May 2009 Archive

Saturday, May 30, 2009

Paul Krugman on inflation

New York Times: The Big Inflation Scare

Suddenly it seems as if everyone is talking about inflation. Stern opinion pieces warn that hyperinflation is just around the corner. And markets may be heeding these warnings: Interest rates on long-term government bonds are up, with fear of future inflation one possible reason for the interest-rate spike. But does the big inflation scare make any sense? Basically, no — with one caveat I’ll get to later.

Posted by jimj @ 08:27 PM 4 Comments

It sounds more like it...

Bloomberg: London Luxury-Home Prices Decline 20% as Banking Jobs Are Cut

London luxury-home prices fell about 20 percent in May from a year ago as job cuts in the financial- services industry reduced demand, Knight Frank LLP said. Prime residential properties have lost value on an annual basis for 11 straight quarters and won’t recover until the second quarter of 2010, according to Knight Frank. Prices will probably fall by a total of 30 percent from the market’s peak in March 2008, the broker estimates. “We are approaching the back end of the price declines,” said Liam Bailey, Knight Frank’s head of residential research, by telephone. Property values won’t return to the levels reached last year until 2014 at the earliest, he said.

Posted by attila @ 04:03 PM 1 Comments

Another article on nationwide/RICS

Financial times: Evidence mounts to suggest worst is over

Chris Giles discusses the latest Nationwide & RICS figures "Is a bottom to the housing downturn in sight? Latest figures from the Nationwide Building Society, showing that house prices rose in two of the past three months, mean the question can be asked with a straight face for the first time in well over a year. " Capital Econics quoted, as usual. New think tank/consultant media types Fathom Financial Consulting quoted as well.

Posted by hmm @ 10:14 AM 24 Comments

Mortgage Rescue Flop

Telegraph: Mortgage rescue plan accepts just two families

The Government has been derided after it emerged that its £285m scheme to rescue families from having their homes repossessed has been taken up by just two households since it was set up at the start of the year. According to the DCLG, more than 1,000 families had approached local authorities with mortgage difficulties each month, but many did not qualify for the scheme, which is designed to target those who would usually qualify for homelessness support.

Posted by alan @ 08:17 AM 4 Comments

Trouble in paradise?

The National: Dubai Homeowners on the offensive

So you bought your overpriced apartment, its now worth 40% less than 4 months ago, you are living on a building site cause you believed the marketing images (:@( and now you gotta pay £5000 a year on fees for rubbish services!!!???

Posted by brickormortis @ 05:43 AM 0 Comments

The Times spins a yarn for weekend readers

Times: Gazumping is back as house prices rise and buyers fight over fewer properties

Unbelievably spun and manipulated catchline from the times with no credible source or basis quoted other than 'estate agents have reported'. Delve deeper and hidden gems contradict the title such as the Natiowide stating that further falls are expected and that 'a large proportion of buyers have been cash-rich investors buying distressed and repossessed stock, or homeowners with a lot of equity wishing to trade up'. Ultimately a housing market without first time buyers is an unsustainable one.

Posted by enuii @ 12:06 AM 13 Comments

Friday, May 29, 2009

Gold severely undervalued...

The Market Oracle: U.S. Gold Reserves, Going or Completely Gone?

'No credible audit of the Sovereign U.S. Gold Reserve will EVER be allowed – because the gold is simply not there.' Confirms what I have always thought, there is no alternative to holding physical gold. Don't bother with the ETF's.

Posted by hpwatcher @ 09:33 PM 16 Comments

Deflation continues, house prices keep falling

NY Times: The Big Inflation Scare

Why all the talk of inflation... wages fall, so prices fall, so profits fall, so wages fall... All the hyperinflation talk is pure gorbals - tell someone inflation will be like Zimbabwe, and they believe there must at least be inflation.

Posted by tomski @ 06:39 PM 0 Comments

Advice to American boomers - bit late perhaps

Yahoo News, Market Watch: Retire Debt-Free

Interesting to see an article advising people to try and retire debt. Clearly the worm has turned in the US and now people are now being steered back to living within their means. How long will it take for this to catch on in the UK --------- "Yeh I plan to retire debt free, I've got meeself some Buy to Lets." - "Doh!!!!!!!!!!!!!"

Posted by mike livingstone @ 02:54 PM 0 Comments

It doesn't seem that it will take much to push the US over the cliff edge.

Bloomberg: Bond Vigilantes Confront Obama as Housing Falters

For the first time since another Democrat occupied the White House, investors from Beijing to Zurich are challenging a president’s attempts to revive the economy with record deficit spending. Fifteen years after forcing Bill Clinton to abandon his own stimulus plans, the so-called bond vigilantes are punishing Barack Obama for quadrupling the budget shortfall to $1.85 trillion. By driving up yields on U.S. debt, they are also threatening to derail Federal Reserve Chairman Ben S. Bernanke’s efforts to cut borrowing costs for businesses and consumers.

Posted by flintster1994 @ 02:41 PM 3 Comments

Why it's still not time to buy property

MoneyWeek: Why it's still not time to buy property

"For a real recovery to get going now a very large number of people need to have five things: a job; a firm belief that they will still have a job in five years even as unemployment rises over three million; a conviction that you can’t lose in the long term with bricks and mortar; a good £20,000 as a deposit; and most importantly of all, the ability to get a mortgage. Know many people like that? Nor do I." Good on you Merryn (although in the Sevenoaks area there seems to be a few stupid people of that description...)

Posted by jvm @ 02:19 PM 8 Comments

Tax led revolution - or are we just going to roll over?

The Renegade Economist: Weekly Talk Show

Land Reform v's Monetary Reform The home-owner is the new aristocrat. The need for a massive tax shift but A call to stop punishing productive people. Dissent and diagnosis from those folks at The Renegade Economist

Posted by neo-serf @ 01:03 PM 4 Comments

Down 15% is like the new flat

MarketWatch: Yahoo's new CEO talks tough, holds ground

Since Bartz was named CEO in January, Yahoo's financials have not yet greatly improved. But she said the company is doing well despite the recession. "We are down 13%. Down 15% is like the new flat, I think we are doing great in this economy."

Posted by refusetobuy @ 12:48 PM 0 Comments

Give me strength!

Mailonline: House prices continue to creep up... but recovery isn't certain yet, say experts

If you do nothing else today read "Racheal, West Midlands" comments! 'An independent estate agent valued my property last weekend. He valued it £21K less than what I paid for it 2 years ago. I know the market has SLOWED but it hasn't slumped that much, particularly in the area I live in'.

Posted by tim miller @ 12:43 PM 1 Comments

How the news would look if not for ramping

Guardian: Fears grow of house prices spiral

Patrick Collinson imagines what house price stories might look like if Britain wasn't under the sway of estate agents

Posted by sybil13 @ 12:42 PM 8 Comments

House prices to continue to fall (Capital Economics)

FT: House prices rise in May, but more falls expected

House prices rose for the second time in three months this month, climbing 1.2 per cent. The May hike reduces the annual rate of house price decline to -11.3 per cent. In April house prices were down on an annual basis by -15 per cent, after house prices fell by 0.3 per cent last month (April). The three-month on three-month rate of change – thought to be a smoother indicator of short-term price trends – rose from -3 per cent in April to -0.5 per cent in May and now stands at its highest level since January 2008.

Posted by jack c @ 11:19 AM 0 Comments

Can money printing be limitless?

Telegraph: Bond markets defy Fed as Treasury yields spike

The US Federal Reserve may soon be forced to launch fresh blitz of quantitative easing whatever the consequences for the US dollar, or risk seeing economic recovery snuffed out by the latest surge in long-term borrowing costs.

Posted by flintster1994 @ 10:08 AM 20 Comments

Rampalicious Rightmove Report!

Rongmove: What does the rise in London asking prices REALLY mean to sellers?

Apologies to all, but I only post this bilious BULLTURD to raise a not-entirely-cynical question: with conspicuous marketing-tastic terms of "HPI" and "campaign" embedded in the URL, plus that beautiful image at the top of the article (very Brass Eye!), could some maverick marketing man be deliberately creating SATIRE??

Posted by james in london @ 09:03 AM 0 Comments

Brainwashed into Blaming the Banks for Everything We Plunder ON

Write About Property: UK Housing Market: What's Really Behind Record Low Mortgage Lending

The Royal Institute of Chartered Surveyors was quick to comment on the figures; highlighting the rise in new purchase mortgages and the fact that mending is still at very low levels. RICS put this down to the fact that the money injected into the banking system by the government isn't taking effect yet, and the bank's still employing restrictive lending policies. No one seems to be taking into consideration the fact that mortgage lending might be so low, because...

Posted by problem pete @ 09:02 AM 0 Comments

In the interests of editorial balance

Bloomberg: UK House Prices Jump in May

Not significant in any sense as the HPC story will play put over years but still it is incredible how a picture of economic recovery is being painted and bought. Sterling which has swept everything before it this past month up again today and seeming unstoppable. Stocks rallying

Posted by bellwether @ 08:15 AM 44 Comments

Still not quite five-year-negative.

Nationwide: May House Price Index

Average price £154,016. Average price May 2004 was £149,000.

Posted by mark wadsworth @ 07:52 AM 7 Comments

Thursday, May 28, 2009

US attempt to control rates failing

Mish: Mortgage market locks up

(stick rattles in bucket) pig-hooey ! "Yesterday 10 year treasury yields went soaring and the mortgage market literally seized up.", this is the US. The plan doesn't seem to be working."Lastly, consider sentiment -- this is a real killer. This massive rate spike may have invalidated hundreds of billions spent to rig the mortgage market literally overnight."

Posted by stillthinking @ 08:35 PM 19 Comments

Something the FSA might have got right, they expect 50 % falls in house prices

Reuters: UK bank stress tests assume 50% house price fall

LONDON, May 28 (Reuters) - Britain's financial regulator said the tests it uses to gauge banks' capital strength assume house prices will halve and GDP shrink 6 percent in the current recession, making it the country's worst for more than 60 years. Publishing details of its "stress tests" for the first time, the Financial Services Authority said they assumed unemployment peaking at 12 percent, and no growth in the economy until 2011. The tests also factor in a 60 percent peak-to-trough slump in commercial property values, outstripping the assumed 50 percent drop in residential prices.

Posted by gone-to-colombia @ 08:15 PM 4 Comments

Sorry, runoutacash at the mo!

Investor's Chronicle: Bradford & Bingley defaults on Pibs interest

The price of Bradford & Bingley's perpetual subordinated bonds (PSBs) has been discounting such an event for months, but it's still a shock when it happens. The government-owned lender has said it will not make the July payment on 50m worth of 11.25 per cent PSBs. Interest on this instrument is cumulative, so it's possible that investors will get at least some of their money eventually. The lending business of the former mutual - the savings part was sold to Spain's Santander - is in wind-down mode. Its 40bn mortgage book will be progressively run-off, and once that process is complete, it is the company's intention to start repaying creditors

Posted by alan @ 05:07 PM 1 Comments

Time to 'fix'

Bloomberg: Mortgage Rates Cloud Risk Appetite Return, Credit Suisse Says

A jump in interest rates on typical new U.S. mortgages to the highest since February may end a two-month-old rebound in risk appetite, according to Credit Suisse Group analysts. Rates on 30-year loans climbed 0.37 percentage point to 5.34 percent yesterday

Posted by mountain goat @ 04:48 PM 0 Comments

Excellent Chart of Income

BBC: How does your pay compare with an MP's?

The BBC show a chart of income distribution which shows how the average is arguably less than we think, in that it is pulled higher by the long tail. Its amazing to see this compared to asking prices on Rightmove. Today I saw a detached house for 450,000 (18.5x salary) with only two bedrooms and less floor space than a 1 bed flat I once rented. What I find more amazing is that when you talk to people about this lunacy they have such a hard time seeing the problem. I would LOVE to see an earnings multiple per sqm legally displayed against each home - a proper side-by-side comparison of ripoffitude. More than that, I'd love to see at the start of The Apprentice; "..and a six figure salary, where Sir Alan's Apprentice could afford a 3-bed semi. Wooo." Wunch of bankers.

Posted by lukeskywalker @ 03:34 PM 3 Comments

You can't go wrong with bricks & mortar...

The Independent: Dubai property scandal claim emerges amid media blackout

"A major property development firm with links to the ruling family of the UAE city-state, and the firms marketing agency, are accused by investors, many of whom are UK citizens, of obtaining millions of pounds through the use of false construction photographs." Part of me sympathises with people who may (will?) lose their money. On the other hand, if you're willing to part with your money based on what you see in a glossy brochure, perhaps you deserve it...

Posted by papabear @ 02:06 PM 5 Comments

A catalogue of failures ...

Money Marketing: FSA's time is up

...It has failed completely yet no one has been made to walk the plank and no serious reform is contemplated. In fact, worse, more of the same seems to be the order of the day. Since this failed system of regulation, we have seen all sorts of failures - Equitable Life, NPI, split caps, missold pensions and a banking collapse. Political and media pundits argue that there is not enough regulation. No, we need fewer regulations, the return of sensible caveat emptor and an acceptance that financial services is not an exact science. (Written by Godfrey Bloom, Ukip MEP and former IFA).

Posted by mark wadsworth @ 01:25 PM 11 Comments

Not such a great recovery..... UK retail sales fall in May

''Retail sales fell in May following a robust performance a month earlier, but still remain surprisingly strong compared to other parts of the economy. In the first half of May, 31 per cent of retailers said year-on-year sales volumes were up, while 48 per cent said they had fallen, according to the CBIs monthly survey of distributive trades.''

Posted by hpwatcher @ 12:37 PM 6 Comments

One from yesterday House Prices: What next?

RICS predict falls of 30% but Rightmove say prices have risen four months in a row.

Posted by will @ 11:27 AM 10 Comments

Rent Price Crash over?

BBC: Downward trend in UK rents 'ends'

Typical UK rents remained unchanged in May after nine consecutive months of falls, according to a property website. The average asking rent remained at 819 a month, said, although this was still 5.5% lower than the same month a year ago. A rising supply of flats meant these were becoming cheaper to let, in contrast to houses. Every area of the UK has seen average rents fall in the past year, the survey of 414,000 properties suggested.

Posted by little professor @ 11:25 AM 27 Comments

They manage to put a positive spin on nuclear annihilation - brilliantly observed!


A GLOBAL nuclear war followed by a new dark age of terror and despair could further depress the UK housing market, according to the Halifax. But Tom Logan, deputy director of the Association of Mortgage Lenders, insisted there would almost certainly be opportunities for young, professional couples who were not coughing up too much blood.

Posted by bricksnmortarhaha @ 10:50 AM 0 Comments

UK bank stress model sees house prices down 50 pct

FT: FSA releases not-so-stressy-test methodology

Hot off the wires at the FSA - the shock announcement of the much-speculated upon UK stress-test methodology. The highlights: Britains stress-tests presumed a fall in GDP of over 6%, unemployment at just over 12%, a 50% peak-to-trough fall in house prices and a 60% fall in commercial property prices. The tests assume no return to growth until 2011. Under the doomsday scenario, the FSA looks at the average house price falling from 186,000 to 93,000. However, the FSA says it won't disclose individual bank stress tests results.

Posted by little professor @ 10:43 AM 5 Comments

Welcome back 95% mortgages Innovative 95% mortgage from Lloyds TSB

95 % mortgages are returning slowly. This does seem like a good mix of responsible lending with good rates.

Posted by kaz @ 09:39 AM 19 Comments

More Mad Lending?? But Why?

MSN: Co-op mortgage sparks revival hopes

So it is all good for mortages - this is the best positive nbews they can ome up with!!

Posted by waitingfor hpc @ 09:06 AM 2 Comments

Manufacturing going to wall

BBC: Concerns grow over Vauxhall jobs

There you have it folks. UK PLC has decided to let UK manufacturing go to the wall, as it has decided the Laundry Firms in the City and their "skilled" workers are more valuable to this country ... oh no, they're all deciding/threatening to move to Switzerland.

Posted by doomwatch @ 08:42 AM 3 Comments

Gimme, gimme, gimme!!!

BBC: Uncertainty 'keeps borrowing low'

Two first paragraphs sum it up nicely: amount borrowed in April lowest for years, but borrower numbers increased slightly, making the perfect combination... less money lent to more people??? do the maths!

Posted by old_traveller @ 08:16 AM 1 Comments

If they are now admiting to 35% falls by the end of the year expect more ....

FT Adviser: Mutuals Braced for Drop in Property Prices

About 39 per cent of bosses polled predicted house prices would fall between 5 per cent and 10 per cent this year and a further 29 per cent forecast a drop of between 10 per cent and 15 per cent I assume the other 32% did they predict the unprintable? I just love the fact that they are predicting only a futher 0.8% in 2010, Ho Ho Ho! But good news by the end of the year Building Societies are expecting a 300000 property to be valued at 195000. What are sellers waiting for , to sell when the market has bottomed?

Posted by sybil13 @ 07:21 AM 7 Comments

Wednesday, May 27, 2009

Misleading claims from a builder - well I never St Modwen slammed for misleading eco-town ad

They promised 4700 jobs, 6000 homes for stratford built on brownfield land and a bypass but could not back any of their claims with evidence. In response, St Modwen and The Bird Group claimed they thought the language was standard and that it would be understood by the public that the claims did not represent factual certainties.

Posted by enuii @ 11:24 PM 0 Comments

Latest US news

Mortgage News Daily: MBS SUPER MEGA ALERT: End Of The World As We Know It?

Ever been to a public pool when someone notices something floating in the water that shouldn't be? Basically, Bill Gross dropped one of the aforementioned last week with AAA credit concerns. This has sparked a now 4 day selling spree that is kicking into high gear before our eyes. EVERYONE, servicers, originators, banks, insurance funds, hedge funds, sovereign wealth is getting out of the pool for a water change and decontamination.

Posted by devo @ 08:29 PM 6 Comments

Re-inflating a busrt bubble?

Bloomberg: Mortgage-Bond Yields Soar, Jeopardizing Feds Housing Effort

The Fed, seeking to use lower home-loans rates to stem the housing slump and bolster consumers, said March 18 it would increase its planned purchases of so-called agency mortgage bonds by $750 billion, to as much as $1.25 trillion, and start buying government notes. Rising mortgage-bond yields, driven higher in part by climbing Treasury rates, means the Fed now faces a challenge to its ability to sustain low mortgage rates, according to Jeffrey Rosenberg at Bank of America Corp.

Posted by yoss @ 06:45 PM 0 Comments

Stanford Kurland to float a venture which repackackage delinquent mortgages.

Reuters: Firm of ex-Countrywide boss files for $750 million IPO

PennyMac Mortgage Investment Trust, an investment firm run by the former president of Countrywide Financial Corp, has applied to raise about $750 million in an initial public offering, according to a filing with the U.S. Securities and Exchange Commission. PennyMac, which plans to operate as a real estate investment trust, according to the filing late on Friday, will buy residential mortgages held by homeowners behind on their payments. It plans on modifying the terms of their loans, making a profit by selling off those loans once their credit quality has risen and made them more valuable. ** I'll give him one thing, he knows how to ride the cycle! **

Posted by 51ck-6-51x @ 06:26 PM 3 Comments

Faber Predicts hyperinflation in US.

Bloomberg: U.S. Inflation to Approach Zimbabwe Level, Faber Says

May 27 (Bloomberg) -- The U.S. economy will enter hyperinflation approaching the levels in Zimbabwe because the Federal Reserve will be reluctant to raise interest rates, investor Marc Faber said.

Posted by flintster1994 @ 03:39 PM 14 Comments

B&B default.

Bloomberg: Bradford & Bingley to Skip Subordinated Bond Interest

May 27 (Bloomberg) -- Bradford & Bingley Plc, the U.K. mortgage lender taken over by the government, said it wont make interest payments on 325 million pounds ($520 million) of subordinated bonds. The bank will skip payments due in either June or July on 50 million pounds of 11.625 percent perpetual notes, 125 million pounds of 6.625 percent bonds due 2023 and 150 million pounds of floating-rate securities due 2054, according statements sent after the market closed yesterday.

Posted by flintster1994 @ 03:25 PM 6 Comments

Says it all really

Market Oracle: UK Housing Market Will Not Bottom Before 2012

For you engineering types - i found this both entertaining and tragic at the same time.

Posted by techieman @ 01:58 PM 16 Comments

"Increase in mortgage approvals vital to lift the housing market out of its depressed state"

FT: Mortgage lending reaches lowest level for 8 years

Mortgage lending from the high street banks reached its lowest level for eight years in April to stand at just 2.7bn, however, there were more promising signs for mortgage approvals.According to the latest figures from the British Bankers' Association (BBA), gross mortgage lending was down 52.4 per cent on the same period in 2008. It has also dropped from 8.7bn in March to 7.9bn in April. Although the BBA added that mortgage approvals for house purchases increased by 4 per cent over the month, from 26,671 in March to 27,685 in April, implying a faint sign that the house purchase side of the market may be stabilising.

Posted by jack c @ 01:57 PM 3 Comments

But what does RECOVER mean?

