a particularly invidious kind. For there is a marked similarity in what is happening today to what happened in the 1997-98 crisis in Asia. Then hot money from western banks exacerbated financial bubbles and inflation across the region. When the hot money pulled out, more stable western funds snapped up Asian assets on the cheap."

Posted by happyrenterz @ 08:56 AM 2 Comments

Savills 3%+ forecast for 2008 not looking so good now !

Times online: London prime property market falters

Prices at the higher end of Londons property market, thought to have been largely immune to recent ructions in the wider industry, have suffered their first quarterly decline since 2003. Savills, the estate agent, has revealed that the price of prime property that valued at more than 1 million had fallen by 2 per cent in the last three months of 2007.

Posted by jack c @ 08:22 AM 3 Comments

Predictions for Scotland

The Scotsman: Selling through the storm

We asked those in the industry around the country to look into their crystal balls and provide predicons for Scotland's property market in 2008

Posted by su @ 07:51 AM 6 Comments

Could have been written by a HPC regular

Scotsman: A new morality needed

UK banks have indulged in irresponsible subprime lending, with 6x income multiples and 125% LTV commonplace. Now that prices are falling the effects on the economy could be huge. Wage inflation will rise, as people run out of easy credit to pay for that designer handbag. Those who argue for a IR cut to save the housing market should remember that the MPC's remit is solely to control inflation. I don't recall EAs and mortgage lenders calling for base rate rises when house prices were booming. Middle-class Malcolm who jacked in his job to become a property developer is quaking in his designer boots. Sarah Beeny has a lot to answer for.

Posted by little professor @ 12:45 AM 15 Comments

Danger: Times Vested Interests Fishing for FTBs

The Times: About to get lucky?

This is a disgusting piece of journalism by the Times. I could not believe my eyes at first. The comments to the article offer some encouragement though.

Posted by quiet guy @ 12:12 AM 13 Comments

Wednesday, January 2, 2008

And they want to cut interest rates?

BBC News: Oil hits record $100 a barrel

Oil has traded at $100 a barrel for the first time, prompting a drop in shares and a surge in gold prices. Violence in Nigeria, Algeria and Pakistan, the weak US dollar and the threat of cold weather [?] have all raised prices. The high price of oil will stoke inflation at a time when many central banks are trying to cut interest rates

Posted by little professor @ 11:26 PM 1 Comments

The pain in Spain

Bloomberg/RealEstate: Inmobiliaria Colonial Shares Are Suspended in Madrid

Inmobiliaria Colonial SA, the Spanish property company that lost 1.87 billion euros ($2.7 billion) in market value in the last two sessions, was suspended from trading in Madrid. Rising borrowing costs and stricter lending conditions caused prices in Spain's residential property market to freeze last year, fueling concern about the level of Colonial's debt.

Posted by alan @ 10:43 PM 2 Comments

Sabre Rattling ? or don't they care about inflation ....

BBC News: Fed May Cut Rates Substantially

The Federal Reserve's interest rate-setters say the credit crunch could lead to a situation that will require "substantial" rate cuts. The Dow Jones fell sharply after the release of figures showing manufacturing contracting, and added to its losses after oil prices hit $100 a barrel. But they rebounded after the minutes were published. ( so the Sabre Rattling worked today then! )

Posted by it_is_going_with_a_bang @ 09:55 PM 4 Comments

Its 2008 and Britannia is Going Down

Pound Falls to Record Low Against Euro on Rate-Cut Speculation: Bloomberg

Another rate cut and Broon's Glubberment will sink Britannia:-

`The pound is driven mostly by an interest-rate story and not much else at this point, the outlook is not encouraging.''

Not much hope for house prices, inflation or your holiday spends in 2008.

Posted by enuii @ 08:28 PM 10 Comments

House prices to fall for first time in 15 years

Telegraph: House prices to fall for first time in 15 years

The average home will lose 8,000 or more of its value this year, experts have warned

Posted by phil @ 06:33 PM 4 Comments

Gordon's mirage economy crumbling

FT.com: Worst outlook since dotcom bust

Nearly two-thirds of the economists thought house prices would fall this year [2008], although there was wide disagreement over the effect of a housing downturn on the economy. Nearly nine in 10 think public finances are not in good order so there is no leeway for discretionary tax cuts or increases in public expenditure, and the third most-mentioned risk to the economy is inflation, limiting the ability of the Bank of England to cut interest rates.