Bloomberg: Nationwide Says U.K. House Prices Wont Recover Until 2010

Nationwide is saying prices will continue to fall all this year "at least" , but what does RECOVER mean to the average person in the street? This article speaks of further falls of 14% , if you couple that with the falls already happened you have nearly 40% falls, but do you think people GET THAT BIT? That is the market when it has bottomed will start to recover, in as much as it will start to function again with property prices down 40 % +? That is 300000 property 180000 ? And do you think they understand that property is ONLY go to go back up in line with wages ? I am not sure people get this bit because if they did sellers would not be thinking "oh I will rent to next year". I assume sellers are not saying "I will rent to next year until prices are down 40% +"

Posted by sybil13 @ 12:49 PM 26 Comments

UK House Prices Summer Bounce an Illusion

The Market Oracle: UK House Prices Summer Bounce an Illusion

The recent up-tick in house prices in UK was a glimmer of hope, I'm sorry to say that I think that's a false dawn.

Posted by nadeem walayat @ 12:00 PM 8 Comments

45% of mortgages were dodgy

BBC News: Tougher rules to ban 'liars' loans'

Slightly old story this one, but seemingly missed until now. Would anyone have taken out a liar loan if their income had really been adequate? Looks like a timebomb in waiting, when interest rates take off..

Posted by uncle tom @ 11:36 AM 10 Comments

Good news!

BBC News: Uncertainty 'keeps borrowing low'

It's good news. After years of unsustainable borrowing, there are clear signs that consumers are trying to live within their means - except this is presented as a bad news story..

Posted by uncle tom @ 10:34 AM 5 Comments

Dollar's slide hurting foreign investors

Investment Postcards: Dollar's slide hurting foreign investors

With the US dollar trading at a five-month low, spare a thought for non-US investors invested in US stocks and bonds. Will the greenback turn out to be the Achilles heel of the US economy? The link is:

Posted by prieur du plessis @ 10:22 AM 0 Comments

Your future mortgage? You can choose between HBOSLloydsTSB or Santander! MONOPOLY!

BBC News: Name change for High Street banks

Spanish banking giant Santander is to rebrand all of its major UK High Street brands - Abbey, Alliance & Leicester and Bradford & Bingley.

Posted by flintster1994 @ 10:12 AM 23 Comments

Disappearing 'wealth'

Bloomberg: U.K. Millionaire Club Shrivels by Half on Housing, Bonus Slump

"The financial crisis cost British households 1.9 trillion pounds of their wealth since July 2007, according to a report in March by PricewaterhouseCoopers LLP. With the property market extending its slump and the economy mired in a recession forecast by the government to be the worst since World War II, the number of millionaires may keep falling this year." It's a pity they don't break that down into components. "Britains millionaires, who more than doubled in number between 2003 and 2007 as property prices soared, have seen their wealth drop by almost a quarter in the past year, the CEBR said."

Posted by quiet guy @ 07:44 AM 9 Comments

Errr....isn't that called valuing risk

Daily Telegraph: Banks accused of exploiting mortgage customers as profit margins rise

Typical dumb article moaning about banks exploiting mortgage customers. How come is base rates are so low that banks are still charging 4.63% for an average fixes rate deal? I think the answer is that banks are now evaluating risk.

Posted by mike livingstone @ 07:38 AM 0 Comments

Tuesday, May 26, 2009

Darling taken all delusional again

Telegraph: Treasury warns of 70bn hole in Budget forecasts

A survey of 20 independant economic forecasts conducted by the Treasury predicts that over the next four years the total borrowing figures will be 72.7bn higher than predicted by the chancellor just 1 month ago, equating to 2,000 in extra borrowing for every taxpayer in the country.

Posted by enuii @ 10:19 PM 3 Comments

Not everybody is worried about the property market

Telegraph: Property market: Tis the season to be jolly

A rather good attempt to talk up the market. I can understand why an article like this might tempt somebody onto the ladder. The estate agents are fighting back!

Posted by quiet guy @ 09:19 PM 13 Comments

Green shoots that definitely have no roots

FT: London house prices could fall a further 18%

House prices will fall by further 14 per cent over the rest of the year with an additional fall of up to 3 per cent in 2010 despite the recent talk of green shoots of recovery. Meanwhile, values in central London could decline even further, by up to 18 per cent by the end of the year, according to Jones Lang LaSalle's latest UK Residential Market Forecast. James Thomas, head of Jones Lang LaSalle's residential investment team, said: "It is important to remember that the recent green shoots of recovery are still very green. The UK economy is still in dire straits and it is unlikely that the full impact of declining employment has yet to hit the housing market.

Posted by jack c @ 05:42 PM 3 Comments

One to foam at the mouth over I suspect

Bloomberg: US Consumer confidence soars

I mean really WTF does "confidence" have to do with it, is the consumer earning more, can the consumer continue to leverage up seem more sensible and objective measures but instead the market rallies MAJORLY on this news . Seems confidence was last this high in September.

Posted by bellwether @ 04:06 PM 13 Comments

Currently 23% so nearly 40% by the end of the year

Telegraph: UK house prices set to fall a further 14pc by end of 2009

The headline starts off well but then we have, "Mortgage lending rose by 29pc in March 2009 ", failing to report that CML figures confirm they FELL in April nearly 9% , down nearly 60% on April 2008 . Article quotes Rightmove's ASKING price, which even Rightmove's Director said "is more bad news than good", given that he has been saying since January that sellers needed to reduce 25 - 30% from peak. But more importantly we really must redefine the word " recovery" , recovery DOES NOT MEAN BACK TO 2007 but back to sustainable lending levels. When sellers rent waiting for the market to pick up do they consider that once prices have fallen 40% how long it will take to get back to 2007 levels? This year is the last year sellers will get anything like at 2007 price for a couple of decades

Posted by sybil13 @ 02:17 PM 6 Comments

Japanese Style Deflation For the UK?

The Renegade Economist: Renegade Economist Talk Show

House prices, hyperinflation and how to become an export nation again....

Posted by neo-serf @ 01:54 PM 3 Comments

Wakey, wakey - seems like HMRC may have finally woken up!

Daily Telegraph: MPs' expenses: new inquiry into MPs' tax affairs

Seems like HMRC has finally woken up and is considering investigating MP tax affairs. Don't hold your breath though - HMRC only goes after the little guys as they do not have the resources to defend themselves. I can imagine the meetings in HMRC - but are MP's supposed to pay tax? I thought they were exempt. Perhaps we ought to clean up HRMC as well as MP's. First, they can start by closing down the special unit that deals with MP tax affairs - lets face it they haven't been doing much recently. Secondly, they can publish their own expenses on the internet - if they don't then I suspect, when they let the case fails, the public may also feel that HMRC have their hands in the till as well.

Posted by who stole my pension? @ 01:20 PM 0 Comments

Is this the best the bulls can do?

Financial Times: Richard Donnell: The bullish case for property

The Director of Research at Hometrack predicts: "With further modest adjustments to prices at the lower end of the market, house prices are likely to have largely bottomed out within the next 12 months." After admitting the strength of the bearish position: the outlook for the economy unemployment the availability of mortgage finance, he puts forward three factors why "price falls may not be as bad as the most bearish forecasts" ie 50% drop from peak. 1. Owner occupiers set prices. (???) 2. Only when.first-time buyers feel confident to enter the market in significant numbers will there be a recovery. (???) 3. Rapid contraction in housing market liquidity (???). Can anyone see any logic here? Bulls please explain.

Posted by live4ever @ 01:07 PM 2 Comments

The more they dig, the uglier it gets ...

BBC: HBOS loan irregularities alleged

A BBC News investigation has uncovered alleged lending irregularities at HBOS, the bank now owned by Lloyds. File on 4 has heard from firms that claim they were ruined by the actions of a senior executive, and management consultants recommended by the bank. The bank and management consultants Quayside Corporate Services have denied any wrongdoing. The loans from HBOS's "high risk" unit between 2002 and 2007 are said to have led to losses at the bank of 250m. File on 4 heard from businesses alleging that a bank executive, Lynden Scourfield, required them to employ consultants Quayside Corporate Services as a condition for getting a loan.

Posted by mark wadsworth @ 11:34 AM 0 Comments

D for Debt

Telegraph: German debts set to blow 'like a grenade'

Germany's financial regulator BaFin has warned that the toxic debts of the country's banks will blow up "like a grenade" unless they take advantage of the government's bad bank plans to prepare for the next phase of the crisis. Jochen Sanio, BaFin's president, said the danger is a series of "brutal" downgrades of mortgage securities by the rating agencies, which would eat into the depleted capital reserves of the banks and cause broader stress across the credit system.

Posted by alan @ 07:49 AM 13 Comments


Daily Mail: Housing bubble begins to burst across the globe

Anyone who is under the impression that Britain was alone in suffering a housing crash should think again. The global financial collapse has sent dozen of the world's property hot spots into deep freeze, research shows. Latvia and Dubai have suffered the biggest housing crashes of any country worldwide, with values tumbling by a third over the last year following the implosion of speculative bubbles. Singapore and the US follow in 3rd and 4th place, suffering declines of 23.8% and 16.9% respectively. Britain lies in fifth place with a 16.5% decline. In contrast, prices in Israel and the Czech Republic have surged

Posted by little professor @ 12:06 AM 20 Comments

Monday, May 25, 2009

Where will growth come from?

Telegraph: What's the commercial driver of the economy going to be if it's not financial services?

If financial services are no longer going to rule the roost as the economy is "rebalanced" and we are all going to live in a Gordon Brown's new world order of capitalism exactly what commercial activity is going to drive the economy out of recession and back to long term trend growth rates?

Posted by devo @ 11:25 PM 28 Comments

But ...we only ripped them off a little!

Bloomberg: Bank of America Revises 64,000 Loans After Pact With States

BoA, the largest U.S. bank, modified more than 64,000 home loans for borrowers between December and March after settling charges over predatory lending in an agreement with 42 states.

Posted by alan @ 09:43 PM 8 Comments

This could have been written by one of us

The Herald: Curb property addiction to avoid another disaster

There is too much to comment on everything here. I have selected a quote at random but suggest reading the whole thing if you have a little time to spare: "I spoke to a friend last week who said that his 1500 a month mortgage has now fallen to 600. He feels a bit embarrassed by this, since there are a lot of people who seem rather more deserving of a 900 a month bung. Our addiction to property must be curbed if we are to avoid yet another disastrous bubble. Property must be taxed like any other investment, like shares or savings - there is no rational justification for its exemption."

Posted by quiet guy @ 09:36 PM 8 Comments

Lenders try and make vast profits by lending money to the stupid....

BBC News: 'Loan sharking comeback' warning

"A growing number of people in the UK are likely to use loan sharks during the recession, according to a local government think-tank." Are they talking about RBS, Northern Rock etc etc etc.?

Posted by thecountofnowhere @ 09:01 PM 1 Comments

Oh dear, 'ow sad, never mind.

Daily Mail: Building societies fight to the death, and only the strong will remain

This is a sector in real financial crisis. Most of the remaining 53 societies have seen profits slashed over the past year, mainly through exposure to failed Icelandic banks, coupled with bad debts resulting from a severely depressed property market. Some even reported 2008 losses --previously unknown in a sector renowned for its prudence and conservatism. Things are going to get worse before they get better.

Posted by devo @ 08:24 PM 4 Comments

Whatever happened to the Bricks Chicks ?

Times: The Bricks Chicks: housing market confidence and commuter hotspots

Does anybody care about the apparent demise of these video nasties ?

Posted by doomwatch @ 07:47 PM 0 Comments

Council tax jinks

Telegraph: Hundreds of thousands overcharged in 'council tax cover-up'

Article about corrections to council-tax banding being suppressed by ministers in order to maintain revenue. "the state conspires to overcharge the public. " . Quite. Anyway, the whole country is heading for council tax banding downgrades, but I am guessing, we are not heading for council tax reductions...which could be a bit awkward as tax on the lower bands will have to rise.

Posted by stillthinking @ 11:47 AM 13 Comments

Yes, falling house prices need to be stopped to give FTBs some hope of buying at inflated prices

Independent: Buyers seeking first home are giving up hope

The housing market remains mired in recession because seven in 10 first-time buyers have given up hope of ever owning their own homes, a leading property analyst said today. Peter Bolton-King, a former head of the National Association of Estate Agents, accused the Government of doing little to help first-time buyers into the market and at the same time undermining the chances of a housing recovery. With banks still refusing to lend and the Government doing practically nothing to help first-time buyers, its little wonder so many people have given up hope of every owning their own home, said Mr Bolton-King, now chief executive of the National Federation of Property Professionals.

Posted by little professor @ 10:11 AM 44 Comments

Time to buy that place in the sun?

Financial Times: Property price fall lures investors to Europe

Sharp price falls in European property hotspots and a gradual strengthening of the pound are luring cash-rich UK investors back to the continental mainland just in time for summer.Foreign exchange providers and estate agents are reporting revived interest from cash-rich Britons looking to snap up holiday homes in popular locations across France, Spain, Italy and Portugal.

Posted by live4ever @ 07:39 AM 2 Comments

The world must be ready for H1N1 swine flu to become more severe and kill more people,

REUTERS: WHO chief warns H1N1 swine flu likely to worsen :

The world must be ready for H1N1 swine flu to become more severe and kill more people, World Health Organization chief Dr. Margaret Chan said on Friday.The WHO is poised to declare a full pandemic of the virus, which has infected more than 11,000 people in 42 countries and killed 86. And U.S. health officials released $1 billion for companies to get started on a vaccine in case it is needed.

Posted by chris @ 04:33 AM 4 Comments


Telegraph: US bonds sale faces market resistance

The US Treasury is facing an ordeal by fire this week as it tries to sell $100bn (62bn) of bonds to a deeply sceptical market amid growing fears of a sovereign bond crisis in the Anglo-Saxon world.

Posted by devo @ 12:58 AM 8 Comments

Sunday, May 24, 2009


Daily Kos: Inflation From Money Creation Isn't A Problem

Another deflationary article based on collapse in velocity. There is an interesting suggestion at the bottom that bankers are unlikely to extend loans irrespective of how much cash is pumped in, because they could get caught with their pants down when ensuing attempts to drain liquidity back out force them to accept securities in exchange for cash, and suddenly they have a capital problem again. This does credit bankers with acting with much more foresight than usual though...However, it is a good point, if as a bank I have no money, lots of illiquid assets(! ahem), and the gov. ->temporarily

Posted by stillthinking @ 06:12 PM 13 Comments

Over the moon Brian

FT: Top tax to force up Premier League pay

This'll cheer you up the next time England get outplayed by a half-decent team. Just when you football fans thought season ticket prices were really too high. It's given me an idea though. I'll work out my tax bill and ask for a compensatory pay rise to the value of. Then next year, when I see that I still have a tax bill, I'll ask for another equivalent pay rise. Werll, I booted it and it hit the back of the net.

Posted by letthemfall @ 01:26 PM 3 Comments

Worth a listen

New York Review of Books [mp3]: The Economic Crisis and How to Deal with It

Don't normally post audio files, but if you have a spare hour this one is well worth a listen. It's a recording of a panel discussion organized by the New York Review of Books, featuring a stellar line up including Nouriel Roubini, George Soros, Paul Krugman and Niall Ferguson amongst others.

Posted by little professor @ 12:34 PM 1 Comments

The BTL trade is down the drain!

Times: Landlords lose deposits as letting agents go bust

Finally, sure more regulation is around the corner. Bankruptcies will force liquidations. Great news!

Posted by confused76 @ 09:47 AM 25 Comments

Charging orders

Independent: In debt? You could be forced to sell your home

Conversion of unsecured debt against homes continues. Article suggests 97,000 orders a year and rising. Those in negative equity least at risk of a forced sale. Suggested that debt companies are waiting for rising house prices. Should capitulation eventually occur concerning acceptable prices, these are likely to be viewed as pre-booked auction sales. The government currently use the same tactic to recover monies.

Posted by stillthinking @ 09:38 AM 8 Comments

Nothing to see here, move along house prices are on the rise blah blah blah...

More balls from David Smith

Times: Lenders need more bottle on deposits

The insistence by lenders on reserving the best mortgage deals for those with large deposits is holding back the recovery in activity in the housing market. Everybody knows the plight of first-time buyers. The latest figures from the CML shows mortgages to FTBs averaged 75% loan-to-value ratio in March, down from 89% last year. Without a deposit equivalent to a quarter of a propertys value a years salary or more they are locked out. There are modest signs of a thaw in the mortgage market, and some lenders are beginning to offer better deals to borrowers with slightly smaller deposits. That makes sense. Many of them think the house-price falls they were protecting themselves against have nearly run their course, removing the argument for excessive caution.

Posted by little professor @ 12:35 AM 11 Comments

Saturday, May 23, 2009


Motley Fool: A Case for Stagflation

This article makes a similar case that wage inflation is not going to happen irrespective of the government stimulus and a collapse in the velocity of money and the shadow banking system. However, what then happens to the global stimulus funds? Answer proposed is that they flow into the safety of commodities creating the situation of "weak economic growth+oil/commodity price shock=stagflation".

Posted by stillthinking @ 10:38 PM 5 Comments

Wage inflation

Counterpunch: Real Lesson of the Financial Crisis

Against inflation. This article quotes Hoisington Investment's view that sufficient wage inflation will take a decade as aggregate demand slowly adjusts as aggregate supply. Further, they suggest that even if hypothetically inflation occurred immediately, without a corresponding increase in wages demand would just collapse. Also, makes the point that this is not an economic recession, rather the entire cause is front-loading bonuses at the expense of the economy.

Posted by stillthinking @ 10:32 PM 5 Comments

It's not over yet

Timesonline: Professor Robert Shiller warns Britain may suffer a double recession

For all those thinking a recovery was imminent, it's not!

Posted by tim miller @ 12:42 AM 5 Comments

Round 2 of The Great HPC coming later this year

Times: Mortgage timebomb raises fears of a new wave of repossessions

Millions of homeowners with mortgage deals that expire over the next year are in for a nasty surprise as tighter lending criteria mean that they may struggle to remortgage, experts have warned. With hundreds of thousands of borrowers already stuck on standard variable rates (SVRs), fears are growing of a sharp rise in defaults and home repossessions when the Bank of England begins to increase the cost of borrowing as early as next year.This situation is a ticking timebomb. While interest rates are low, borrowers will be fine to sit on SVRs but once rates start to rise, which we expect to happen next year, payments could become unaffordable and lead to repossession for those who cant cope.

Posted by little professor @ 12:25 AM 28 Comments

Friday, May 22, 2009

The biggest collapse of an American bank so far this year

The Telegraph: Alan Greenspan's fears ring true as Floridas BankUnited collapses

Mr Greenspan said on Wednesday night that the global financial crisis was far from over and that US banks must still raise large amounts of money before recovery can begin. There is still a very large unfunded capital requirement in the commercial banking system in the United States and thats got to be funded, he said.

Posted by devo @ 11:08 PM 1 Comments

Not good.

The Telegraph: UK GDP: inventories fall at record pace

* GDP - down 1.9pc in 3 months. * Manufacturing - biggest quarterly fall in output since records began in 1955 * Production - biggest quarterly fall in output since Q1 1974 * Compensation for employees - biggest quarterly fall since records began in 1955 * Spending by households - down 1.2pc, the biggest drop since 1980

Posted by devo @ 10:57 PM 0 Comments

1 in 10 Building Societies see property prices falling another 15 - 20%

My Finances Co uk: House prices down 10% in 2009 and down 0.8% in 2010

"A survey by the (BSA) reveals on average they predict house prices to fall ten per cent in 2009. However, one in ten see prices falling between 15 and 20 per cent and 29 per cent see property values dropping between 10 and 15 per cent" Another 20% that would be 43 % . "Falling house prices and diminished demand are expected to result in mortgage lending from building societies to fall by 22 per cent this year ". With regards interest rates:"He added the policy also restricts mortgage lending by reducing funds for lenders. " Already 2/3rds down due to RMBS market ! Loved the end, essentially saying government needs to lend more and buyers should not panic ! Why would buyers panic in a market about to fall 40%?

Posted by sybil13 @ 10:56 PM 1 Comments

Goldman Sachs tempers expectations of an imminent recovery in the UK housing market

The Telegraph: Housing market 'still has 10pc to fall'

In a comprehensive note on the housebuilding sector, the investment bank said it would be year before house prices found the bottom of the market in the second quarter of 2010. Shares in house builders have rallied so far in 2009 as the likes of as Taylor Wimpey and Persimmon completed key refinancing packages and reported improved visitor levels and sales volumes compared to the depths of the financial crisis last Autumn. However, Goldman analysts warned that, although sales volumes could rise by 12pc next year, prices will remain under pressure because of rising unemployment and the fact that property values are still well above the historical average of affordability of 3.8 times salary.

Posted by devo @ 10:16 PM 17 Comments

The Truth......


Trouble Ahead Said Freddo

Posted by freddo @ 08:22 PM 1 Comments

Reminds me of all the UK's new build flats

Blog via The Toxic Asset Base May Have Little Future Value

In the US, at least, property seen as investment has resulted in shoddy workmanship, that undermines assumptions about recently built houses regaining their former value. I can't help but wonder if we have the same problem here in the UK with recently built property.

Posted by nubbers @ 07:38 PM 3 Comments

Just print more money.

BBC News: Building societies' ratings cut

Credit ratings agency Fitch has downgraded five UK building societies amid weak economic conditions. The agency has cut the long-term issuer default ratings at the Chelsea, Newcastle, Principality, West Bromwich and Yorkshire building societies.

Posted by flintster1994 @ 06:08 PM 0 Comments

Fitch downgrades five building societies

Citywire: Fitch downgrades five building societies

Oh dear, things are getting worse and worse for our beloved building societies.

Posted by smithers @ 04:49 PM 1 Comments

A paradigm shift has begun

Market Oracle: Paradigm Shift Underway of Banking Power to Creditor Nations

A paradigm shift has begun, with banking power shifting to the creditor nations as the usdollar is supplanted, made possible by several new institutional pillars as well as newly forged alliances. The consequences are significant and will change the face of global banking and commerce

Posted by sold 2 rent 1 @ 03:15 PM 13 Comments

What if Britain loses its triple-A rating?

MoneyWeek: What if Britain loses its triple-A rating?

The potential downgrade of Britain's credit rating is more than just a technicality. So what would it mean for you if Britain ends up being downgraded?

Posted by damien @ 02:52 PM 4 Comments

Not a singing pig

Reuters: UK property: a pig that wont fly

The pig that is British property is furiously flapping its wings, but despite signs of a recovery in prices and activity, rest assured there will be no take-off. The country, which witnessed a property bubble that made the U.S. seem sober and sensible in comparison, has seen prices fall by about 20%, but still faces a tough recession, rising unemployment and serious questions about the price of financing. In the face of this, Britons seeking to sell their property last month turned again to a tactic that worked so well in the boom years: they raised prices, according to Rightmove. Forced sellers ultimately will end the standoff between asking and selling prices, as increasing unemployment and a lousy economy bring a new wave of property to the market later this year.

Posted by little professor @ 02:27 PM 3 Comments

What TALENTED people do in recessesion

BBC: Dubai's unemployed head for the beach

I always wondered how a small country with limited land, pend up demand for housing, sound foundamentals, over reliance on real estate and finacnial industry, majority of work force in non-jobs (PR, marketing, EA, motivators, advertising or just plain rich people) will cope with the downturn. So I am keep an eye on Dubai.

Posted by peter_2008 @ 12:43 PM 2 Comments

An hour's read, but a very worthwhile one

London Book Review: John Lanchester: The Banks - Its Finished

IMO, this is an excellent summation of the state of our banks. Like we've been saying for some time, this is a solvency crisis rather than a liquidity crisis - only no-one wants to admit that. Lanchester also pinpoints four reasons why the UK government is so reluctant to nationalise our banks (mostly pride and political embarrasement). He clarifies the difference between 'toxic assets' and 'toxic prices', and how the former is being used to disguise the fact that the assets are simply hugely overpriced. Finally, he also explains the principal reason the ratings agencies are taking a dim view of the UK's finances right now - the UK has effectively become the world's biggest credit default swaps trader for UK banks' bad assets.

Posted by paul @ 10:03 AM 6 Comments

Think you see green shoots? You're wrong ...

Forbes: Don't Believe The Optimists

Nouriel Roubini on 'green shoots' and the housing market in the US. He doesn't see US prices stabalising until 2011. "Beware of the nonsense about green shoots in housing: The worst housing recession since the Great Depression is still in full swing, and the yellow weeds have taken over millions of empty housing lots--and are still going. A careful and detailed analysis of the four green shoots of recovery (employment trends, retail sales/consumption, industrial production and housing) that Goldman Sachs and other proponents of the "green shoots" hypothesis have been brandishing for three months now suggests that all four green shoots are still yellow weeds."

Posted by katalan @ 10:03 AM 1 Comments

This is genius


If you liked lolcats - you'll love lolfatcats! The Hazel Blears one at the top is priceless!

Posted by (cr)ash @ 09:55 AM 2 Comments

US, UK, and Japan will go down together

Market Oracle: The Fiat Currencies Death March

Today, we are witness to a most absurd spectacle: Bankrupt nations with collapsing and contracting economies planning to re-spend themselves back into prosperity on borrowed moneyat least, thats the plan. The US, England, Japan and others are trapped in a sinkhole of defaulting debt and deflating demand, the combination of which broke global economies in the 1930s and is in the process of doing so again today. It is ironic and appropriate that England, the US, and Japan are following the same path at the same time; for the three together comprise the historical lineage of credit and power in this epoch, credit which built and whose consequent debt is now about to destroy all three.

Posted by sold 2 rent 1 @ 09:37 AM 28 Comments

You can't handle the truth

Bloomberg: U.K. Treasury Refuses to Release Stress Tests on RBS, Lloyds

The U.K. has refused to release the results of stress tests conducted on British banks. Publishing the information may increase instability and force the government to take further action to shore up the U.K. financial system, the Treasury said in response to a Freedom of Information Act request by Bloomberg News that sought the test results and criteria used to evaluate banks. Two weeks ago the Federal Reserve said similar reviews showed 10 U.S. lenders needed to raise a total of $74.6 billion.U.S regulators said publishing their findings would ease concerns about lenders. Keeping the information under wraps will only serve to create more uncertainty in the long term, Vince Cable, Lib Dem spokesman.

Posted by little professor @ 08:47 AM 15 Comments

Thank goodness for global decoupling

BBC News: China 'could face banking crisis'

Paraphrase: The banks are lending money at ever increasing rates just to insure they get it back and can appear to make a profit. Nearly a trillion dollars in 3 months!

Posted by hovelinhove @ 08:32 AM 2 Comments

Recovereh in doubt

Wall Street Journal: S&P Warning Sparks Rattle of Britain

Just when you thought it was safe to get back in the U.K. water ... The pound has soared more than 15% against the dollar in recent weeks on signs of returning economic confidence. But that rally stopped on Thursday, when Standard & Poor's threatened to downgrade the U.K.'s coveted AAA rating, putting the country on negative outlook for the first time ever. It was a reminder that the risks to the pound and U.K. government bonds remain immense. U.K. public finances are in a dire state. The government's April budget combined optimistic forecasts with a refusal to spell out how the deficit might be controlled. Government forecasts conveniently show debt peaking at 79% of gross domestic product, just under the 80% level that would usually trigger a downgrade. S&P do not agree.

Posted by little professor @ 12:27 AM 9 Comments

Thursday, May 21, 2009

Totally moneymungous, pop-pickers! Not half!

CNBC: The World's Biggest Debtor Nations

Who are the world's biggest debtor nations? The rankings may surprise you!

Posted by devo @ 10:37 PM 19 Comments

Can that include you Mr Blanchflower?

BBC News: 'One million more to lose jobs'

"We've actually had the worst month's unemployment figures we have ever seen, the largest increase in a single month, the highest percentage increase in a single month." And he warned that the situation was only going to get worse: "My view is we're going to see an average of one hundred thousand a month, at least for the end of the year, so unemployment is certainly going to rise by a significant amount, perhaps by another million, perhaps by more."

Posted by cheekie charlie @ 09:14 PM 1 Comments

The economy is strong, and we are best-placed to weather the down-turn, remember?

MarketWatch and S&P: Standard & Poor's cuts U.K. outlook to negative from stable

LONDON (MarketWatch) -- Standard & Poor's on Thursday lowered its credit outlook on the U.K. to negative from stable for the first time ever in view of the country's swelling debt, which may expand even as the economy recovers. The move by Standard & Poor's raises the prospect not only of a credit-rating downgrade in Britain but a lowering of the outlook in the U.S., which has taken a similar path of big spending and quantitative easing to escape the credit-led recession.

Posted by sneaker @ 05:59 PM 2 Comments

Huge Commercial Property Bump!

SKY: British Land Writedowns Spark Bank Fears

UK property giant British Land has seen 3.2bn wiped from the value of its portfolio, sparking new fears that banks will suffer huge losses from their commercial mortgage lending.

Posted by alan @ 05:08 PM 1 Comments

Don't panic, Mr Mannering!

BBc News: Indebted Britain

Robert Peston's view on the S&P downgrade warning for the UK. "First things first. No reason to panic." Check out some of the comments beneath the article too.

Posted by hotfoot @ 02:35 PM 4 Comments


FT Alphaville: UK bashing, dwindling asset edition

Analyst suggests that should there be a recovery it will be a creature of the "hothouse" and incapable of supporting its own weight. Plus a real terms comparison chart of equities, commodities and housing suggesting an additional drop of 40% from today.

Posted by stillthinking @ 02:09 PM 3 Comments

RICS chief economist bleats the same old message.

The Gaurdian: House prices 'close to stabilising'

Simon Rubinsohn says house prices will soon stabilise, but lending will continue to elude first-time buyers and that contrary to expectation when the credit crunch began, the London property market had been the most, not the least, buoyant in England and Wales. ** article a joke., but the comments are better.

Posted by 51ck-6-51x @ 01:11 PM 20 Comments

Return to mad lending

Daily Mail: Home help from mum and dad thanks to new account

Britain's biggest bank has waded into the battle for first-time buyers with a mortgage that allows them to tap into their parents' savings. Lloyds TSB's Lend A Hand mortgage offers first-time buyers a 95 per cent loan to value mortgage at an attractive rate of 4.39 per cent. The idea is that the buyer and their parents, grandparents or friends, who are keen to help out, pool their resources to provide a 25 per cent deposit, bringing the interest rate down significantly. But rather than give the buyer the cash, parents can retain control of the money by locking it away in a savings account that has a legal charge on it, until the mortgage has moved from 95 per cent LTV to 90 per cent LTV. Lloyds will have a hold on the money until the property owner has 10 per cent inn equity.

Posted by little professor @ 11:35 AM 16 Comments

Higher UK Interest rates on the horizon

BBC: Public borrowing hits new record

New government borrowing rose sharply in April, the Office for National Statistics (ONS) said. Public sector net borrowing rose to 8.46bn this April compared to 1.84bn in the same month last year. It was a new record for the public deficit in April, a month when government coffers are usually boosted by tax receipts. Significantly, ratings agency Standard & Poor's revised its outlook for the UK to negative due to borrowing worries.

Posted by jack c @ 11:06 AM 12 Comments

Bankrupt britain

Yahoo: Outlook on UK economy downgraded to 'negative'

The change may eventually lead to S&P downgrading Britain's top-level sovereign credit ratings, the agency warned in a statement.

Posted by mark @ 11:04 AM 3 Comments

Stupid headline - more spin on same press release

Metro: Homes blow as mortgage lending falls 9% in a month

How is that a 'homes blow'? The houses are still there, aren't they?

Posted by mark wadsworth @ 10:25 AM 9 Comments

Speculators are the real cause hyperinflation - not just the money printing

Market Oracle: Could the Weimar Hyperinflation Happen Again in America?

If Britain is already meeting a larger percentage of its budget deficit by seigniorage (money printing) than Germany did at the height of its hyperinflation in 1923, why is the pound now worth about as much on foreign exchange markets as it was nine years ago, under circumstances said to have driven the mark to a trillionth of its former value in the same period (1914-1923), and most of this in only two years? This author argues very well that speculators and private central banks are at the root of ALL hyperinflation

Posted by sold 2 rent 1 @ 10:19 AM 32 Comments

The Spring Offensive is over!

BBC: Total mortgage lending down again

The total amount of mortgage lending fell again in April, the Council of Mortgage Lenders (CML) said. The amount lent by its members stood at 10.4bn, down from 11.4bn in March, and was 60% lower than in April 2008. The CML said the drop during last month was due to a seasonal factor, with Easter falling in April this year, rather than in March a year ago. The lenders organisation played down recent suggestions that the housing market may be about to pick up.

Posted by mark wadsworth @ 10:14 AM 3 Comments

Green shoots ahoy!

Times: The housing market may just be on the turn

The affordability of property is now back near its long-term average. And the trend for prices is likely to be up. Clueless as usual

Posted by renny @ 10:11 AM 2 Comments

Wasn't this the same bunch that gave the sub prime bonds aaa+ status?

Bloomberg: United Kingdom Outlook Cut to Negative at Standard & Poors

May 21 (Bloomberg) -- The United Kingdoms outlook was revised to negative from stable at Standard & Poors Ratings Services today. The pound fell against the dollar to trade at $1.5610 and the FTSE 100 Index dropped as much as 2.7 percent.

Posted by flintster1994 @ 09:46 AM 2 Comments

Its all About Making Money from Property

Telegraph: James Purnell and Geoff Hoon avoided tax on home sales

The Cabinet minister ( Purnell) saved thousands of pounds after informing the parliamentary authorities that Manchester was his main home while the tax authorities considered London to be his primary residence. Mr Purnell claimed for a 395 accountants bill that included tax advice provided in October 2004 regarding sale of flat on parliamentary expenses which are intended to cover the costs of running an MPs office. It can also be disclosed that Geoff Hoon, the Transport Secretary, did not pay capital gains tax on the sale of his London home in 2006. (MPs had a Vested Interest in house prices always going UP).

Posted by alan @ 09:11 AM 7 Comments

Letting agents fees "out of control" says Citizens Advice

Guardian: Letting agents are ripping off tenants

"Letting agents are routinely ripping off tenants with unjustified and excessive charges, while providing a poor or nonexistent service, according to a report by Citizens Advice today. It found a range of spurious charges, with some agents demanding 275 from tenants just to check references, or more than 200 to renew a contract. Citizens Advice Bureaux are dealing with 6,000 complaints about letting agents a year, and said that the behaviour of agents is now "out of control"..." My own experience is that this is not accross the board, with some fair letting agents. Time to expose the bad apples.

Posted by mountain goat @ 08:54 AM 10 Comments

Falling rents = even further for prices to fall

Telegraph: Buy to let: double whammy for amateur landlords as flat rents fall

Rents for flats have fallen for the sixth month in row in another blow for amateur landlords who bought new build flats in the hope of making a quick killing. The supply of rental flats rose for the sixth month in a row, increasing by 2.8pc during April to be 132pc higher than a year ago. The ongoing oversupply led to a further 0.7pc fall in average rents the 13th month running in which they have declined. The high level of supply showed that it was still a tenants' market, and as a result, rents were not expected to begin rising until the second half of this year at the earliest. [This is important for house prices too. With falling rents, house prices need to fall further to bring the house price-to-rent ratio back to historical levels.]

Posted by drewster @ 01:47 AM 11 Comments

Wednesday, May 20, 2009

Article by Jim O'Neill of Goldman Sachs

Telegraph: China is preparing for a world where the yuan trumps the dollar

Do you know what a yuan looks like? If not, you had better find out. The reason is sometime in the next few years there's a decent chance you might need or want to have some.

Posted by devo @ 10:26 PM 0 Comments

Strangely familiar

The Telegraph: More banks may have to be nationalised, says IMF

The Fund believes that although the drastic measures to prop up Royal Bank of Scotland, Lloyds Banking Group and other major lenders had prevented them from collapse, more public money needs to be poured in if the economy is to get back to full strength. The alternative is a "zombie" recovery as banks continue to withhold lending for years, the IMF has told the Treasury

Posted by devo @ 09:50 PM 2 Comments

I am speechless....

Bloomberg: Mayfair Eviction Fight Pits Credit Suisse Against Investor

The two main holding companies defaulted and were placed under court administration in August, U.K. filings show, after the group bought 27,000 units of communist-era public housing in the former East Germany over three years, almost entirely with debt.

Posted by mark @ 08:45 PM 2 Comments

Its going to get a whole lot worse

Cnn: Fed's economic forecast worsens

Central bank now expects unemployment to rise to a range of 9.2% to 9.6% this year. Fed also predicts a sharper decline in GDP than it had forecast in January.

Posted by mark @ 08:03 PM 5 Comments

No losses for Goldman Sachs on derivative contracts

MarketWatch: No forcing haircuts on AIG counterparties:Geithner

The financial system still cannot withstand the failure of AIG, he said. Geithner's answer did not mollify Democrats or Republicans on the panel, who are outraged over reports that major financial institutions, including Goldman Sachs, did not take any losses on their AIG derivative contracts.

Posted by devo @ 06:38 PM 0 Comments

But it's different here!

Bloomberg: UK mortgage delinquencies worse than American suub-prime

As we all know, Britain's economy and housing market was doing just fine until those pesky yanks and their 'sub-prime' mortgage losses dragged the world into recession. We were all told there was no sub-prime in the UK. Now it turns out UK mortgage arrears are worse than the equivalent in US sub-prime. This is feeding through into repossessions. Losses are high and going higher, said Watts. The numbers are ugly, uglier than I expected.

Posted by little professor @ 06:30 PM 8 Comments

Anyone Listening?

Guardian: IMF tells Britain: next government must move fast to cut budget deficit

The International Monetary Fund today urged tougher action in the next parliament to cut Britain's record budget deficit as it warned that recovery from the recession would be subdued and gradual. IMF warns record borrowing will leave Britain vulnerable as recovery will be slower than the chancellor is forecasting. (Anyone think the IMF could step in BEFORE the next parliament?) "Although the IMF says it is up to the government to decide whether the emphasis should be on tax increases or spending cuts to reduce the deficit, it privately believes that action to cut public spending is a more effective and durable method of bringing the state's finances back to health". "Steps should also be taken to improve financial regulation, the Fund said".

Posted by alan @ 05:49 PM 13 Comments

Hear ye! Hear ye! The 'experts' have spoken

The Times: Fund managers see green shoots in world economy

Investment experts around the world believe the global economy has turned, with a sizeable majority now saying it will improve in the next 12 months. Merrill Lynchs May survey of Fund Managers has found seven out of ten investment managers are forecasting an improvement in the next 12 months and are now spending money in anticipation of an upturn by buying cyclical stocks that will gain value fastest when the economy picks up.

Posted by devo @ 05:32 PM 4 Comments

Mid-range social rents

Scotland on Sunday: Mortgage squeeze sees professionals and pensioners turn to social housing

"However, some property experts have warned that social housing initiatives could become so attractive in Scotland that they stand to harm prices in the private market." In other words, VIs don't want rents to be at a sensible level because it might deflate the bubble and keep it deflated. The way in which 'property experts' want to keep sapping young people's income from them by sky high housing costs is absolutely appalling!

Posted by tenant super @ 05:14 PM 3 Comments

First Time Buyers (?) sucked in

Mortgagestrategy: John Charcol sees sharp rise in first-time buyer activity

Confidence started returning to first-time buyers at the beginning of this year shows the John Charcol Index, the monthly mortgage activity monitor from the mortgage adviser. The index reveals a sharp increase in the proportion of purchases made by first-time buyers in the first four months of this year, with that proportion being three and a half times higher than in the previous four months. First-time buyers represented just over 4% of the market in October 2008 and 5% in December 2008. But for the first four months of 2009, first-time buyers accounted for roughly 20% of all new mortgage cases.

Posted by jack c @ 05:11 PM 1 Comments

FSA criticises the building societies

Times Online: FSA attacks building societies' handling of credit crisis

The Financial Services Authority, the chief City watchdog, has heavily criticised building societies for their fundamental errors during the credit crisis.

Posted by ash4781 @ 05:10 PM 0 Comments

Oops missed this... Prices Jump Despite Rising Time On Market

Looks like the UK housing market is heading for a second tipping point unless the time on market starts coming down. Second down leg Q4?

Posted by tinecu @ 04:25 PM 1 Comments

Affordability Salami Slicing

FT: Fixed mortgage rates start to rise

The cost of the average fixed-rate mortgage has risen in the past month even though base interest rates have been held at historic low levels.Research from shows that the average two-year fixed rate has risen from 4.61 per cent to 4.64 per cent, while the cost of five and ten-year fixed deals have increased by a greater margin. In the past few weeks Halifax, Royal Bank of Scotland and Woolwich, and a number of building societies including Britannia, Coventry, Yorkshire and Barnsley, have increased rates. Borrowers hoping to take advantage of this period of low interest rates and lock into a long-term fixed are going to be disappointed.

Posted by live4ever @ 03:37 PM 0 Comments

Landlord, where are your tenants now?

BBC Radio 1 Newsbeat: 'Boomerang' generation back home

The number of young men and women living with their parents has shot up over the last year, according to the latest figures seen by Newsbeat. The housing charity Shelter reckons the recession is to blame as people in their 20s feel less secure about their job prospects and banks want a bigger deposit from first-time buyers. An extra 111,000 16 to 29-year-olds either moved back in with their parents or decided not to move out in the 12 months to December 2008. The rise is four times the average increase over the last five years, according to the figures from the Office for National Statistics. A 2007 survey of young people across the European Union found that money was the main factor when deciding whether to leave home for the first time. [Meanwhile, a survey of bears found that woods...]