Posted by dohousescrashinthewoods @ 06:15 PM 9 Comments

Oil goes through US$100 but I bet CPI will still drop and RPI will go through 5%

BBC: Oil price at record $100 a barrel

Oil has traded at $100 a barrel for the first time. Violence in Nigeria and Algeria, the weak dollar and cold weather have all raised prices after the New Year break.

Posted by david20040_0 @ 05:39 PM 6 Comments

Fed up with these property cheerleaders?!

TheShamelessTimes: Mortgage slump as homeowners stay put

Compare with the post from the Irish Independent below. The hyper-hyped "soft landing" story is pure science fiction, like the UFO space crafts that land on the earth and gently take off with their alien payload. I liked some of the comments, like the realist one "I've now finally sold all my BTL, albeit the last one at a slight loss, but a great profit overall. Every time I hear a story about fools losing money on the housing makret, I'll think of those poor souls who bought one of my properties which are all going to plummet in value." UAHHH AHHAHHA happy new year!

Posted by confused76 @ 05:19 PM 8 Comments

What do you call a big problem? - "The Titanic"

Property Week: Property loan defaults 'set to surge'

"Bad debts from loans to non-listed commercial and residential developers could increase as much as 50% this year as property markets continue to struggle, according to property consultants EC Harris." "Meanwhile, UK bank lending to commercial property represents roughly 11% of all lending, equal to the proportion in 1989, just before the last crash." Watch out for that iceberg ... it's getting tooooo cloossseeee ... crunch ...

Posted by fahrenheit451 @ 03:29 PM 0 Comments

This is what the sheeple need to read

Irish Independent: The game is up for the housing hype-peddlers

A good summary, in simple laymans terms, explaining the basics of how the housing market managed to be in such a position

Posted by lem @ 02:49 PM 6 Comments

Paragon's View of BTL

Mortgage Introducer: BTL yield to rise by 0.5%

With the sector expanding to represent 15 per cent of all new mortgages by the year end, landlords are expected to be in a solid position to ride out the UK economy's continued volatility. Whaaaat!!

Posted by renting2 @ 02:42 PM 13 Comments

"Bleak"

BBC Five Live: 5 Live property prediction

2 hours 37 mins 40 secs in. Brilliant stuff. "Your house is going to be worth less" Richard Bacon sounded crest fallen as he said he bought at top in Summer 07 in a sealed bid. ; what a chump.

Posted by doomwatch @ 02:15 PM 9 Comments

More on the next BIG US housing problem "pay option ARMS"

FT: More US mortgage mayhem looms

"Subprime... is 2007s story. 2008 will be the year of the pay option ARM, also known by various institutions as Pick-a-Payment, Flex Pay, or Cash Flow ARM. This homeowners delight is a mortgage that comes with a virtual credit card, so when you fancy making a lower monthly repayment on your loan you can use your card. But that additional credit facility, of course, comes with a higher interest rate, and an upper limit at which point youd better be ready to pay the lot back."

Posted by happyrenterz @ 12:40 PM 6 Comments

Mixed News From The "Experts"

Times Online: House prices predictions for 2008 a region-by-region breakdown

The housing market finally seems to have turned. Analysts have been predicting a slowdown since interest rates first went up in August 2006, yet the boom continued in many areas. Annual house price growth has been running in double digits for much of the year but all of that is now changing.

Posted by garyb @ 12:28 PM 0 Comments

Credit Action stats make for grim reading..'appy new year

Firstrung: Debt enquiries to Citizens Advice Bureaux in England and Wales have hit a record high

Each month the Firstrung team feature the data compiled by Richard and his team at Credit Action. As each month passes the 'tale of the tape' gets more jaw dropping/bacon butty dropping. It's pointless highlighting particular statistics in this survey. If you have five minutes it's worth reading the report in full in order to take on board just how apparently 'out of control' our spending and subsequent combined debt actually is.

Posted by converted lurker @ 11:57 AM 2 Comments

The bears are circling ... waiting for the kill ...