Posted by drewster @ 03:37 PM 3 Comments

This may be old news for some ... but it sounds apocalyptic to me

Property Week: Home Depot sounds US housing caution

Growing optimism over the US housing market could be premature, a retailer warned yesterday. Frank Blake, chief executive of Home Depot, said housing market signals were still mixed. 'We are concerned about the accelerating rates of foreclosures, particularly in the western part of the country,' he said, noting that one in every 54 homes in California was in foreclosure. Blake said that a slowing foreclosure rate in California during the fourth quarter had led to an improvement in regional store sales but the trend had then reversed as foreclosure rates rose again in the first quarter. ONE IN FIFTY FOUR???

Posted by mark wadsworth @ 01:44 PM 7 Comments

Housing Supply may increase

BBC: More Eastern Europeans leaving UK

The number of Eastern Europeans leaving the UK doubled in the year up to September 2008, officials have said.

Posted by george monsoon @ 01:06 PM 6 Comments

Las vegas has its own David Smith or Assettzzz..

Las vegas sun: Report: Vegas home prices at 1998 levels as sales surge

This guy Brian who writes these articles gets slated everytime , he is a bit like David Smith or Arzetzz, maybe they should team up and make a big comedy club..

Posted by mark @ 12:22 PM 4 Comments

Ah yes, normality is what the world needs right now.

Telegraph: Lloyds TSB has become only the second High Street lender to offer mortgages with a deposit of five per cent, signalling a return to normality in the market.

Lloyds TSB has become only the second High Street lender to offer mortgages with a deposit of five per cent, signalling a return to normality in the market. [...] But the Lend A Hand mortgage requires 20 per cent of the mortgage value to be held in a savings account by the bank, fixed for three years - allowing first-time buyers to use their parent's savings to boost their deposit.

Posted by lukeskywalker @ 10:37 AM 11 Comments


BBC: Gold demand soars among investors

Using our standard HPC logic, whereabouts on the curve are we if the BBC is talking about gold like this?

Posted by inflation is eating my savings @ 09:05 AM 73 Comments

This is why they must go

Telegraph: Capitalism at 'turning point' claims Lord Mandelson

Mandelson is attempting to redefine the economic crisis not as a regulation issue but as a cautionary lesson in not over-regulating. "The risk at the moment is that the critique of markets goes too far, that we rush into re-regulating markets as a point of principle, as a political attempt to demonstrate control ... ". How can the critique of unregulated financial markets NOT go too far? Regulation is now a neccessity for the long term health of the economy. As yet, no word on the government's other attempts to demonstrate control such as the car-scrappage scheme, ID-cards and blocking of MPs expense details. Now what on earth would a politican have to gain from siding with the banks? Fishing for a lucrative bank advisory position after the next General Election by any chance?

Posted by paul @ 09:04 AM 16 Comments

Para-gone still hanging on

FT: Paragon calls for state funding

Paragon has called on the government to allow specialist mortgage lenders to be allowed to tap into state schemes giving access to wholesale funding. The buy-to-let lender said existing government initiatives designed to improve the flow of credit to consumers were excluding non-bank lenders such as itself that do not take retail deposits. Paragon is virtually closed for new mortgage business (apart from remortgages) because it is unable to access the wholesale markets to provide funds for new loans. Nigel Terrington, chief executive, said there was a growing demand from professional landlords to take out new loans and snap up bargains in the housing downturn. We estimate that there has been a 95 per cent fall in buy-to-let mortgage products over the past two years, Mr Terrington.

Posted by little professor @ 07:43 AM 10 Comments

They said this about WW1 did they not?

Timesonline: Alistair Darling predicts UK recession will be over by Christmas

I am not going to change my forecasts, he said. I remain confident that we will see a return to growth at the turn of the year. So that's good news then. Here I was I thinking we were less than half way down, still, what do I know!

Posted by tim miller @ 01:04 AM 7 Comments

Just replace "US" with "UK" throughout

Mish: Effect of Household Deleveraging on Housing, Consumption and the Stock Market

U.S. household leverage, as measured by the ratio of debt to personal disposable income, increased modestly from 55% in 1960 to 65% by the mid-1980s. Then, over the next two decades, leverage more than doubled, reaching an all-time high of 133% in 2007 [UK=173%]. In the long-run, however, consumption cannot grow faster than income because there is an upper limit to how much debt households can service, based on their incomes. To achieve a sustainable level of debt relative to income, households need to undergo a prolonged period of deleveraging, whereby debt is reduced and saving is increased. Can it get worse? Yes, unfortunately it can. Expect a Japanese-style "Lost Decade" when it comes to housing and the stock market. It's payback for the greatest credit binge in world history.

Posted by drewster @ 12:18 AM 8 Comments

No green shoots at the garden centre

FT: Home Depot chief warns on US housing

Growing optimism over the US housing market may be premature, a leading retailer warned on Tuesday. Frank Blake, CEO of Home Depot, said housing market signals were still mixed. We are concerned about the accelerating rates of foreclosures, particularly in the western part of the country, he said, noting that one out of every 54 homes in California was in foreclosure. Foreclosure filings in April were up 1pc from the previous month and up 32pc from last year. Even the best stores were seeing only a slower rate of decline in sales rather than increases. Getting to less bad is not the same as getting to recovery, he said. The retailer said it was seeing strong sales of security equipment such as outdoor lighting and locks. Other retailers have reported robust sales of handguns and safes.

Posted by drewster @ 12:05 AM 3 Comments

Tuesday, May 19, 2009

Green shoots with no roots

Mortgagesolutions: Housing market yet to stabilise

Alan Cleary, managing director of Exact, echoed Capital Economics' cautious outlook. He explained: "Housing market commentators would have us believe in green shoots springing up everywhere, but for those in the know, sentiment has not turned yet. House prices cannot recover until the mortgage market is fixed, and that is some way off."

Posted by jack c @ 09:53 PM 2 Comments

"belief that the US housing market has stabilised is premature"

Mortgagestrategy: Housing starts in the US fall to record lows

Housing starts in the US in April fell to the lowest level on record, suggesting that talk of housing market recovery is premature. Figures from the United States Census Bureau show that the number of privately owned housing starts - homes where construction has started -was 458,000 units in April, 54.2% lower from the same time last year. The number of housing starts reached a low of 488,000 in January then rose above 500,000 in the following two months.

Posted by jack c @ 09:40 PM 1 Comments


BLOOMBERG: U.S. Needs More Inflation to Speed Recovery

May 19 (Bloomberg) -- What the U.S. economy may need is a dose of good old-fashioned inflation. So say economists including Gregory Mankiw, former White House adviser, and Kenneth Rogoff, who was chief economist at the International Monetary Fund. They argue that a looser rein on inflation would make it easier for debt-strapped consumers and governments to meet their obligations. It might also help the economy by encouraging Americans to spend now rather than later when prices go up. Im advocating 6 percent inflation for at least a couple of years, says Rogoff, 56, whos now a professor at Harvard University. It would ameliorate the debt bomb and help us work through the deleveraging process.

Posted by hmm @ 07:26 PM 5 Comments

More Green Shoots

Bloomberg: U.S. Economy: Housing Starts Drop on Apartments, Condominiums

You'll love the expert analysis on this one This continues to support the story that new construction PROBABLY bottoms by early summer, said Adam York, an economist at Wachovia Corp. Yoss amendment PROBABLY bottoms by early summer 2012

Posted by yoss @ 07:25 PM 0 Comments

Time to rebook that foreign holiday...

Wall Street Journal: British Pound Reaches Seven-Month High

Good news for those of us planning a trip away from dreary 'ol Britain. I cancelled my holiday last month because the pounds was in the sh1tter, it was shocking how much less purchasing power my holiday money would have had. Hopefully things will continue to pick up before I go away in August...

Posted by little professor @ 05:38 PM 7 Comments

We pick up the tab as they gear up for the next course...

The Renegade Economist: Cathartic Clean-out - The People Pay For Bankers Re-hab

The collapse of the Western financial sector was just what the doctor ordered, for the bankers. They had reached the point where they needed a cathartic clean-out. Their bloated excesses couldnt go on, so a managed return to health was necessary to secure their long-term interests. And so, cleverly manipulating the politicians, the banks are disposing of their victims the suckers who took on mortgages they couldnt afford and shifting worthless assets on to a new batch of suckers (taxpayers). Prognosis: a new, lean banking machine ready to cash in on the glorious opportunities over the next business cycle.

Posted by neo-serf @ 04:44 PM 2 Comments

US small banks to get clobbered by commercial property defaults

The Business Insider: 600 Banks Fail Stress Test

The Wall Street Journal has run its own version of the the Fed's stress test on 900 small and midsize institutions, and it claims they'll see losses of about $200 billion by the end of next year...The biggest culprit? You guessed it, commercial real estate, which could contribute about $100 billion in losses.

Posted by mountain goat @ 01:47 PM 0 Comments

Signs of Banking Recovery

Bloomberg: Libor Falls Most in Four Months

The London interbank offered rate, or Libor, for three- month dollar loans declined three basis points today to 0.75 percent, the British Bankers Association said, bringing its drop in the past two days to seven basis points, the most since Jan. 13. The rate has decreased in each of the past 35 days.

Posted by hmm @ 01:18 PM 3 Comments

Interesting inflation chart

Daily mail: Recession forces down sales of fruit and vegetables as shoppers opt for crisps and frozen pizzas

In the past year the Daily Mail Cost of Living Index has found price increases of up to 50 per cent on many imported items.

Posted by mark @ 01:08 PM 19 Comments

Fantasy wages following fantasy house prices!

Telegraph: Britain sinks into deepest deflation since 1948

Although in the short term falling prices will appeal to consumers, RPI is used to calculate wage increases so the sharp fall in April is likely to add to downward pressure on salaries already caused by higher unemployment and falling corporate profits. "As a result, many workers are likely to wage freezes or even pay cuts," said Howard Archer, chief UK economist at IHS Global Insight.

Posted by cheekie charlie @ 12:38 PM 4 Comments

Despite thousands of new builds lying empty there's going to be a shortage and prices will rise!

Evening Standard: Prices slashed on new homes

Evening standard ramping. They reckons because a lot of building projects have been mothballed this will create a supply shortage in the coming months, and therefore prices will rocket. Because nobody can get mortgages on new builds without at least 20% deposit I doubt their logic. The whole article is wishful thinking presumably cobbled together from a press release sent out by some building trade body.

Posted by meltsheep @ 12:00 PM 3 Comments

Japan stuff

Wall Street Journal: Solving Japan's Economic Puzzle

Apparently Japan's famous dependence on exports is 16% of GDP, but to put that in comparison the UK is at 15.5%. The difference is that growth is only ever in exports, the domestic economy is stagnant, where the export "sensitivity" comes from. Another interesting point is that although Japan used to export finished goods, now they are intermediate producers to China who export the finished product. Thus, they are facing a run-down of their intermediate own stock -plus- a linked rundown of secondary finished stock. But when this destocking finished, both China restocking and Japan restocking will occur, so destocking/stocking is magnified in effect. Some other bits and bobs too.

Posted by stillthinking @ 11:36 AM 2 Comments

Buy to let left in tatters?

Citywire: Has the crisis killed buy-to-let investing?

The writer has a point - while buy-to-let may well be here to stay, it is likely it will become the stomping ground of a much smaller group of investors.

Posted by smithers @ 11:31 AM 7 Comments

The 4,000 cuts are on top of the 7,000 positions the company said

Cnn: American Express to cut 4,000 jobs

how many of these jobs will be in London????

Posted by mark @ 10:50 AM 14 Comments

Make sure you have your pinch of salt to hand

ONS: CPI inflation falls to 2.3pc; RPI at record low

Consumer Prices Index (CPI) annual inflation the Governments target measure fell to 2.3 per cent in April, down from 2.9 per cent in March. Annual inflation measured by the Retail Prices Index (RPI) - which includes housing costs such as mortgage interest payments and council tax fell from -0.4 per cent in March to -1.2 per cent in April, the lowest figure since records began in 1948. The largest downward effect on CPI inflation came from housing and household services, mainly due to electricity and gas bills which fell this year but rose a year ago. Food and non-alcoholic beverages also contributed to the decline, with the largest effect coming from vegetables and meat. Prices for alcoholic beverages and tobacco had a further downward effect as prices rose a year ago, ...

Posted by 51ck-6-51x @ 10:44 AM 10 Comments

Japan will be the first country to try and hyperinflate

Market Oracle: The Country Most Likely Heading for Hyperinflation

Not only has the Japanese government built the world's largest and growing debt, but its ability to collect tax income is about to take a big hit. Japan is in a deep recession, and its businesses aren't able to sell goods abroad right now. The Japanese government is in a hopeless situation. Because the Japanese government is broke, I think Japan is the world's most likely candidate for hyperinflation. When Mrs. Watanabe realizes her government's credit is irreparably damaged, she'll dump her government bond and currency holdings and seek tangible assets. Also, don't expect inflation in America until you see it in Japan first.

Posted by sold 2 rent 1 @ 10:21 AM 16 Comments

Government looks to ensure it makes no profit and sells our banks to foreigners on the cheap

FT: UK looks towards sale of bank stakes

Admittedly, the government (we) can't realise huge profits on these banks rising share prices as they'll be suppressed by the very fact that they are own by the government, but the way this article is talking it looks as if UK PLC would rather make a penny today than a pound tomorrow. Furthermore, they are looking to foreign sovereign wealth funds as buyers. I wonder if some advisors to the government are getting back handers from prospective buyers to advise a sale at a good price.

Posted by lukeskywalker @ 10:01 AM 0 Comments

Why Are they all so happy that asking prices are up?

Write About Property: Rightmove Index - Raised Asking Prices Don't Mean Market is Bottoming

I cannot believe the level of optimism generated by the fact that the May release of the Rightmove UK house price index showed asking prices had risen for the fourth consecutive month. This time the rise was 2.4% the largest monthly jump since 2003. That combined with reports of rising activity from the Royal Institute of Chartered Surveyors and the National Association of Estate Agents has brought many people to fever pitch shouting "the market has bottomed, -- don't panic Mr Mannering -- the market has bottomed. I however am not one of them. I know...

Posted by problem pete @ 09:53 AM 0 Comments

False floor and hoax sold signs

BBC: 5 Live Wake Up to Money 19/05/2009

18:30 in onwards. 40% drop since June 07 in Commercial property values and still tanking. Quite technical talk about the potential false bottom of the residential and even more drops (double dip) when the M0 ("hot money") is let go by the banks at some point next year and inflation shoots up. STAGFLATION. Then the end, comment that sold signs are been used by EAs as a "ploy" to get mugs looking.

Posted by doomwatch @ 09:46 AM 2 Comments

40% from peak already

ITV1: Tonight :The Property Waiting Game

Jonathan Maitland meets those desperately seeking a recovery in the property market, including separated couples forced to live together because they can't sell their homes.

Posted by doomwatch @ 09:27 AM 12 Comments

Stagflation on its way

BBC Radio 5 Live - The Wake Up To Money podcast: Inflation

Money supply out of control, stagflation, double dip recession, false floor to the housing market..hear what Stephen Regan, Senior Lecturer in Management Economics at Cranfield School of Management has to say.. go forward 21 minutes

Posted by foggy @ 09:17 AM 0 Comments

Well, they've been doing such a good job of managing the economy ...

Telegraph: Mervyn King's pension tops 5 million

"We didn't think it was going to be anything like as severe as it's turned out to be", "It would be very surprising if we weren't learning lessons from it and we are", "... it's because they didn't understand the market and the impact that some of these products were going to have. The reason for that is that they weren't good enough". Still. Look on the bright side - quids in, eh?

Posted by paul @ 08:52 AM 15 Comments

All is well then

BBC: Recovery hopes push up US shares

"...Better-than-expected results from home improvement Lowe's Co..." I thought home improvement business is precisely countercyclical to the home market (?) ... I can't move therefore I improve my home, and all that...

Posted by old_traveller @ 07:52 AM 0 Comments

Credit Crisis Watch: Thawing - noteworthy progress

Investment Postcards: Credit Crisis Watch: Thawing - noteworthy progress

Most indications are that the credit market tide has turned the corner on the back of the massive reflation efforts orchestrated by central banks worldwide and that the credit system has started thawing. However, although the convalescence process seems to be well on track, it still has a way to go before confidence in the financial system is restored and liquidity starts to move freely again. Read on for an update on the "Credit Crisis Watch" ... The link to the post is:

Posted by prieur du plessis @ 05:22 AM 0 Comments

Monday, May 18, 2009

Be afraid

The Telegraph: Is your building society safe?

Savers and mortgage holders with the West Bromwich may be alarmed by reports that the Financial Services Authority is planning to bail out the building society. The reports come just days after ratings agency Moody's downgraded nine societies, which in turn led to local authorities withdrawing large sums of money.

Posted by devo @ 11:38 PM 3 Comments

Despite being 12 months ahead of us, the bad news from America never seems to end

Calculated Risk: Fed: Delinquency Rates Surged in Q1 2009

Bank default rates for residential property, commercial property and consumer credit cards rose sharply in the first quarter of 2009. Commercial property defaults (6.4%) are rising rapidly, and are at the highest rate since the early '90s. Residential property (7.9%) and consumer credit card (6.5%) defaults are at the highest levels since the Fed started tracking the data (since Q1 '91). Although there is credit deterioration everywhere, the rise in these three categories is especially significant. There was also a significant increase in C&I defaults (commerical & industrial). This will probably lead to the closure of many regional banks. Just more evidence of severe credit problems at banks.

Posted by drewster @ 11:35 PM 2 Comments

Do these profits belong to the tax payer?

Telegraph: Bank of England makes 1bn profit thanks to crisis measures

Despite the worst financial crisis in modern history, one City bank has managed to turn the biggest profits in its 300-year history.

Posted by flintster1994 @ 09:37 PM 4 Comments

Why house prices are still way too high

National statistics: Household income

Nothing new here, but a very good chart that shows household income in quintile groups. The bottom two quintiles comprise people in social housing and pensioners who can get by on a low income because their houses are paid for; but look at the middle sector - the third quintile. These are the 20% of households for whom houses must be affordable to buy; for whom 20% of our housing stock must be readily affordable. These are people who need housing that costs no more than 75k. Try looking to see what percentage of homes for sale cost less than that..

Posted by uncle tom @ 07:56 PM 2 Comments

Heads up

ITV1 8pm: Tonight - The Property Waiting Game

Tonight with Trevor McDonald - After two years of a stagnant property market and predictions that the worst of the price slump is behind us, is it finally time to stop waiting and start buying? Jonathan Maitland goes in search of the green shoots and meets those desperately seeking a property recovery, including separated couples forced to live together because they cant sell their homes. Alternatively - Channel 4 8pm Dispatches has an expos revealing that bankers are greedy and overpaid. True revelations indeed

Posted by little professor @ 07:46 PM 1 Comments

No more money people...

Cnn: The credit card company everybody hates

Facing soaring losses, small business credit card lender Advanta is shutting down accounts and tells investors it will try to wait out the downturn.

Posted by mark @ 07:44 PM 0 Comments

Unbelievably bad

FT Alphaville: Debts, defaults and UK commercial property

Commercial property looks like a catastrophy. Lest we forget though, this has been a land bubble, not a housing bubble (building costs rose with inflation), and the the only difference between residential property and commercial property is planning permission. I wonder if at some point commercial property will have lost so much that conversion to residential becomes a good idea. You do see the odd converted office building->flat conversion around.

Posted by stillthinking @ 07:41 PM 2 Comments

Latest Flat Flippin MP

Telegraph: MPs' expenses: John Austin claims 35,000 for flats 11 miles from home

"John Austin, a Labour MP, claimed more than 10,000 in expenses for the redecoration of his London flat, which was 11 miles from his main home, before selling it for a profit. He made 30,000 on the sale and then bought a new flat 1.5 miles away, claiming 10,000 in stamp duty and charges incurred during the move, and a further 15,000 on a new bathroom, kitchen, carpets and appliances". (I'm so glad house prices only go UP).

Posted by alan @ 07:19 PM 4 Comments

2008 Earnings Survey

Office for National Statistics: 2008 Annual Survey of Hours and Earnings

Following on from the earlier discussion about the house price to earnings ratio, here's the ONS annual survey from last year. I've looked and I still can't see where they get that 35,122 from. If you look at "Employees on adult rates who have been in the same job for at least 12 months" (which is what the Halifax say's it uses), the figure for males was 27,500 in April 08 and I doubt it's gone up much in the last 12 months. Maybe someone can enlighten me?

Posted by becky @ 05:42 PM 14 Comments

Whay to invest in gold?

AGR Financial: Article

So why invest in gold? Because with the markets going haywire, and investors concerned that their savings could disappear in a puff of smoke, a growing number of people are choosing to transfer their money into something more tangible than a bank account. Owning Gold is best seen as a Protection Against Financial Instability and if you want to minimize the risk from the financial upheaval that we're seeing around the world just now, stick to the metal. Gold's appeal is that it is less prone to the fluctuations of the global market and its value is fixed twice a day by the five members of the London Gold Pool. Gold is a traditional safeguard and will always remain an attractive investment. As of 1st of January 2000 gold became Exempt From Capital Gain Tax throughout the entire EU.