Property Week: Lipton fears 1990s style property crash

'One of the things I remember very, very clearly from the early days of the 1990 cycle was that no one ever believed it could happen,' he told the Financial Times. 'There was a very strong view that tenant demand was strong, that investment demand was strong, and then suddenly we saw yields rise sharply and rents fell.' So, what triggered the 90's crash? Mainly a rise in unemployment (difficult to correct once the SME's have gone), a bit of over zealous interest rate rises (easily corrected), and a bunch of v. bad policies. I'm getting dj vu ...

Posted by fahrenheit451 @ 11:55 AM 12 Comments

Er, not the best time to sell ...

Property Week: Credit crunch delays 309m Westfield sales

It's probably not the best time to sell something and, given that we're not a forced seller, we decided we will take it off the market and deal with it at another time, he said. We haven't seen retailer bankruptcy blow out or our vacancies blow out. We've seen a slowing in growth of retail sales since the sub-prime issues came about, he added. This is not the first credit crunch, it's not the first volatile market environment that we've been in, and we're in business for the longer term. So ... it's time to ride the storm, its official!!

Posted by fahrenheit451 @ 11:24 AM 0 Comments

Why no one will be buying houses this year

MoneyWeek: Why no one will be buying houses this year

In 2007, the world economy finally reached a turning point. The happy era of cheap money, soaring asset prices and rampant private equity dealing, is now over. A newer and far less forgiving world awaits us this year... What's more, the latest indicators suggest a sentiment on the UK housing market has experienced a complete turnaround.

Posted by mary @ 11:23 AM 0 Comments

Leading from the Front - A commertial Property Recession

Property Week: Office rents could plummet as demand slumps

So the Banks are going to lead the way. If there is less need for the banks to have offices, presumably there is unemployment on the way, then a general tightening of belts in the residential market will follow. But hey this is only the City, where they pay way over the odds for rental space in all areas anyway. So perhaps it a general levelling out of London prices ...

Posted by fahrenheit451 @ 11:15 AM 1 Comments

Meet the Pay Option ARM

Loanworkout.org: Its Not All Subprime. Pay Option ARMs - Californias Billion Pound Gorilla

Something our American cousins will be facing up to shortly. Data seems to be decently enough sourced. Anyone have any idea if these products have been available to UK borrowers?

Posted by james @ 11:06 AM 0 Comments

The culture of spending other people's money

Independent: It may be Europe's cultural capital, but the people of Liverpool are paying a high price

"Research by debt agencies in the city has revealed that the average debt of clients seeking advice on personal debt in the north-west city has now hit 50,000 per person double the sum that was quoted in 2002 and well above the national average. All of the city's debt agencies have reported a marked increase in inquiries during the traditionally quiet Christmas period. And the figures of debt reported in Liverpool are on credit cards alone. With a growing number of the city's residents finding themselves in arrears on their mortgage payments, debt experts say they fear that house repossessions in Liverpool will soar during 2008."

Posted by trough2010 @ 11:04 AM 2 Comments

"Its taken much longer than I thought ..."

Money Week: My best and worst tips of 2007

In big-picture terms, I havent had a bad year at all. I started out reiterating all my usual themes. I worried about the strength of the economy as a whole and in particular (as ever) about the residential and commercial property sectors. Its taken much longer than I thought, but both are now in trouble: commercial property funds are in a state of semi-collapse and house prices appear to be falling across the country.

Posted by doomwatch @ 11:00 AM 0 Comments

1 Euro = 74p

Reuters: Sterling hits all-time low vs Euro

The pound was also down 0.3 percent versus the dollar at $1.9806. On a trade-weighted basis, the pound touched its lowest level since late 2003 at 97.3.

Posted by alan @ 10:55 AM 0 Comments

Xmas is over, now is the time for debt junkies to go cold turkey

Firstrung: Britons' personal debts are increasing by 1 million every 4 minutes

Total UK personal debt at the end of October 2007 stood at 1,391bn. The growth rate increased to 9.7% for the previous 12 months which equates to an increase of 122bn. Total secured lending on homes at the end of October 2007 stood at 1,169bn. This has increased 10.5% in the last 12 months. Total consumer credit lending to individuals in October 2007 was 222bn. This has increased 5.8% in the last 12 months.