Posted by amir @ 05:34 PM 0 Comments

A good excuse for Gordon to latch on to?

BBC News: Keep working 'to avoid dementia'

Research recently released suggests that working until you are on your deathbed will prevent dementia. Conveniently timed?

Posted by juniper @ 05:24 PM 0 Comments

Renting Lessens Impact Of Crime

Moneyweek: How To Avoid Being The Victim Of Crime

Someone who's glad he rents

Posted by frizzers @ 04:22 PM 3 Comments

Scottish house prices continued to fall over the last quarter, with the average house price having d

FT: Scottish house prices continue to fall

According to the latest Scottish House Price Monitor from Lloyds TSB Scotland, house prices fell 4.3 per cent in the three months to 30 April to give an average price of 148,990. This latest fall is greater than the 2.3 per cent fall recorded in the previous quarter, and provides evidence of the difficult start to the year in terms of both house prices and the number of house purchase transactions, Lloyds said. On an annual basis, Scottish house prices have now fallen by 2.1 per cent. The volume of house purchase transactions is also down 35 per cent on the levels recorded for the same period last year.

Posted by jack c @ 03:43 PM 3 Comments

Monday night at the Comedy Club with Cluttons

Mortgagestrategy: Cluttons predicts house price growth from 2011

Cluttons has adjusted its Central London housing market forecast to predict a 10% fall in prices in 2009 with a levelling off in 2010, followed by a return to positive house price growth in 2011. The predicted peak to trough fall in Central London has been moderated to -27% from September 2007, compared to -29% in its previous forecast published in February 2009. It believes strong demand from international purchasers and a more limited supply of property than expected, given the loss of wealth and jobs in the capital, have led to this moderation in the overall fall in values.

Posted by jack c @ 03:33 PM 1 Comments

Green Shoots ? my aunt !

Yahoo finance: "The Worst Is Yet to Come": If You're Not Petrified, You're Not Paying Attention

From a US perspective........... The green shoots story took a bit of hit this week between data on April retail sales, weekly jobless claims and foreclosures. But the whole concept of the economy finding its footing was "preposterous" to begin with, says Howard Davidowitz, chairman of Davidowitz & Associates. "We're in a complete mess and the consumer is smart enough to know it," says Davidowitz, whose firm does consulting for the retail industry. "If the consumer isn't petrified, he or she is a damn fool."

Posted by tudorian @ 03:20 PM 0 Comments

House crashed within days!!!!

Contract journal: 1m 'dream home' demolished days after completion

A 1m 'dream home' in Stockton-on-Tees has been demolished within a few days of its completion

Posted by mark @ 02:42 PM 3 Comments

Ford suspends start of car scheme

BBC: Ford suspends start of car scheme

This is a good illustratino of how the "governement" (civil service) has no idea how the real commercial world works. As if anybody is going to accept just 2000 off list price, when discounts of list of up to 50% are well documented in these desperate times. What a joke.

Posted by doomwatch @ 01:59 PM 0 Comments

MP's claim millions, on expenses, for stress related injuries

Daily Telegraph: Ben Chapman overclaimed 15,000 on mortgage: MPs expenses

Okay maybe my title is a bit premature however, just imagine the following scene:- Your honour (MP addressing judge) I will today justify my claim for millions in stress related injuries. On the 18 May 09 I wrote in the Daily Telegraph of my "highly pressured job, with late nights and early mornings". My employer, the tax payer, ignored these warnings. In fact, the tax payer even started to demand justification for my expense further increasing my stress levels! My job starts early (10:00ish) and has many late evenings in the bar! My job has a tiny leave allowance of only four months per annum. Thus I am sure your honour will agree to my small claim of 10,000,0000quid in stress related injuries and a tiny top up of 10,000,000 per annum to my index linked pension fund.

Posted by who stole my pension? @ 01:12 PM 2 Comments

Rightmove - the rise actually reflects a mixture of 'ambition, optimism and necessity'

Citywire: Lack of sellers pushes asking prices higher

Asking prices rose 2.4% in May - the highest rise in May since 2003 - but the number of new sellers halved and many existing sellers were forced to cut asking prices. Rightmove said asking prices in May rose 2.4% month on month compared to a 1.8% increase in April. The average asking price in May was 227,441. Year on year, house prices fell 6.2% in the year to May, compared to the 7.3% fall in the year to April.

Posted by jack c @ 12:22 PM 11 Comments

It just gets worse and worse!

Timesonline: Europe waits for Germany to come to the rescue

perfect storm. of three elements!

Posted by tim miller @ 12:17 PM 1 Comments

No sterling collapse after all?

Bloomberg: Pound a 'screaming buy' as UK attracts investment

Strategists at New York-based Citigroup said in a report last week the pound is among the most undervalued major currencies, trading almost 15% below fair value versus the dollar. Barclays predicts it will rise as much as 18% against the dollar and 11% versus the euro in the coming year. Goldman Sachs Group Inc. sees a 23% gain versus the dollar and 15% advance against the euro. "There was an extreme undershoot of sterling versus the euro during the financial crisis, said David Powell, of Merril Lynch. The fall in the exchange rate has made assets of all kinds in the U.K. more attractive to people overseas, Bank of England Governor Mervyn King said. "Thats one of the stimulatory consequences of a lower exchange rate.

Posted by little professor @ 11:07 AM 21 Comments

Estate Agent's on a Set Fee - Not in my Lifetime

Write About Property: UK House Prices: How to Break the Boom Bust Cycle

Estate agents are paid a percentage of the sale price; so the more the house sells for the more they get paid, so who can blame them for charging as much as they can get for a house during the good times. The downside being that as house prices increase more rapidly; the more out of reach they become for first time buyers, and the more inevitable a correction becomes. So, now, as we continue in this boom and bust cycle, each crash being worse than the one before it, one must ask, what can be done to break the cycle?

Posted by problem pete @ 09:14 AM 0 Comments

Defending Western Debtors

Telegraph: Asia will author its own destruction if it triggers a crisis over US bonds

Ambrose Evans-Pritchard has penned a rather peculiar article in which he defends the "debt appetite of the Anglo-sphere and Club Med" and asserts that Japan and China dare not stop buying America's debt for fear of domestic economic consequences. Japan and China may both have their problems but the suggestion that "Asia cannot yet stand on its own two feet" without Westerners considerately consuming their exports looks a bit complacent. Lastly, this bit also caught my eye: "American can if necessary retreat into its vast home market and rebuild its industrial base, well-armed with 12 aircraft carrier battle groups." Yep, America is just going to rebuild itself. Just like that!

Posted by quiet guy @ 07:06 AM 26 Comments

False Dawn for US Stocks - 62% Plunge Likely

Bloomberg: Federateds Tice Says S&P 500 Is Poised to Plunge 62%

Head of successful Federated Investors Inc says current stock market gains are a 'sucker's rally' with stocks overpriced in terms of earnings. Sounds like the rally in house (asking) prices we are seeing here!

Posted by ben6.5 @ 04:16 AM 8 Comments

Yeah, but their only ASKING prices

Press Association: Property asking prices rise

Asking prices for properties have risen for the fourth month in a row as new sellers continued to quote optimistic prices for their homes, research revealed. The average asking price of a property in England and Wales increased by 2.4%, or 5,000, during the four weeks to May 9, to stand at 227,441, according to property website Rightmove. The group said sellers may be pricing their homes at higher levels due to concerns about the extent to which their equity has been eroded, making it difficult for them to trade up the property ladder.

Posted by bufferbear @ 12:51 AM 9 Comments

Rightmove: +2.4% MoM

Daily Mail: House prices up 2.4% as they rise for FOURTH month in a row

Property asking prices have increased for the fourth successive month, jumping by 2.4 per cent, new figures showed today. The average price of a home in England and Wales rose by 5,000 to 227,441, during the four weeks to May 9, according to property website Rightmove. But the group warned that the increase in asking prices may be over-optimistic and was more reminiscent of a boom market. Industry experts say the run of positive factors has stoked belief of a revival and proves that the worst of the housing slump is over.

Posted by little professor @ 12:45 AM 52 Comments

Sunday, May 17, 2009

Houses and Mortgages at the Centre of the Fraud

Telegraph: MPs' expenses: Officials colluded over mortgage claims

"House of Commons officials colluded with MPs to let them make inflated claims on their mortgages, leaked internal documents seen by The Telegraph have disclosed". "Parliamentary authorities, overseen by Michael Martin, the Speaker, gave secret permission for some MPs to over-claim for thousands of pounds in home loan interest in deals that led to the systematic abuse of the taxpayer-funded expenses system". (I think MPs wanted House Prices to inflate to maximise profits on second homes - they wanted a bubble, didn't they?).

Posted by alan @ 10:33 PM 8 Comments

The People seem to get it, even if the BBC don't

BBC: Have your say

Most comments in this thread seem to be welcoming lower house prices. Worth a quick skim-read.

Posted by mark wadsworth @ 10:27 PM 2 Comments

If you agree, say so below.

The Times: City predicts faster growth for Britain

"we now expect the recession to end around the end of this year"

Posted by devo @ 09:52 PM 8 Comments

West Bromwich Building Society not in trouble.

BBC: West Bromwich denies rescue talks

West Bromwich Building Society has denied reports that it is on the verge of collapse.

Posted by devo @ 05:32 PM 9 Comments

2007 tracker deals expiring fast

The Times: Homeowners with trackers face shock rise

This could be the next trigger in the HPC. All those 2 year tracker deals coming to reset time..... "Brokers are warning some borrowers to brace for a sudden rise in repayments of as much as 583 a month or 6,996 a year on a typical 200,000 interest-only loan as loss-making deals on offer in 2007 expire. Their rates could shoot up from 0% to as much as 3.5% if they default on to their lenders standard variable rate (SVR). On a 500,000 mortgage, the payment shock would be 17,496. "

Posted by voiceofreason @ 12:15 PM 15 Comments

An alphabet of recoveries

Times: How to profit whatever the shape of recovery

V, U, W, WW or L-shaped recovery? These sell side pundits know nothing and say this and the opposite of this. "Schroders believes there will be two double dips giving a WW-shaped recovery." but nothing beats the title "How to profit whatever the shape of recovery"

Posted by confused76 @ 11:52 AM 4 Comments

Saturday, May 16, 2009

West Bromwich building society in trouble

The Times: Building society in rescue talks

A RESCUE operation to save one of Britains biggest building societies is under way in the first of a new series of expected bailouts in the sector.

Posted by devo @ 10:16 PM 19 Comments


Independent: Home repossessions jump by 50 per cent

This article is about rising repossessions. However, I would urge all regular posters to the site to stop looking at the UK so much. Our economy, inflation, and interest rates, or perhaps the timing of its demise, are going to depend on events abroad.

Posted by stillthinking @ 07:27 PM 5 Comments

Banks choosing not to opt for firesales in commercail property

Property Week: Propertys 225bn time bomb

It is very interesting that a lot of the loans have been extended into the next three years, says Maxted. We can see that institutions have so far decided not to close on loans. Banks have been reluctant to flood the market with properties when the market is in such a depressed state, so instead they are working with their borrowers. Dominic Reilly, partner in charge of property finance at King Sturge, a sponsor of the research, added: It has so far been very different from the early 1990s as there have been very few property portfolios pushed on to the market. If banks have lent on good assets and they are being paid the interest, then they are quite happy to get with it.

Posted by turkey @ 05:13 PM 3 Comments

How very dare they

Telegraph: Green shoots threatened by greedy banks raising mortgage rates

The green shoots of recession are being threatened by "greedy" banks and building societies that are putting up mortgage rates despite record low interest rates. Research suggests that the average fixed rate mortgage deals have increased during the past month, even though the Bank of England has kept interest rates at an historic low of 0.5%. The news comes after two major high street lenders announced changes to their lending criteria, restricting the amount lenders can borrow. It raises fresh concerns that the fragile signs of a potential recovery in the housing market could be squashed if more affordable mortgages do not become available.

Posted by little professor @ 12:37 PM 19 Comments

Will returnees reflate the bubble?

Times: The pain in Spain proves too much as expat Britons pack their bags

Now that the value of their pensions has fallen by 30% are we likely to see an influx of retirees from the Med coming back to Blighty and doing the rounds of the auctions, assuming that they can sell their dream home in the sun?

Posted by peeping tom @ 12:36 PM 9 Comments

You Couldn't Make It Up

Financial times: Ons gets sums wrong on retail sales

nothing like a bit of vested interest to keep the housing/stock market up then...if MP's aren't flipping properties then are they lobbying the ons to fiddle to ONS statistics.....welcome to new labour the corrupt government revealed

Posted by taffee @ 12:00 PM 11 Comments

Yes We Can get further into debt

BBC: Banned director runs loan firm

Yes Loans, UK's largest sub-prime loan broker, is run by Keith Chorlton banned in the year 2000 after he diverted cash from an insolvent business into his personal bank account. Yes Loans' licence expired in June 2008 but the Office of Fair Trading, which issues licences, has allowed the company to continue trading before it decides whether to issue a renewal of the licence.

Posted by mountain goat @ 10:55 AM 5 Comments

We want more bang for our buck!

BBC News: Homes Rejected for Social Housing

Article explaining how housing associations are rejecting the purchase of many of the 100,000 empty new build properties lying dormant in the UK as their build quality is just not up to scratch. We build the smallest houses of any developed nation - by far (even though our population density is much less than Japan and the Netherlands - Thanks WolframAlpha for that!)

Posted by hammered @ 10:54 AM 5 Comments

No rich buyers there, so none in London either?

Telegraph: French Riviera luxury property prices crash

A crash in the French Riviera's "trophy" property market has seen luxury villas which were once on sale for 450 million plummet in value to less than a tenth of that price, experts have said. "For trophy properties it used to be a question of how much someone was willing to pay. They would come quietly onto the market they would be marketed under the table. This system really has totally collapsed. Buyers willing to pay anything like those sums just don't exist." But other property agents said the high-end buyers would return as owning a property in the region remained a status symbol. "Owning a property here is certainly better than placing the money in a bank, as some have been on the verge of collapse."

Posted by drewster @ 10:50 AM 1 Comments

"Lenders are acutely conscious that behind the statistics are real people"

Telegraph: Repossessions rise by 50pc

The Council of Mortgage Lenders said that a total of 12,800 properties were repossessed by first-charge lenders during the three months to the end of March, up from 8,500 a year earlier and 10,400 during the previous quarter. The number of loans with arrears of more than 2.5pc of the mortgage balance rose by 12pc from 182,600 in the fourth quarter of 2008 to 205,300 in the first quarter of this year. That was 62pc up on the 127,000 in the first quarter of 2008. "Lenders are acutely conscious that behind the statistics are real people, many of whom are affected by the economic downturn and its impacts on unemployment, changes in circumstances and inability to refinance. Lenders do not want to repossess if a realistic alternative solution can be found."

Posted by drewster @ 10:41 AM 2 Comments

Gamblers are locked out of the casino

Telegraph: Buy-to-let lending drops by almost 70pc

The number of buy-to-let mortgages approved fell for the sixth quarter in a row, down by nearly 70pc (year-on-year) in Q1 2009. The value of BTL mortgages was down 78pc. BTL accounted for just 6pc of all mortgage advances during the first quarter, down from 12pc a year earlier. Repossessions of BTL properties were also up sharply, with 1,700 investment properties taken over by lenders during the first quarter. A receiver of rent was appointed to a further 2,400 properties, enabling tenants to stay in their homes with their rent paid to the lender rather than the landlord. [Interesting final twist - are the banks turning into landlords?]

Posted by drewster @ 10:36 AM 4 Comments

Boxes available for only 200K who could resist

Times: First-time homebuyers rush to join bargain hunt

The number of first-time buyers climbing on to the property ladder rose by more than a third in March as bargain hunters returned to the market, figures show.

Posted by holding out @ 10:27 AM 5 Comments

We are all sinking in a yellow submarine...

University of Nottingham: We all live in a Robbie Fawler house...

In this podcast a forecast for the Buy to Let market in Britain and exactly what Professor Andrew Leyshon means by the term "Property Neutron Bomb"

Posted by confused76 @ 08:54 AM 5 Comments

Oh really? Thanks for letting us know

Independent: The property bubble has finally burst

Hundreds of thousands of people have discovered they were hoodwinked into paying well over the odds for their property. 24 year olf Kiz bought a house with her boyfriend four years ago. Now it's worth just 125,000, and the couple can not afford to move to a bigger property to start a family. She's one of the many victims trapped because of the current situation. Until property prices recover, there's little to be done to help Kiz and the other estimated 900,000 negative equity victims, but new controls could be brought in to ensure that the situation doesn't arise again. Mandatory deposits of at least 5% and a limit to 3.5x joint incomes would avoid another mad mortgage market.

Posted by little professor @ 12:26 AM 20 Comments

Friday, May 15, 2009

Some of us in the real world work that hard we don't have time to eat

London Evening Standard: We're forced to eat out at restaurants, says Beckett

With a grace and favour place in Whitehall and a flat in London as well as the marvelous subsidised restaurants in the House of Commons open all day bleating Beckett's fall on death ears as far as Londoners are concerned.

Posted by enuii @ 11:28 PM 2 Comments

Minor discrepancy

FT: ONS gets sums wrong on retail sales

Britains supplier of official statistics conceded that since the financial crisis began in August 2007, it has overstated the volume of retail sales growth by 56 per cent

Posted by devo @ 11:18 PM 3 Comments

David (5 Homes) Chaytor

Telegraph: David Chaytor and the phantom 13,000 mortgage claim: MPs' expenses

"A Labour backbencher admitted that he had claimed almost 13,000 in interest payments for a mortgage that he had already repaid". "The MP for Bury North has some of the most controversial arrangements of any parliamentarian examined by the Telegraph over the past nine days. Since 2004, he has claimed for five different properties, flipping his designated second home between London, Yorkshire and Bury. He claimed for one home where his son was the named occupant on council tax bills".(How come so many of these frauds involve houses or renovations?)

Posted by alan @ 10:35 PM 7 Comments

Time to Learn Mandarin?

Telegraph: China's yuan 'set to usurp US dollar' as world's reserve currency

The Chinese yuan is preparing to overtake the US dollar as the world's reserve currency, economist Nouriel Roubini has warned. In a column in the New York Times, Prof Roubini warns that with the proposal for a new international reserve currency via the International Monetary Fund, Beijing has already begun to take steps to usurp the greenback.

Posted by alan @ 07:18 PM 4 Comments

Thought this would happen - I saved it too.

Zero Hedge: Daily Telegraph Removes Mark Patterson Interview

It appears that the Daily Telegraph has gotten major cold feet about the incendiary interview (incendiary, at least, to the administration) it had posted last night with Mark Patterson. One can only speculate why that may be the case, but if you try to connect to the article that had received the biggest number of hits yesterday, you just get a big gaping 404 hole now. Luckily, ZH expected some potential foul play, which is why we copied the entire piece in its entirety and still have it available for readers who would rather be exposed to the truth instead of watching CNBC and the ever increasingly more censored media outlets

Posted by devo @ 05:29 PM 15 Comments

Another 3 years of poor returns predicted U.K. Commercial Rents May Keep Falling Until 2012, RREEF Says

Commercial rents in the U.K. probably will fall until 2012 as landlords lose tenants in the deepening recession, the global head of research at Deutsche Bank AGs real-estate asset management unit said.

Posted by hotfoot @ 04:53 PM 0 Comments

BTL - prices and lending down with arrears up

Moneymarketing: Buy-to-let continues to struggle, says CML

The UK buy-to-let market continued to struggle in the first quarter of 2009 as funding restrictions and falling house prices took hold, according to the Council of Mortgage Lenders. It found that new buy-to-let lending fell for the sixth consecutive quarter in the first three months of 2009; buy-to-lending accounted for 6 per cent of all gross mortgage lending in the first quarter, down from 12 per cent a year earlier. It also found that 3.09 per cent of buy-to-let loans were in arrears of three months or more at the end of the first quarter, up from 2.31 per cent at the end of 2008.

Posted by jack c @ 03:34 PM 1 Comments

Margaret Beckett is no longer


Caravanning Queen and Sea Biscuit lookalike Margaret Beckett suffers the public backlash.

Posted by denzil @ 03:15 PM 5 Comments

Another write up of the same press release, but good stuff nonetheless...

Metro: Dramatic rise in home repossessions

The number of people who lost their homes has soared by more than 50% during the first quarter of the year. A total of 12,800 properties were repossessed by first-charge lenders during the three months to the end of March, up from 8,500 a year earlier and 10,400 during the previous quarter, according to the Council of Mortgage Lenders. But despite the steep jump in people losing their homes, the group said its forecast of 75,000 repossessions during 2009 now looked pessimistic, and it expects to revise the figure ... The CML figures showed that buy-to-let investors were continuing to experience high levels of repossessions... A total of 1,700 landlords had their properties repossessed during the first three months of the year, nearly double the 900 who lost their properties during the sam.

Posted by mark wadsworth @ 12:01 PM 5 Comments

I thought Zanu Lbour had abolished this

BBC News: UK repossessions up 50% in a year

The CML has predicted that 75,000 homes will be repossessed in 2009, almost double the 40,000 of last year.

Posted by matt_the_hat @ 10:19 AM 21 Comments

The Repo Man Is Coming

BBC News: Repossessions 'rising' in the UK

The number of homes repossessed in the UK rose to 12,800 in the first three months of the year, the Council of Mortgage Lenders (CML) has said. This was up from 10,400 in the previous three months and higher than the 8,500 of the same period in 2008.

Posted by garyb @ 09:53 AM 3 Comments

Palpable Outrage

BBC via Market Oracle: Mealy Mouthed MP's Blasted Over Expenses Abuse on Historic BBC Question Time

" I am just very Angry Mr Dimbleby," "Mrs Becket are you going to pay back the 72,000 that you have taken after your mealy-mouthed answer trying to explain yourself, and Mr Campbell how the hell do you get through 800 a month on food?" "No I'm Not, because as I pointed out a moment ago...." The audience boo's, jeers and heckles Margaret Becket's mealy-mouthed excuses. The full programme is available now to watch on BBC Iplayer. Starts off with politicians doing their usual then audience gets vocal.

Posted by mountain goat @ 09:33 AM 13 Comments

The Bailout bubble will emerge as a commodity bubble in March/April 2010

Yonkers tribune.: Gerald Celente Trends Alert - The "Bailout Bubble" - The Bubble to End All Bubbles

The biggest financial bubble in history is being inflated in plain sight, said Gerald Celente, Director of The Trends Research Institute. "This is the Mother of All Bubbles, and when it explodes," Celente warns, "it will signal the end to the boom/bust cycle that has characterized economic activity throughout the developed world."

Posted by sold 2 rent 1 @ 09:20 AM 39 Comments

European Economic Crunch

Reuters: German GDP plunges record 3.8 pct in Q1

Slumping exports pushed German gross domestic product (GDP) down 3.8 percent in the first quarter of 2009, a far steeper drop than economists had forecast and the economy's worst performance since reunification in 1990.

Posted by alan @ 09:08 AM 0 Comments

Vote No to Gordon Brown

Labour Election Video: Crown blog

Having watched this dreadful Labour election video I thought I would adapt it to represent my views. On June 4th 2009 Vote No to Gordon Brown - vote and register a protest vote.

Posted by crown @ 07:26 AM 2 Comments

A fascinating insight into the mindset at the height of the bubble

New York Times: My Personal Credit Crisis

"If there was anybody who should have avoided the mortgage catastrophe, it was I. As an economics reporter for The New York Times, I have been the papers chief eyes and ears on the Federal Reserve for the past six years. But in 2004, I joined millions of otherwise-sane Americans in what we now know was a catastrophic binge on overpriced real estate and reckless mortgages. Nobody duped or hypnotized me. Like so many others borrowers, lenders and the Wall Street dealmakers behind them I just thought I could beat the odds. The only problem was money. I had a take-home pay of $2,777, barely enough to make ends meet. At any other time in history, the idea of someone like me borrowing more than $400,000 would have seemed insane. But this was unlike any other time in history."

Posted by drewster @ 12:45 AM 12 Comments

A fascinating insight into the mindset at the height of the bubble

New York Times: My Personal Credit Crisis

"If there was anybody who should have avoided the mortgage catastrophe, it was I. As an economics reporter for The New York Times, I have been the papers chief eyes and ears on the Federal Reserve for the past six years. But in 2004, I joined millions of otherwise-sane Americans in what we now know was a catastrophic binge on overpriced real estate and reckless mortgages. Nobody duped or hypnotized me. Like so many others borrowers, lenders and the Wall Street dealmakers behind them I just thought I could beat the odds. The only problem was money. I had a take-home pay of $2,777, barely enough to make ends meet. At any other time in history, the idea of someone like me borrowing more than $400,000 would have seemed insane. But this was unlike any other time in history."

Posted by drewster @ 12:08 AM 1 Comments

Thursday, May 14, 2009

500,000 job loses!

A much bigger bear market than most people realize, something along the lines of 1929-1932

Reuters: Stocks still face deflationary collapse: Prechter

Longtime technical analyst Robert Prechter, who forecast the 1987 stock market crash, predicted this week that U.S. equities may plunge to half their lows hit in March as a deflationary depression bites.

Posted by devo @ 11:40 PM 5 Comments

Stimulus programme...

Associated Press: Free Viagra for jobless

Pfizer Inc. says it will provide 70 of its most widely prescribed prescription drugs including Lipitor and Viagra for free to people who have lost their jobs and health insurance. The world's biggest drugmaker said Thursday it will give away the medicines for up to a year to Americans who lost jobs since Jan. 1 and have been on the Pfizer drug for three months or more. Applicants will have to sign a statement that they are suffering financial hardship and provide a redundancy notice. There's a long-term benefit there, beyond the goodwill and the publicity. Pfizer is trying to keep its market share by keeping people from switching to generic versions of its drugs.

Posted by little professor @ 10:54 PM 4 Comments

Short and curlies!

BBC 'News': Short mortgage claim 'excessive'

All these false mortgage claims for second and third properties! Anyone would've thought MPs had a vested interest in the property market.

Posted by paul @ 10:34 PM 3 Comments

Love thy neighbour...........

Spectator: Not So Neighbourly

this was so obviously going to happen..

Posted by fun 4 now @ 06:19 PM 0 Comments

A new Guiness record


Labour MP Elliot Morley defies the boundaries of stupidity

Posted by denzil @ 04:24 PM 11 Comments

130 prospective buyers from the Middle East to force London prices through the stratosphere (LOL)

Mortgagestrategy: Buyer interest swells from overseas investors

Hamptons International has seen a strong interest from overseas investors looking to buy up UK property, particularly in London. The interest follows a Hamptons Best of British campaign which showcased UK property to buyers in Dubai and Abu Dhabi. Recent figures from Hamptons show that for the year to date the number of Middle Eastern applicants has gone by up 2.5 times compared to the same period in 2008. The campaign launched in April with a high-profile auction evening in aid of The Princes Trust, with Prince Michael of Kent as the guest of honour.

Posted by jack c @ 01:43 PM 11 Comments

About a decade too late

BBC: Tougher rules to ban 'liar loans'

A startling fact about mortgage lending was highlighted by the Financial Services Authority (FSA) this week. In 2007, at the height of the lending boom, 45% of all mortgages were being granted without the lenders checking if the borrower's stated income was correct. Many people will be surprised that lenders had got into the habit of lending billions of pounds to people without, apparently, making basic checks on their ability to repay. A lot of the unchecked lending involved "fast track" and "self-certified" mortgages. In some quarters these have been dubbed "liar loans", giving the borrowers a convenient way of dodging sensible lending restrictions. "We have found substantive evidence of irresponsible lending and inadequate affordability assessment," said the FSA.

Posted by little professor @ 01:08 PM 20 Comments

Let's return to lax lending standards

Times: Abbey loosens criteria for most popular home loans

Abbey, the countrys second-largest mortgage lender, will relax the lending criteria on its most popular home loans tomorrow, providing a significant boost to the mortgage market. The lender, which is owned by Santander, is lowering the minimum deposit required for its best fixed-rate deals from 40% to 30%, making its most competitive deals available to tens of thousands more prospective homeowners. James Carter, of Independent James, a broker, said: This is a positive move in a market that has seen nothing but a tightening of criteria for the last year. It is sign that Abbey has faith that monthly house price falls are easing and homeowners should expect that other lenders will have to follow suit.

Posted by little professor @ 01:03 PM 5 Comments

The whole system was rigged - now for the long haul out...

Renegade Economist: The MP's Got Us Here and Green Shoots?

Fred Harrison on where we are and where form here....

Posted by neo-serf @ 12:01 PM 3 Comments

(on mortgage according to CML) 24K in Feb, 31K in March

Sky: Number Of People Buying Homes Jumps 29%

The number of mortgages taken out by people buying a home jumped by 29% during March, the Council of Mortgage Lenders has said. The figures are a further sign of a pick-up in housing market activity. A total of 31,000 mortgages were advanced during the month for people buying a property - up from 24,000 in February . However the figure is still 33% lower than March last year, the Council of Mortgage Lenders said. There was also a steep rise in the number of people buying their first home, with 12,500 first-time buyers taking out a mortgage during the month. These account for 40% of all loans, the highest proportion since April 2005. ** That's all folks! **

Posted by 51ck-6-51x @ 11:20 AM 4 Comments

Housing Market Summer Bounce?

The Market Oracle: UK House Prices Bottom or Temporary Summer Bounce?

UK House prices have now fallen by more than 22% from the peak and down over 13-16% over 12 months with the most recent data across a series of house price indexes such as that of the local government & communities, Nationwide and even the Halifax suggestive of near term support for UK house prices as we move into the seasonally stronger summer months.

Posted by nadeem walayat @ 10:46 AM 0 Comments

More BBC Mis-Reporting

BBC NEWS: 'Sharp rise' in mortgage lending

"The number of loans handed out for house purchases in the UK rose sharply in March, lenders say. Some 31,000 mortgages were granted by lenders, up 29% on February but still 33% down compared with March 2008, the Council of Mortgage Lenders (CML) said. The increase was in line with data showing more applications for home loans had been approved by lenders. But the CML warned the position was still tough for those unable to put down a significant deposit."

Posted by wdbeast @ 09:50 AM 27 Comments

Office Rents Crashing in London to 1991 Prices

Bloomberg: Rents Crashing in London to 1991 Prices Le Gavroche Shows Gone

Its even nastier out there if you're a commercial landlord. Awwww.... that's gotta hurt?

Posted by lukeskywalker @ 09:26 AM 2 Comments

Seller's market in London agents

Property Week: House price decline slowing markedly says Chesterton Humberts

While it may still be a buyers market in the country, it has become a sellers market in the higher value areas of London. However, even within the country offices we are now seeing a marked increase in the number of offers being made and more houses are being sold. Across the board we have witnessed a huge increase in our pipeline of forward business.

Posted by iain o'neil @ 09:21 AM 3 Comments

Green shoots starting to turn brown

Times: Green shoots are dashed by 4.7bn loss at Land Securities

"Land Securities dashed any hopes of green shoots in the commercial property sector yesterday when it reported a pre-tax loss of 4.77 billion. " "Francis Salway, Land Securities chief executive, said the company would continue to sell assets this year and that there were no buildings in the portfolio that he would not consider selling: We are still seeing downward pressure on rental values. "

Posted by kernow @ 09:10 AM 0 Comments

The greatest theft of all time.

Telegraph: US 'sham' bank bail-outs enrich speculators, says buy-out chief Mark Patterson

The taxpayers ought to know that we are in effect receiving a subsidy. They put in 40pc of the money but get little of the equity upside, said Mark Patterson, chairman of MatlinPatterson Advisers. The comments are likely to infuriate Tim Geithner, the US Treasury Secretary, because MatlinPatterson took advantage of the TARPs matching funds to buy Flagstar Bancorp in Michigan. His confession appears to validate concerns that the bail-out strategy is geared towards Wall Street.

Posted by flintster1994 @ 09:07 AM 7 Comments

BT to shed a further 15,000 jobs

BBC: BT to shed a further 15,000 jobs

BT has said it will cut about 15,000 jobs this year, mostly in the UK, and has reported an annual loss of 134m. The firm also said it had cut 15,000 jobs in the past year, which was 5,000 more than expected.

Posted by doomwatch @ 08:34 AM 8 Comments

Last nail in the coffin

Guardian: Private landlord register confirmed

... the next step is rent control. Yesssss

Posted by confused76 @ 07:55 AM 7 Comments

About time

Telegraph: Homebuyers face FSA limits on mortgage size to income

Lord Turner, FSA chairman, said: "A key choice in product regulation would be between LTV and LTI (loan-to-income) limits. There is a prima facie case that LTI limits are more likely to be appropriate given that it is the relationship between income and loan repayments which determines whether a household can service its debt." It loos like the Financially Supine Authority is changing.

Posted by growler @ 07:11 AM 25 Comments

Wishful thinking

Press Association: Half think house prices will steady

Six out of 10 people looking to buy a new home think that prices will not fall any further during the coming 12 months, a survey has shown. Only 35% of those questioned said they thought the property market correction still had further to go, down from 69% three months ago. Young people are most optimistic according to the survey, by Rightmove. Miles Shipside, Rightmove's commercial director, said: "The fact that a majority of consumers feel confident that prices are set to stabilise or increase in the next 12 months is a key indicator that the worst of the falls may be over.

Posted by little professor @ 01:31 AM 30 Comments

How low can you go?

Mish's Global Economic Trend Analysis: Condo Auction Ends Abruptly Due To Low Bids

Mike Shedlock asks a simple question: "Who is going to offer $935,000 or even $635,000 for something that just sold for $320,000?"

Posted by quiet guy @ 01:14 AM 0 Comments

Boffin: "Interest rates are no longer the issue, but capital is"

Telegraph: Buy-to-let: 'Robbie Fowler-type property tycoons to squeeze out amateur landlords'

"The squeeze on access to capital is now the major problem facing buy-to-let mortgage holders. A lot of these BTL mortgages are interest only mortgages, so they're not actually repaying the principal, and many of them are on rates that need to be rolled over, and it's not so much that they can't afford these rates if they have to be rolled over, but do they have sufficient capital? These mortgages were originally worth around 75-85pc of the value of the property loans to value (LTV). There were concerns that some valuers were exaggerating the prices of properties at the time, which in effect gave people 100pc mortgages. When these mortgages have to be rolled over, it's a very different proposition, because some lenders have reduced their LTVs to 50pc for some types of property."

Posted by drewster @ 01:00 AM 2 Comments

Green shoots get a No 1 hair cut

Mailonline: Economy is headed for biggest peacetime crash since 1931, Bank of England warns

Bear food served in a big bowl. There is no reason to kid yourself or anyone else there will be a house price anytime soon.

Posted by tim miller @ 12:23 AM 0 Comments

Wednesday, May 13, 2009

Tick... tick.... tick... BOOM!!!

BBC: US plans derivatives regulations

The US Treasury wants more regulation of derivatives - the complex financial instruments that brought down some of Wall Street's biggest names. Check this paragraph out, before they edit it: Perhaps the most noptorious form of derivative is the credit-default swop.

Posted by devo @ 11:43 PM 2 Comments

Definition of the term

Wikipedia: Green shoots

Green Shoots: A term used in the Great Recession to indicate signs of economic recovery. This term is mostly associated with Fed Chairman Ben Bernanke. The term became popular in March of 2009 after Ben Bernanke used the term in a March 15th, 2009 interview with CBS 60 Minutes.

Posted by drewster @ 11:22 PM 4 Comments

Video Ayn Rand interview speaks of "robber barons"

The Silver Bear Cafe: Ayn Rand Interview 1959 part 2

In this 1959 interview, her first on television, Ayn Rand capsulizes her philosophy for CBS's Mike Wallace. The discussion ranges from the nature of morality to the economic and historical distortions disseminated about the "robber barons." At 6.40 "she says current liberal governments are creating capitalists with government help, which is the worst of all economic phenomenon". Very relevant to today...

Posted by mountain goat @ 10:42 PM 3 Comments


Times Online: Farewell deflation: now inflation is the fear

This article is a meaningless ramble about inflation. My opinion is that the BoE is successfully suppressing gilt yields by inducing devaluation. By dictating the "return" price and maintaining legislation against (against as in hostile) pension funds and whomever else is legally obliged to hold gilts, they are providing a clean alley for foreign gilt holders to cash in and get out of sterling. To assuage the fear of default and the charade of a healthy appetite for government debt, global overproduction is being used to mask a continuing and deliberate fall in the value of sterling. I don't personally see that devaluation stops deflation, but the future economy of the UK doesn't look very rosy no matter how you do the accounts.

Posted by stillthinking @ 10:23 PM 4 Comments

Anyone still predict green shoots this year?

Bloomberg. com: California Home Prices to Fall 36% More, Fitch Says (Update1)

The carnage in the US housing market continues. Those in the UK who are buying now take note...

Posted by hotfoot @ 09:24 PM 0 Comments

Counting the Cost in USA

Bloomberg: U.S. Foreclosure Filings Hit Record for Second Straight Month

" Foreclosure filings in the U.S. rose to a record for the second consecutive month in April as banks increased efforts to seize homes from delinquent borrowers. A total of 342,038 properties received a default or auction notice or were seized last month, RealtyTrac Inc. of Irvine, California, said today in a statement".

Posted by alan @ 07:57 PM 0 Comments

More from PropertyWatch

BBC: Buying at peak - from boom to bust

HPCers might remember George from the original series of The Truth About Property. Back in 2007 he had just sold his RTB council house in London, making a cool 500,000 profit. He was able to buy another house outside London mortgage-free, as well as splashing out on a fancy car. Unfortunately this was not enough for him, and he decided to get into the BTL game, buying another two properties to rent out. Now with his tenants in arrears and his house values crashing, he has been well and truly pwned. Hearty comedy LOLz ensue.

Posted by little professor @ 05:15 PM 16 Comments

Property Losses - Counting the cost

SKY: Largest UK Property Firm Posts Record Loss

The UK's largest property company, Land Securities, posted a record loss last year, as its shopping centres and offices slumped in value. The FTSE 100 company reported a loss after tax of 5.19bn

Posted by alan @ 04:22 PM 4 Comments

All this mess has simply been swept under the carpet. Not Long until the stench becomes too much.

CNBC: Former US Official Slams Fed for Inflation Risk

A sharp critic of the Federal Reserve and prominent authority on monetary policy on Tuesday slammed the U.S. central bank for risking inflation and warned that government action had "caused, prolonged and worsened" the country's financial crisis. John Taylor, a former undersecretary of the Treasury for international affairs and author of the widely cited Taylor Rule of central banking, ran his own numbers for the U.S. economy and said the Fed's monetary stance was way too loose.

Posted by flintster1994 @ 04:14 PM 2 Comments

Tomorrow's Council Estates

BBC News: Anger over social housing sales

I've been perusing this site for the past 3 years and I have often read comments that unsold new builds will be flogged off to RSAs, devaluing privately owned homes in the same development. Another HPC prediction comes to fruition! I've nothing against social housing but the allocation policy favours tenants who are more likely to be antisocial. RSAs should not have to show deference to council waiting lists and should be allowed to select tenants themselves after interviews etc. This would enable young working families to get social housing and HAs can select tenants who are more likely to integrate well with their neighbours.

Posted by tenant super @ 02:37 PM 0 Comments

Unenfoceable Credit Agreements

BBC News: Unenforceable Credit Agreements

The Government introduced The Consumer Credit Act 1974 to provide consumer rights and protection for people from their Lenders. The Consumer Credit Act sets out strict guidelines for the establishment, content and procedures of all credit card, loan and many other agreements. These must be followed by law by all Lenders in this Country. The Act states that if a Lender provides credit using an agreement that does not fully comply with each of the conditions of the act, it becomes an unenforceable Credit Agreement. This means that the borrower will in turn not need to repay the outstanding balance and could even be entitled to a refund of payments and compensation. If you would like further information and to challenge your agreement to asses its compliance with the Act please contact us.

Posted by debtmuncher debt advisers @ 02:02 PM 0 Comments

Sorry Brown Gets Butt Naked - I'd sooner he didn't....

The Daily Mash: Sorry Brown Gets Buck Naked

Don't know about you folks but I needed some respite... can always rely on me to post the 'Mash'

Posted by vindicated @ 12:13 PM 3 Comments

Bank Of England Inflation Report makes gloomy reading

Reuters: Recession is 'deeper than expected'

The recession has been deeper than expected and the timing and strength of a recovery is "highly uncertain", the Bank of England has said. Its latest quarterly inflation forecast revised down the outlook for the economy, predicting a 4.5% year-on-year decline in GDP - considerably worse than Chancellor Alistair Darling's Budget forecast last month of 3.5%. Inflation (currently 2.9%) is expected to fall below the 2% target and remain there for the medium term.

Posted by little professor @ 12:09 PM 17 Comments

Irish eyes ain't smiling

Irish Independent: Collapse in house prices will be good for economy

This is why Irish house prices will continue to fall and fall. We are the victims of the retrenchment of credit. No-one will lend to our banks, and they won't lend to everyone else. Every town I pass has a huge ghost estate. These houses will never sell for the prices that are demanded. The reason is simple: they are still madly overvalued. In America, the long term value of a house is roughly 14 times the annual rent it would generate. Applying that formula to a 3 bed semi in Galway, which rents for 800 per month, the house price should be 134,400. Yet the seller expects to get 335,000 for it! The average Irish house in these estates is likely to fall by anywhere between 50pc and 60pc in the next few years. And even that is assuming that prices don't undershoot.

Posted by little professor @ 12:02 PM 4 Comments

More on Lax Regulation and Greed

CityWire: Liar loans and the case of the sleeping regulator

Heres an unsurprising fact that emerged yesterday: in 2007 some 45% of mortgages were advanced without a check on the borrowers income. Some of this was fast-tracked by the lender a euphemism for cutting corners to keep costs down and volumes up. An increasing amount, however, was self-certification, where the borrower certifies his or her own income without providing payslips or equivalent, and the lender believes them. It was all nonsense, of course.