Posted by converted lurker @ 10:34 AM 6 Comments

UK and US property & finance market

FruitMortgages: UK and US property & finance market

The UK and US property & finance market has been talked about greatly over the last few month, by myself included. I would like to point out however that there are several major differences between the UK housing and mortgage market and than of the US, suggesting that the UK should not feel the same house price and credit crises currently faced by the US. Fixed Rate Mortgages & Stepped Rate Mortgages There is a conservative tendency in the UK for homeowners to prefer fixed rate mortgages, as opposed to variable rate products on the market, historically due to the consequences many homeowners felt in the 1990's with interest...

Posted by daniel morgan @ 09:49 AM 0 Comments

Let em' fry.......

This is money: Interest payments soar to 93bn

They should have thought about the repayments when wrapped up in the fantasy of their ''lovely new house''...the fools!!! ''Britain's interest repayments have soared by 12.7bn to a record 93bn a year - raising fears that many families' finances are spinning out of control. The figures suggest millions of Britons already struggling with rising household bills could be left unable to cope with the mounting cost of their debts. Nearly one in four admits that repayments on their current debts are unmanageable, according to a study.'''

Posted by hpwatcher @ 08:56 AM 0 Comments

Stuff we already know, and Jo Public should've known

BBC: City of debt shows US housing woe

"So you could have a reduction of total credit to the economy of two trillion dollars".

Posted by voiceofreason @ 08:52 AM 2 Comments

Finally, it has been a long wait, but worth it

Telegraph: House prices to fall for first time in 15 years

David Owen, the chief European economist at Dresdner Kleinwort, said there had only been four times since the Second World War when average house prices were more than seven times disposable incomes: 1948, 1979, 1988 and 2007. In each previous case, house prices then dropped by 30 per cent, adjusted for inflation.

Posted by andrew @ 08:32 AM 7 Comments

Big guns predict big falls

FT: Correction in property on its way

Julian Le Grand of the London School of Economics said prices could fall to 5x average earnings from the current 9x. John Van Reenen and Willeim Butier, also of the LSE, predicted house price falls of 20-30% over the next couple of years. Philip Booth at the Institute of Economic Affairs sees price falls of 10 per cent in 2008. James Knightley at ING said mortgage equity withdrawal could "grind to a halt." Lombard Street Research, which conducted the survey of 52 leading economists, said falls of 4% should bge expected in 2008.

Posted by little professor @ 02:40 AM 6 Comments

Reckless Borrower Count the Cost

Independent: Broke Britain: millions face struggle to stay afloat as financial crisis hits home

Debt experts are predicting a record number of personal insolvencies this year as excessive Christmas shopping, rising mortgage payments and soaring food and fuel costs force thousands of people over the financial edge and into bankruptcy.

Posted by quiet guy @ 12:32 AM 21 Comments

Survey of 52 economists predicts correction ranging from 0% to -20%

Financial Times: Correction in property values on its way

Every year the FT conducts a survey of top economists on a range of topics, including house prices. This year they expect house prices to shift by 0% to -20%, with the average probably about -5%. These are just estimates - bear in mind that in last year's same survey, none of them predicted the UK's first run on a bank in over a century. Also see comments below for links to the other survey topics, including: "Britain faces worst outlook since dot-com bust" and "National coffers judged 'shocking' ".

Posted by drewster @ 12:22 AM 5 Comments

Tuesday, January 1, 2008

If this won't warm up your day, nothing will, top of the propertysnake today!!

Top of the Props (Property Snake!!): 1,500,000 (DOWN 49% from 2,999,000)

23 Sep 2007 First day listed (price 2,999,000) 28 Oct 2007 Price changed from 2,999,000 to 2,100,000 28 Dec 2007 Price changed from 2,100,000 to 1,500,000

Posted by planning4acrash @ 09:52 PM 7 Comments

Inflation and interest rate cuts, hmmm.

Yahoo: Why the era of cheap food is over

Food prices worldwide hit record highs in 2006, and all the signs are that they will go on rising this year, and for the foreseeable future. The era of cheap food, the experts say, is over and we are going to have to get used to it. So how will interest rates be cut to support house prices in this environment? This is not 2005!! Peak Oil, Peak food, peak everything. We are living at the peak of materialist civilisation. Make sure you enjoy its brief moment.

Posted by planning4acrash @ 06:43 PM 0 Comments

Another bank in trouble ...