Posted by lukeskywalker @ 11:58 AM 0 Comments

How long will this market rally last?

MoneyWeek: How long will this market rally last?

"The rally we have seen over the last two months has been exceptional. I know these are exceptional economic circumstances but they are exceptional because they are so bad. Yet a number of people are saying that a new bull market has begun."

Posted by damien @ 11:48 AM 7 Comments

London and NY are finished as global financial centres

The FT: Amid economic rubble, Shangkong will rise

Once the global recovery begins, however, New York and London might be vying less with one another than with a new competitor in the form of a partnership between Hong Kong and Shanghai call it Shangkong a highly consequential shift of financial gravity to the east.

Posted by sold 2 rent 1 @ 10:39 AM 8 Comments

Hazel you should pay back all profits made at the taxpayers expense

Guardian: Hazel Blears attempts to rebuild reputation with 13,332 cheque

Now we know the real reason for property ramping by the government - they couldn't rain in the housing market because of greed

Posted by matt_the_hat @ 09:12 AM 34 Comments

Who would've thunk it?

Times: Buy-to-let landlords struggle to repay their loans

Tens of thousands of landlords are struggling to meet their mortgage repayments, as the economic downturn devastates the buy-to-let market, according to a new report. Moodys, the ratings agency, released figures yesterday showing that 3.55% of landlords were at least three months behind with mortgage payments in the first quarter of the year compared with 0.95% in the same period a year ago. Repossessions of buy-to-let loans had also risen marginally.

Posted by little professor @ 03:15 AM 7 Comments

DCLG: -1.3% MoM, -13.6% YoY


The rate at which house prices are falling has begun to slow as the shadows lift off the property market, official figures show today. The fall in the average cost of a property between February and March eased to 1.3 per cent from a 2.7 per cent dive, according to the Department of Communities and Local Government. Property values sank 13.6 per cent year-on-year in March putting the average price of a UK property at 187,193. There was more good news yesterday from City watchdog the Financial Services Authority. Chairman Lord Adair Turner said at their London conference there would be fewer repossessions than in the early 1990s slump.

Posted by little professor @ 03:03 AM 13 Comments

Rob needs to water those green shoots

BBC: Should we save building societies?

Peston: I know I've said that funding conditions in financial markets have been improving, that the risk of another cataclysmic banking crisis has diminished very significantly and that the rate of contraction of our economy appears to be slowing down, but...

Posted by devo @ 12:23 AM 2 Comments

These buyers may be vulnerable when interest rates begin rising, potentially triggering a jump in fo

Bloomberg: Australia May Face Debt Crisis From Grants to Young Home Buyers

Were mirroring what happened to the U.S. three years ago, when people who shouldnt have been in the market bought houses, said Martin North, managing director of Fujitsu Australia, a Sydney-based property-consulting company. Its a strategy set for an unfortunate outcome.

Posted by chris @ 12:17 AM 0 Comments

Tuesday, May 12, 2009

The goalposts have just been moved

BBC: UK recession 'less bad than 1929'

The National Institute of Economic and Social Research today said that 'while its figure of 1.5% made the fall in output less steep than the 1929 recession, it is still greater than the 1979 recession, the largest previous fall since World War II.' So in other words the current recession in the UK is worse than the last big one when the Tories were in power after the failure of the Callaghan led Labour government.

Posted by enuii @ 10:30 PM 3 Comments

Phew, what was all the fuss about?

Bloomberg: Greenspan Sees Seeds of a Bottoming in U.S. Housing Market

May 12 (Bloomberg) -- Former Federal Reserve Chairman Alan Greenspan said that the U.S. housing market may be on the verge of recovery and that its very easy to see financial markets continuing to improve. We are finally beginning to see the seeds of a bottoming in the housing industry, Greenspan said today during a conference of the National Association of Realtors in Washington. The U.S. is at the edge of a major liquidation in the stock of unsold properties, which may help to stabilize prices, Greenspan said.

Posted by flintster1994 @ 08:56 PM 2 Comments

Are we approaching the bottom?

Guardian: Britain may be over worst of recession, OECD predicts

The Paris based OECD indicate that there is a slowing in the pace of the economic slowdown in the economies of the UK, France, Italy and China. The OECD's leading indicators are a basket of economic data that in the past have had a good record of showing economic turning points. Interestingly enough the US is showing no such trough, which is surprising as economists and myself always saw the US rising out of recession first.

Posted by denzil @ 08:23 PM 5 Comments

BBC producers trying to rescue their portfolios as usual

Guardian: Property Watching got us into this mess

BBC2's Property Watch does not expose the realities of Britain's housing situation; it is part of the delusion says the Guardian, time to drop their own snooping around. We met James, 27, a swimming instructor in Manchester, hoping to get his foot on the all-important first rung of the ladder. Tonight we'll find out if he is going to find his "dream home". Comedy surely

Posted by mken @ 05:18 PM 1 Comments

FSA Eyes New Padlocks for their Empty Stable

CityWire: FSA's Turner considering new mortgage regulation

We could be proposing mortgage regulation as a means to reduce the amplitude of economic cycles, said Turner, adding that high house prices and volatility in the property sector led to volatile consumer behaviour. Later in the article some people whose bonuses so depended on their ability [when every time house prices got too unaffordable and customers that fell within their rules all dried up] to loosen their lending criteria, bemoan the FSA's ideas.

Posted by lukeskywalker @ 05:17 PM 2 Comments

FTB's jumping back into the market

UK bubble: First Time Buyers can't wait out the crash

Oh dear, FTBers might be buying into that real estate hype about the housing market stabilizing.

Posted by inflationwatch @ 04:44 PM 0 Comments

Green Shots!

BBC: UK jobless total hits 2.2 million

The number of people out of work in the UK rose 244,000 to 2.22 million in the first three months of 2009, the Office for National Statistics (ONS) said. The jobless rate rose from 6.7% to 7.1%. Unemployment benefit claimants in April rose 57,100 to 1.51 million.

Posted by peter_2008 @ 04:13 PM 11 Comments

How the bubble burst

BBC: How the bubble burst in N Ireland

With prices plummeting, buyers are afraid of buying a house that is going to fall in value and wipe out their deposit.

Posted by doomwatch @ 04:00 PM 3 Comments

Reposessions can happen north of the border too...

BBC News: 2.5m price for repossessed home

Pity the poor owner who ran out of money...

Posted by bimlam @ 01:53 PM 0 Comments

Time to go

FT: Amid economic rubble, Shangkong will rise

Both New York and London will be nursing serious wounds for years. In both cases, budget deficits will be gigantic, resulting in higher taxes and cutbacks in public investment in the kind of services transportation, education, even culture that attract talent. In each city we can expect a big increase in financial regulation, not to mention ad hoc government interventions, adding to the cost and unpredictability of doing business. Controversies about financial remuneration will cause many professionals to seek other types of employment.

Posted by adarmo @ 01:51 PM 0 Comments

But the Recession 'could be over by August' says OECD !

Mail Online: Legal & General to axe 560 jobs as unemployment set to hit 2.5m this summer

The finance industry was dealt a fresh jobs blow today after insurance giant Legal & General announced plans to axe up to 560 posts. The Unite union said it had been told the cuts will affect staff in the firm's offices across the country. The news comes just 24 hours before the latest figures are expected to show another steep rise in unemployment. Data is expected to show the jobless total is on course to hit 2.5million over the summer.

Posted by cheekie charlie @ 01:47 PM 0 Comments

Great Bear Food

Bloomberg Video: Federated's Tice Sees S&P 500 at 400 Within Six Months

Federated's Tice Sees S&P 500 at 400 Within Six Months.

Posted by tyrellcorporation @ 01:44 PM 12 Comments

Inflation starts this autumn

Market Oracle: This is Not the 1930s Depression, Which Means High Inflation to Come

In his April 3rd Interest Rate Observer , James Grant reported that the combined Federal Reserve and US government response to this economic crisis, defined as the change in the Federal Reserves balance sheet plus the US governments fiscal deficit as a percent of GDP, is some 30% of GDP. To put that number into perspective, thats 10 times the postwar recession average of 2.9% and 3.5 times the previous record of 8.3% seen in you guessed it, the Great Depression.

Posted by sold 2 rent 1 @ 01:36 PM 42 Comments

A lesson for the greedy

BBC: Buy-to-let gone wrong

Staggering she was lent the cash to do this.

Posted by doomwatch @ 01:12 PM 34 Comments

Global Debt Entrapment

Market Oracle: Global Debt Enslavement - From Gold Reserves to Petrodollars

Reviewing Ellen Brown's "Web of Debt:" Part III - This is the third in a series of articles on Ellen Brown's superb 2007 book titled "Web of Debt," now updated in a December 2008 third edition. It tells "the shocking truth about our money system, (how it) trapped us in debt, and how we can break free." This article focuses on global debt entrapment.

Posted by sold 2 rent 1 @ 01:00 PM 2 Comments

Future tax situation looking unpleasant

Tax-News: UK Tax Freedom Day Falls On May 14

Tax freedom day as actual revenue paid falls on May 14th. So Jan, Feb, Mar, Apr, and half of May you work purely for the state. Now, the bad news is that if we were actually funding current government spending 100% (they were not borrowing) then tax freedom day would be Jan, Feb, Mar, Apr, May, June 25th. Ultimately we do have to cover government spending in one form or another so...

Posted by stillthinking @ 12:27 PM 0 Comments

RICS own overview and download of report

RICS: Housing Market Survey April 2009

Further rise in buyer enquires but new instructions fall again Other key points: Rising buyer interest fuels greater sales activity Changes to Home Information Pack (HIP) rules lead to a sharp drop in new instructions Increase in sales to stock ratio for fourth consecutive month suggests prices could stabilise later in the year The seasonally adjusted net balance of surveyors reporting falling rather than rising prices posted a marked improvement in April. At 59.9, the series remains deeply in negative territory but this still represents the best reading since January 2008.

Posted by wdbeast @ 11:46 AM 5 Comments

"not over-valuing of course"

BBC: Property Watch 1. Are We at the Bottom Yet?

Tom the EA on selling 2 years ago: "... you were going out and sort of valuing property and then probably adding some on. Not over-valuing of course ..."

Posted by doomwatch @ 09:52 AM 26 Comments

Great! Apparently we're booming again. - Is Gordon Brown about to be saved by the weather?


HIGH street stores have enjoyed their biggest sales bounce in three years. The fine spring weather has encouraged people to step out and spend as the economy starts to show signs of recovery. And with the Met Office predicting a long, hot summer, the upward trend is expected to continue and further bolster consumer confidence. The figures show that stores last month saw their strongest year-on-year sales growth since April 2006.

Posted by tyrellcorporation @ 09:39 AM 11 Comments

DCB in technicolour?

FT: House prices at auction continue to fall

5 month MACD....

Posted by techieman @ 09:31 AM 8 Comments

Woops: Looks like is is a Brown manufactured failure (if we didn't know)

Telegraph: Ministers 'to blame' for financial crisis

Institute of Economic Affairs (IEA) has concluded that the disaster was caused by authorities' mistakes rather than market failures. And it was Mr Brown who created the system of monifotring

Posted by growler @ 07:17 AM 6 Comments

Trapped by the knights who say ni!

Telegraph: Jobless in Henley: My mortgage lender won't let us move house

"Recession diarist Julie Salt says we are being trapped in our own homes by the Black Knights of the financial services sector. Our mortgage protection insurance exposed the first chink in our personal armour after my husbands secure job disappeared in redundancy. As extra fortification for just this eventuality for twelve years we paid 40/month into a mortgage protection policy. When we needed to activate the payments the company required us to sign on for Jobseekers Allowance, enabling us to receive mortgage payments after sixty days of unemployment had elapsed. Although it is standard for insurance companies to set deferment periods, it is hard to predict before you are actually under siege what this will mean for you in practise."

Posted by drewster @ 01:09 AM 12 Comments

RICS report (misleading headline)

Telegraph: House prices in Britain rise for first time in 18 months

The latest property market survey from the Royal Institution of Chartered Surveyors (RICS) showed fewer estate agents are now reporting falling prices. It said 59.9% more estate agents said prices were falling rather than rising in April compared to the previous month - the highest figures since January 2008. In March, it was at 72.1% The number of new buyer enquiries also increased, climbing for the sixth month in a row to its highest level in almost a decade. It has translated into a rise in sales with the number of properties that estate agents are selling over three months edging up from 9.7 in March to 10.6 in April. Jeremy Leaf, an RICS spokesperson, said: "There are tentative signs that the market is starting to pick up."

Posted by little professor @ 12:14 AM 16 Comments


Evening Standard: Soros: we are on road to recovery at last

The economic freefall has been stopped, the collapse of the financial system averted, he insisted. Billionaire Mr Soros, 79, added: National economic stimulus programmes are starting to take effect. ... so the pundits can now start twittering.. "George Buckley, chief UK economist at Deutsche Bank, believes the economy could start to grow again next month"... wait that Money Weak will capitulate next

Posted by confused76 @ 12:09 AM 13 Comments

Monday, May 11, 2009

Trichet arrives at Green Shoots Station after train has left.

FT: Downturn bottomed out, Trichet signals

Jean-Claude Trichet signalled on Monday that the global downturn had bottomed out with some large economies already able to put the recession behind them and look forward to renewed growth. The European Central Bank presidents comments on Monday in Basel, Switzerland, had added weight because he was speaking on behalf of the worlds leading central bankers, not just for the eurozone. His remarks came as the Organisation for Economic Co-operation and Development said there were signs of a pause in the economic slowdown in France, Italy, the UK and China.

Posted by devo @ 11:40 PM 4 Comments

The Guardian smells the coffee

Guardian: Gordon Brown must go by June 5

Politics tests character, often to destruction. The character of some ministers, their shadows and MPs of all parties has been wrecked by exposure of their expenses. How can those caught pilfering from the public purse denounce benefit fraud? How can those with state-purchased silk cushions support the cash-limited social fund that denies beds and blankets to families sleeping on bare boards? MPs with fingers in the till will blush to justify paying the unemployed 60.50 a week to live on. Nor can they rant convincingly at City greed or tax-dodgers fleeing to Guernsey.

Posted by confusedsaver @ 10:13 PM 5 Comments

Did MP's run the UK economy so that they could fill their boots?

Telegraph: MPs could face income tax bills over expenses

Section 292 of the Income Tax (Earnings and Pensions) Act 2003 Act states that no income tax liability arises from allowances paid to MPs for additional expenses necessarily incurred by the Member in staying overnight away from the Members only or main residence, for the purpose of performing parliamentary duties. However, we now know that to avoid paying capital gains tax MP's have been stating to HMRC that their second home was in fact their primary home! The timing of this act is interesting as in 2004 interest rates should have been raised but were in fact reduced (often rumoured due to political pressure) thus causing the boom in the housing market. Therefore a layman might conclude that MP's have run the UK economy for the sole purposes of filling their boots!

Posted by who stole my pension? @ 02:42 PM 29 Comments

Propertywatch quiz

BBC: Propertywatch quiz

Propertywatch, a new BBC Two series, broadcast from 11-14 May, looks at property prices and the downturn and attempts to sort out property fact from fiction. So, how much of a property expert are you?

Posted by doomwatch @ 02:21 PM 8 Comments


BBC: 'Modest' Beckham home to be sold

In short, EA advertised for 850,000. Now being sold by auction under a guide price of 215,000. But EA reckons it is really worth at least 500,000. If you want to experience the UK HPC in a miniature mode, this is it.

Posted by peter_2008 @ 01:03 PM 20 Comments

BBC Two's Property Watch Have Your Say

BBC Two's Property Watch is due to start soon, its meant to reflect our thoughts and views on the market. Here is a link to some of the views people have put forward so far, seems like most views are swinging one way. Bet when the series hits the screens though the bias will be thrown the other way despite the peoples opinion. (Be very supprised if the BBC stays neutral in this subject!)

Posted by ade @ 12:41 PM 7 Comments

Why we should have let the banks go bust

MoneyWeek: Why we should have let the banks go bust

Banks crippled by their own reckless lending should have been allowed to fail. But now, having bailed them out once, we'll have to do it again. And that could ruin us for years to come.

Posted by damien @ 12:06 PM 8 Comments

If mortage rates are rising now, how will things be when the base rate goes up?

Telegraph: Mortgage rates on the rise

"Ray Boulger, a mortgage expert with broker John Charcol said that the profits lenders were making from home loans were now the highest for a very long time, with banks and building societies putting up their rates to protect their profits ahead of the expected surge in repossessions later this year."

Posted by quiet guy @ 11:10 AM 11 Comments

Just pay it all back like everyone else

Daily Mail: MPs' EXPENSES: The second home shuffle - how Easy Rider Hazel Blears took a short cut on tax

A member of the public would be facing possible criminal prosecution for this potential tax evasion. MPs saying sorry, just won't cut it this time. They should pay back their ill-gotten gains with the reduculous HMRC interest rates they charge for back tax.

Posted by doomwatch @ 10:09 AM 3 Comments

M. S. Webb & producer of BBC2 miniseries this weeek chats toi SN

BBC 5 Live: Steve Nolan

1 hour 23 mins in (just after Ken Dodd review), IS she buying? About 10mins..

Posted by techieman @ 09:42 AM 7 Comments

High house prices weakening rural areas

Telegraph: Village life 'will die within a generation' as costs force young people to cities

The National Housing Federation reports on the exodus of young people from rural areas, influenced by unaffordable housing. "younger workers are priced out of villages due to an influx of wealthy commuters, second home owners and retirees." Seems fair enough that wealthy commuters and retirees want to live in rural villages but second home owners needs some discouragement.

Posted by mountain goat @ 08:43 AM 12 Comments

More about Flippin' Expenses

Telegraph: David Cameron's cabinet drawn into expenses scandal

The Telegraph can disclose that Michael Gove and Andrew Lansley flipped properties designated as their second homes to claim allowances for multiple properties at taxpayers expense. "Andrew Lansley, the shadow health secretary, spent thousands of pounds renovating a thatched Tudor country cottage shortly before selling it" etc.

Posted by alan @ 02:23 AM 12 Comments

Housing Bubble: Recommendations

Independent: IPPR calls for cap on mortgage lending

Strict new controls on mortgage lending are crucial if Britain is to avoid further house price bubbles in the future, a leading think tank with close links to the Government will say today. The Institute for Public Policy Research (IPPR) will argue that mortgage lenders must be made the subject of mandatory curbs on the scale of home loans if the country wants to avoid making the mistakes that lead to the credit crunch all over again.

Posted by alan @ 02:11 AM 7 Comments

Homebuyers in lurch as state help exhausted

The Times: Homebuyers in lurch as state help exhausted

I hope you appreciated my humour in using the article headline as my own. First paragraph of the article: "First-time buyers using a government scheme to get on the housing ladder have had to pull out of purchases at the eleventh hour after funding ran out." It's over. The big debt party is finally reaching the end.

Posted by quiet guy @ 01:15 AM 4 Comments

So who are going to by these "highly desirable" investment in 20 years time?

BBC: House prices 'force rural exodus'

More than 100,000 young adults will leave the English countryside over the next three years due to a shortage of affordable housing, research suggests.

Posted by peter_2008 @ 01:10 AM 5 Comments

Sunday, May 10, 2009

Chancellor forced to reassure senior figures from the Chinese government about Britain's creditworth

Telegraph: Money printing starting to work, says Bank of England

The Chancellor will today be forced to reassure senior figures from the Chinese government about Britain's creditworthiness. The ministers, who are on an economic delegation to the UK, have expressed their concern that quantitative easing, alongside large levels of western public debt, will destabilise the world economy. Given that China is one of the biggest consumers of government debt from both the US and the UK, there are fears that the country may turn a cold shoulder on British debt in the future.

Posted by devo @ 10:25 PM 25 Comments

Americans did not cause the financial crisis, the world's central banks did

BrookesNews.Com: Americans did not cause the financial crisis, the world's central banks did

Stupidity and not a sinsiter financial cabal are to blame for our asset bubble? A very interesting take on why this all happened

Posted by the number cruncher @ 09:12 PM 1 Comments

Council to get tough on developers - hopefully

Wrexham Chronicle: TWO thirds of home hunters cant buy terraced house Wrexham

MORE than two thirds of home hunters in Wrexham still cant afford to buy a basic terraced house. Even though average prices have fallen by 10,000 in the county, 68% still cant get their foot on the housing ladder, according to council figures.

Posted by uncle chris @ 08:39 PM 3 Comments

Don't meddle with markets!

Bloomberg: Australia May Face Debt Crisis From Grants to Young Home Buyers

Australian Prime Minister Kevin Rudds bid to ensure his housing market avoids the global property slump may push a generation of buyers into a debt crisis. Grants of as much as A$21,000 ($16,142) to first-time buyers and the lowest interest rates in 49 years have emboldened more than 40,000 young Australians to take out home loans since October, stoking demand for properties that cost less than A$500,000. These buyers may be vulnerable when interest rates begin rising, potentially triggering a jump in foreclosures that will drive down property prices, cut profits at banks and damp household spending, which accounts for half the economy.