Telegraph: FSA forces London Scottish Bank to seek cash injection

As much as the Bank of England, treasury and government like to pretend otherwise, the current problems stem from a crisis of solvency, not liquidity.

Posted by paul @ 05:10 PM 4 Comments

Worst reporting ... ever (part 2)

Express: HOUSE PRICES PREDICTED TO FALL

Up to 20,000 could be wiped off the average value of a home during the coming months, it has been predicted. 4 days ago they had a headline (as posted on HPC by Little Professor) of "House prices rising again" - amazing how the market has turned since the 29th of December 2007.

Posted by jack c @ 03:50 PM 10 Comments

Describes it perfectly!!

Pimco Bonds: The Winners Curse

Old article, prediction from 2006, which goes really clearly into business cycles. Folks, looks like Gold will be a sure bet until 2010, when it will probaly have doubled, but will crash with the first incle of good economic news, maybe the first interest rate rise from the USA. Fingers on the buzzers, Dec 21, 2011, end of the Mayan Calender anybody?!?! Then the new business cycle begins. Any more predictions on Gold, recession, beginning of the new economic cycle?!

Posted by planning4acrash @ 01:37 PM 7 Comments

A year of falling UK buyer power and imported inflation ahead

Telegraph: Biggest drop for sterling since '92

Although sterling rose yesterday against other world currencies, it has fallen by 6.1pc in the past year, which is the biggest annual decline since 1992 - the year in which Britain was ejected from the European Exchange Rate Mechanism. The sterling exchange rate index, which compares the pound with a comprehensive basket of currencies, finished the year at 97.9, having weakened by 6.7pc in the past six months. Having risen above the $2.10 mark against the US dollar, the UK currency is now back at $2, and is expected eventually to drop to $1.80 or lower.

Posted by planning4acrash @ 10:53 AM 7 Comments

2008, the year of facing inflationary realities

Independent: Anger as rail fares rise by up to 14.5 per cent

"Train companies have been accused of imposing "unjustified and unfair" price increases of up to 14.5 per cent from tomorrow amid warnings that the cost of many season tickets will go up by many times the rate of inflation" Or is it that inflation is many times the rate of inflation?!

Posted by planning4acrash @ 10:49 AM 16 Comments

A 50% fall, close to my earlier prediction!

jameshowardkunstler Blog: Clusterfuck Nation by Jim Kunstler

The housing market is in a death spiral. Eventually, the median price of a house will have to fall back to the median income, and it has a very long way to go, perhaps 50 percent. One thing the public doesn't get about the housing debacle is that it is not just the low point in a regular cycle -- it is the end of the suburban phase of US history. We won't be building anymore of it, and those employed in its development will have to find something else to do. Now, unfortunately the whole point of the housing bubble was not really to put X-million people in so many vinyl and chipboard boxes, but rather to ramp up a suburban sprawl-building industry as a replacement for America's dwindling manufacturing economy.

Posted by planning4acrash @ 10:39 AM 7 Comments

forget the tough times aheah, lets party!

BBC: Business 'faces difficult year'

British business faces a tough year as it grapples with the global credit crunch and rising food and energy costs, business group CBI has warned. Richard Lambert, director-general of the Confederation of British Industry, also said that the balance of economic power was shifting to India and China.

Posted by hpwatcher @ 09:17 AM 0 Comments

Car Loan Credit crunch in the US

Los Angeles Times: New cars that are fully loaded with debt

Americans haven't just been taking out risky mortgages for homes in the last few years; they've also been signing larger automobile loans for significantly longer terms than they used to. As a result, people are slipping into a perpetual cycle of automobile debt that experts think could lead to a new credit crunch extending from dealerships to driveways and all the way to Wall Street.

Posted by testuser @ 01:56 AM 1 Comments

Is that all?? Oh of course, that is just the averager percentage...

This is London: Homeowners will lose 20,000 by next Christmas as house prices drop 10%

Homeowners will lose 20,000 by next Christmas as house prices drop 10% Glimpse of the future: A slump in the housing market is indicated after ten years during which prices have doubled An average of 20,000 will be wiped off the value of every home by next Christmas, it is claimed today. This will be the effect of a 10 per cent fall in property prices compared with their peak in August, say analysts.

Posted by bufferbear @ 01:00 AM 20 Comments

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