Posted by tyrellcorporation @ 08:39 PM 3 Comments

Trapped into living with the ex

BBC News: Trapped into living with the ex

"A 70,000 loss on the house was too much for Gemma and Ben to take, so they have resigned themselves to living together until property values go back up." Looks like they will be stuck with each other for some time then!

Posted by becky @ 07:14 PM 9 Comments

We've been saying this for a while now!

Telegraph: David Blanchflower not the blooming sage they make him out to be

By Liam Halligan "Blanchflower joined the MPC in June 2006. From then on he regularly called for the Bank to lower borrowing costs into the face of high and rising inflation and was generally the only dissenting voice. So he became closely associated with the notion that if you've got a problem, all you need to do is cut rates. Blanchflower says he called for deep cuts as he feared recession and wanted the Bank to "get ahead of the curve. I think that's misguided. Low rates helped cause this crisis, and slashing rates almost to zero since has, in my view, done more damage still. Both monetary and fiscal policy in the UK are now wildly expansionary to an extent that is extremely counter-productive. Our current policy stance is storing up enormous future problems."

Posted by drewster @ 12:31 PM 12 Comments

"Remember to pay your capital gains taxes" sqeals the diminutive ginger foghorn

Press Association: Blears on defence over second flat expenses

It appears Mrs Blears has had her snouty deep in the trough.Her second home flat had been designated as her "second home" under Commons rules, meaning she was able to claim back thousands of pounds in mortgage interest and running costs. But the flat was simultaneously registered with the taxman as her primary residence, enabling her to dodge paying 40% capital gains tax on the proceeds from selling the flat. Shows how corrupt our MPs and their expenses system has become.

Posted by paul @ 11:46 AM 4 Comments

And you thought it was all over

Money week: The bad news from banks is just beginning

maybe the Bank has a better grip on reality than the stock market. Because news from the banking sector suggests that the optimists are being a bit premature in hoping that this slump will end any time soon...

Posted by happy mondays @ 11:17 AM 4 Comments

Bank of England: "Hyperinflation is coming"

Telegraph: Bank of England: recovery to be V-shaped

"It is likely to use its key quarterly Inflation Report, published on Wednesday, to raise its projection for the consumer price index over the next two years"........"The MPC is likely to have to cut its immediate projection for gross domestic product in the coming months, but will predict that growth will rebound vigorously towards the end of the year." So all those companies who have sacked 1,000s of people are going to just give them back again? Because suddenly we are all going to start buying TVs and houses again? Inflation may be V-shaped but GDP? ------ Gordons, BoE maths... GDP = consumption + gross investment + government spending + (exports − imports), so if compumption, gross investment, exports, imports are all approx zero, then GDP = goverment spending!!!

Posted by neil @ 10:36 AM 1 Comments

Read this.

Cynicus Economicus: Lies, lies, lies.

It is at this point that we need to pause, take a long breath, and actually consider what it is that the banking system is for. In the many bailouts and rescues, we simply hear that the financial system must be saved, but do not hear what it is supposed to actually do. The standard line being trotted out is that the banks must be saved to get credit moving again. The question here is why it is that the limited numbers of banks that have received most of the various support measures are so important, and that is the question of what financial services are actually there for. It is when we ask this simple question, this blindingly obvious question, that we can see the level of the fraud that is being done to the taxpayers and the damage to the wider economy.

Posted by devo @ 09:25 AM 7 Comments

A Good Answer to the recent Green Shoots Rhetoric

Write About Property: UK House Prices: Decline Maybe Slowing but Worst Far from Over

Goes through the reasons for optimism that the UK housing market may be on the turn, and answers them with cold hard reality.

Posted by problem pete @ 09:23 AM 0 Comments

Green Shoots in Growth of Comedians

Sunday Times: House prices 'up by the end of the year'

It starts off "Lloyds, Britains biggest lender, has predicted house prices have only 6% further to fall and could rise by the end of the year. " From there the jokes keep on coming. It must be tough running a newspaper, with all that pressure to keep advertisers happy. I wonder, are courses in ethics included in the BA Media Studies (or whatever it is that journalists do).

Posted by sbr287 @ 05:23 AM 2 Comments

Saturday, May 9, 2009

Meet the new BTL landlords

Times: Should you gamble by investing in property?

Pension funds are seeking to become the new buy-to-let landlords amid growing signs that the residential property market is over the worst. Legal & General, the insurer, is contemplating its first foray into residential property through a government scheme to develop new homes that it will let to private tenants. Bill Hughes, head of property at L&G, said: House prices have fallen 15%-20% since their peak, making residential property significantly more attractive to us. As capital values have fallen, the income we can make from investing has increased. Supply of new housing remains constricted, and this boosts the prospects for the sector. Hughes said he would hope to get a yield of 6% after costs.

Posted by little professor @ 11:45 PM 14 Comments

Deliberately provocative

The Times: RBS chief Stephen Hester wants taxpayer to bear greater share of potential losses

Royal Bank of Scotland (RBS) is pushing to sweeten the terms of a huge government insurance policy in an attempt to force taxpayers to shoulder a greater share of its potential losses on bad loans.

Posted by devo @ 10:43 PM 6 Comments

It makes me puke

Times: Huge profits from sale of homes renovated with taxpayers money

While Mr Hoon was Defence Secretary and Leader of the House, he lived in a grace-and-favour apartment in Whitehall and used his constituency home in Derbyshire as his second home. Mr Hoon was able to claim the second home allowance and expenses to pay for thousands of pounds worth of renovations and refurbishments. During 2004 and 2006 Mr Hoon recarpeted his home, which he had owned since 1986. Before living in Admiralty Arch in Whitehall, Mr Hoon had another flat in London, which he subsequently rented and then sold. That property was bought for 150,000 in 1991 and disposed of for 475,000.

Posted by confused76 @ 07:49 PM 6 Comments

The lady is for turning

Merryn Somerset-Webb: Nikkei knack

"A mere 25 per cent of financial advisers think that the recent massive rally in the stock market - the FTSE 100 is at a four-month high - represents the beginning of a new bull market. So what makes me worried about that? It isn't that I think this is the wrong view. No, it is that I absolutely agree. It's being part of the consensus that makes me feel mildly uncomfortable"... the lady is ready to turn

Posted by confused76 @ 07:32 PM 9 Comments

I know it's not really on topic but ...

BBC 'News': Risks and gains of expenses leak

Well it does detail MPs expenses on second and third homes which is relevant. Anyway, I wanted to highlight the BBC's deeply questionable stance on the disclosure of MPs expenses in context of the BBC's remit. In this article the BBC argues that the 'risk' of exposing how much taxpayer money MPs are spending is that the newspaper might not be completely correct and that would affect the nespaper's credibility. Excuse me? I think the public would be prepared to take that risk - TO EXERCISE THEIR LEGAL RIGHTS UNDER THE FOIA DISCLOSURE RULES. Honestly. This article and the deafening silence of the BBC on baroness Uddin's breathtaking expense claims are the nail in the coffin of the BBC's remit to provide 'unbiased reporting' under the BBC Charter.

Posted by paul @ 06:57 PM 5 Comments

The capitulation of the financial tabloids

FT (Financial Tabloid): Spectre of rising bond yields looms over rally

You have to feel sorry for these clowns, as they have to fill the 30 odd pages of the pinkish paper daily (bar Sunday). John Authers, how can he ever look credible with his goatee beard and sardonic grin? "The rally in world stocks is into its third month. One question dwarfs all others: is this a new bull market, or just a rally within the bear market? But this might not be the right question. What if these options turn out not to be mutually exclusive?" HAHA, in other words: "i do not know if it is going up or down but that's not the question"!?... how to waste 2.50 on a weekend

Posted by confused76 @ 06:08 PM 3 Comments

First Moodys now the FSA

This Money: Building society fear as FSA tests mutuals

Moodys downgraded 9 lenders on "the assumption now being 40% falls" but stress tested for 60%. Now "The City watchdog has launched a second round of financial 'stress tests' on building societies, following on from their downgrading by ratings agency Moody's last month". 'More broadly, the key question the FSA expects the senior management of a firm to be able to answer is: what are the circumstances under which your firm will fail? Should make interesting reading, will it get made public? Does anyone know why This Money has removed the Moodys downgrades from the info on each lender in their "How Safe is your Bank" build soc section? It was there a few weeks ago but seems to have been taken off, why?

Posted by sybil13 @ 05:07 PM 0 Comments

Recession Monopoly How the recession changed the game of Monopoly

Just because we are in a bit of an economic downturn doesnt mean we cant have a little fun, so long as that fun is relatively inexpensive, of course.

Posted by paranoia blue @ 04:52 PM 1 Comments

Forensic dissection of the America bubble

City Journal: Obsessive Housing Disorder

There is an embarressment of choices for quotes in this long and damning critique of political interefence in the American housing market. It's a long article but well worth the effort. I will content myself with the last paragraph: "Ultimately, the goal should be to end subsidies that amount to a government project to direct homeownership to places where Washington believes it should be taking place. That kind of political meddling in this vast marketplace has wreaked havoc time and again, and will continue to do soif we keep letting it."

Posted by quiet guy @ 04:19 PM 0 Comments

Customers finally bite back

Las vegas sun: Customers sue KB Home, allege rigged appraisals, inflated prices

Representatives of the plaintiffs allege that KB Home, Countrywide and LandSafe Appraisal Services conspired over a three-year period to sell 14,000 homes in Nevada and Arizona with rigged appraisals that overvalued the homes by tens of thousands of dollars. In two KB Home subdivisions cited in the complaint, sampled appraisals were inflated by about $82,200 per property, the lawsuit alleges. Even if we used a more conservative $20,000 per property, this alleged scheme would add $280 million in ill-gotten profits in KBs pockets, said Rob Carey, an attorney representing the homeowners.

Posted by mark @ 11:27 AM 2 Comments

Blatant FT property ramping using selective statistics

FT: Slump in UK homes up for sale

This front page headline article claims that there is a large drop in property on offer for sale over the past year - typically around 25% - without once mentioning that most of the property that is no longer on offer was priced completely unrealistically, and thus could be said not to have been on offer to begin with. The fact that prices are still falling is not considered a sign that supply at reasonably saleable prices still exceeds demand.

Posted by mark @ 11:05 AM 8 Comments

With pensions gone, retirees are back in the job market

FT: Desperate baby boomers return to work

60-year old Eva Coffey had planned for retirement before the recession hit. Her and her husband have two [terraced houses] as investments, but these have dropped in value from $450,000 each to $275,000 for the pair. Their savings, which were largely in mutual funds, have halved. Im not going to retire. Cant afford it, she says. You still have to put the food on the table and [petrol] in the car. Instead of pushing older Americans like Ms Coffey out of work, the economic slump has forced more of them back into it. Before the recession, about 15% of baby-boomers said they intended to work until they died. That has risen to more than 25% according to one survey.

Posted by drewster @ 09:30 AM 8 Comments

History says fill your boots, sell your wife, dive in.

The Times: Investors bet that worst of recession is over and predict new bull market

Anthony Bolton, a respected financial adviser and stock-picker in London, predicted: All the things are in place for the bear market to have ended . . . If you wait for things to get better, youll miss the rally. David Schwartz, a prominent stock market historian, said that lessons from the past century of share price ups and downs pointed decisively to a new bull market. History says fill your boots, sell your wife, dive in, he told The Times.

Posted by devo @ 12:12 AM 30 Comments

Friday, May 8, 2009

Surprise 50bn cash injection is attempt to avert new phase of credit crunch

The Guardian: Bank of England braced for third wave of financial crisis

On Thursday the Bank surprised the City by announcing that it would pump an extra 50bn of new money into the economy despite recent stockmarket rallies. Now the Guardian has learned that this increase in quantitative easing was driven by fears in Threadneedle Street that the credit crunch is still sucking the life out of the British economy and the banking sector remains in deep trouble. Richard Lambert, director general of the CBI, said: "The fact is that for all the injections of taxpayers' money, the credit markets are still not working properly."

Posted by devo @ 11:53 PM 3 Comments

Bad news best left till last thing on a friday, now move along.

Mail: Royal Bank of Scotland delivers bleak bad debts forecast

Chief executive Stephen Hester reveals that bad debts will soar over the coming year as customers struggle to keep up with their repayments with losses from soured loans quadrupling to 2.9billion in the first three months of 2009. Hester said: 'We'll make a loss for a period of time. We're facing substantial recessions in all the countries in which we operate and we see no greens shoots in our credit exposure.'

Posted by enuii @ 10:31 PM 6 Comments

"The banking crisis is over" yeah, right.

FT: Fannie Mae taps Treasury for further $19bn

Fannie Mae said on Friday it would draw a further $19bn of assistance from the US Treasury after a seventh consecutive quarterly loss $23.2bn in the first quarter drove its net worth below zero. Fannie said it expected more red ink in future quarters, which would require further help from the government.

Posted by devo @ 05:12 PM 2 Comments

Uncle Sam's subprime Treasure

FT: Markets fear rising bond yields Worrying trend overshadows stress tests

Short little video from the FT's John Authers. Banks are out of frying pan now but Government debt problems just starting. Simple really follow the trail of toxic assets.

Posted by mountain goat @ 04:18 PM 2 Comments

Now the down-turn hits down under

MoneyWeek: Now the down-turn hits down under

Recession has arrived in Australia, which is now set for its first full-year contraction since 1991. So how is the country set to ride the storm?

Posted by damien @ 02:36 PM 0 Comments

Blame this crisis on the myth of inflation

The Times: Blame this crisis on the myth of inflation

"Debt and house prices were shooting up. But keep one thing under control, we were told, and everything would be fine"

Posted by becky @ 12:28 PM 8 Comments

BBC on ramping overdrive today

BBC: Do the green shoots have roots?

If you're looking for signs of springtime in the housing market, the estate agents reckon they are coming across them every day: buyers returning, offers being made, houses that have been on the market for more than a year finally selling. The greenest of the green shoots was perhaps the data from the Halifax in March, showing house prices rose by 0.9%. And we know that the number of people getting mortgages to buy houses is sharply up, by 19% compared to the last quarter of last year. There are good reasons why there should be green shoots. Low interest rates and falling house prices mean that home ownership is cheaper than it has been for most of the last decade.

Posted by little professor @ 12:04 PM 8 Comments

Are we near the bottom yet?

BBC: Are we near the bottom yet?

BBC Two's Propertywatch is running a series of programmes on property prices and the economic downturn and would like to hear from you if you are moving soon or even just thinking about it. In the first of four programmes we are looking at whether you think the housing market has hit the bottom or whether it still has a way to go. Tell us your stories and experiences. Please remember to plot you location so your comment will appear on the property map. Do you think that house prices have got further to fall? Do you think they're bottoming out? Are there signs in your area that prices are picking up or sales activity is getting busier? Are you struggling to sell and haven't seen any silver lining yet? Is now could be a good time to buy?

Posted by doomwatch @ 11:14 AM 27 Comments

The EAs say there are

BBC: Signs of life in the housing market.

Of the 20 agents, 17 reported an increase in sales, comparing the first quarter of 2009 with the last three months of 2008.

Posted by peter_2008 @ 10:38 AM 13 Comments

Stress Tests Posit 22% fall in US Housing Prices

Yahoo: Stress tests find 10 big banks need $75B more

The not so stressful tests are based on assumptions of unemployment rising to 10.3% and a further drop of 22% in house prices. The tests found that if the recession were to worsen, losses at the 19 stress-tested firms during 2009 and 2010 could total $600 billion. Of those losses, $185.5 billion would be from mortgages, $82.4 billion from credit card loans and $53 billion from commercial real estate loans the loans on banks' books that analysts say are now most vulnerable to default.

Posted by live4ever @ 08:49 AM 0 Comments


BBC 'News': Clear view of house price slump

A comprehensive review of house prices in England and Wales by the Land Registry has revealed the depth of the slump in early 2009. The average property price in the first three months of the year was 3.14% lower than the previous quarter and down 9% year on year. The average home cost 198,939, with the average detached house falling in price by nearly 15,000. The rate of house price falls was faster than a year ago, but slowed compared to the final quarter of 2008. The Land Registry's quarterly survey is widely considered as the most authoritative of the house price surveys.

Posted by little professor @ 01:07 AM 0 Comments

Thursday, May 7, 2009

Stress test not so stressful after all

BloombergThe Federal Reserve determined that 10 U.S. banks need to raise a total of $74.6 billion in capital: Fed determines 10 banks need to raise additional capital

The Federal Reserve determined that 10 U.S. banks need to raise a total of $74.6 billion in capital. The banks include Bank of America, which needs to raise $33.9bn, Wells Fargo ($13.7bn), GMAC ($11.5bn), Citigroup ($5.5bn) and Morgan Stanley ($1.8bn.) "The results released today should provide considerable comfort to investors and the public, said Fed Chairman Ben S. Bernanke. The examiners found that nearly all the banks that were evaluated have enough Tier 1 capital to absorb the higher losses envisioned under the hypothetical adverse scenario." The adverse scenario's projections are more optimistic than the latest IMF forecasts for US growth, employment and house prices.

Posted by little professor @ 11:41 PM 27 Comments

No cash left over to lend out in mortgages then?

Telegraph: Lloyds Banking Group expects more of its company loans to sour

Lloyds Banking Group has warned that corporate loan impairments will this year soar more than 50pc above the already overwhelming levels of 2008. In an interim management statement that was abruptly brought forward, the bank said yesterday that it anticipates further corporate defaults for the rest of the year, "notably in the commercial real estate portfolios in the UK and Ireland". It added retail bad debts would also rise "significantly". Lloyds TSB and HBOS recorded corporate impairments totalling about 9bn in 2008 pointing to a figure approaching 15bn this year. Banking analyst Alex Potter said he was "shocked" that the bank's loan book was deteriorating so quickly. Nic Clarke, another analyst, said he was "stunned". [What are these analysts paid for exactly? - D.]

Posted by drewster @ 10:03 PM 3 Comments

'The Perfect Storm'

BBC News: Changes for borrowers and savers?

Last couple of paragraphs are interesting. We know its going to happen, and it's starting to creep into the media! Andrew Montlake, director of independent mortgage broker Coreco, predicted a "perfect storm" of future interest rate increases and falling house prices. "There is no doubt that the next move in the Bank rate will be upwards and, when it comes, it could be a dramatic one," he said. "With house prices still likely to be low when rates do start to rise, many homeowners will be at the mercy of higher interest rates without being able to remortgage because of insufficient, or negative, equity."

Posted by pooodle2 @ 04:09 PM 2 Comments

House Price Drops Of Up To 52% in Dublin

Irish Times: What Dublin Buyers Are Really Paying

There are no official house price registers in Ireland that track data of sold prices so this newspaper decided to take a sample of 200 houses sold in Dublin in the first quarter of 2009 through one estate agent across a wide range of post codes. They found price drops of up to 52%, particularly in the upmarket areas. One house had an asking price of 4 million EUR in 2007 and eventually sold for 1.9 million two years later... now that's what I call a house price crash!

Posted by an bearin bui @ 03:34 PM 2 Comments

UK Housing Market Forecast

The Market Oracle: UK House Prices Bear Market Trend Forecast 2009 Update

The UK housing bear market trend is expected to moderate for 2009 from the forecast -16% towards -10%, however the downtrend is expected to continue for many more years at a shallower pace as the housing market depression will have the effect of slowly sapping the will of home owners who continue to mistakenly hold on to hope of a return of the housing boom to sell into that will FAIL to materialise as the house prices eventually drift towards the forecast for a peak to trough contraction of approx 38%.

Posted by nadeem walayat @ 02:41 PM 2 Comments

What if the UK is a person?

BBC: Fred-sizing the economy

Interesting video, which concludes that for every extra 1bn debt the UK government borrows, it is equivalent to an addional 300 annual interest payment for an average person on modal income of 15,000. Sounds Expensive?

Posted by peter_2008 @ 02:33 PM 7 Comments

Interest rates are at their lowest in the ECB's 10-year history

BBC: Eurozone interest rates cut to 1%

The European Central Bank (ECB) has cut interest rates in the eurozone to a record low of 1%, down from 1.25%. It is the seventh time the ECB has lowered its key rate since October 2008, when it stood at 4.25%, as it tries to boost the eurozone economy. Analysts do not expect the cost of borrowing to go much lower in the 16 countries that use the euro. However, the ECB may resort to using alternative measures to revive economic growth in the eurozone.

Posted by jack c @ 02:00 PM 0 Comments

I hear Robert Mugabe has been 'boosting' Zimbabwe's economy with printed money too

BBC 'News': Economy to get extra 50bn 'boost'

A breathtakingly dishonest version of what is happening. The article completely omits any mention of how the boost will be paid for, how it will affect inflation or even the IMF's very vocal criticism of the UK's recent penchant for printing money as a strategy out of recession.

Posted by paul @ 12:37 PM 32 Comments

Unusual article highlights two issues and contradicts the fantasy of labour they need to tax cars!!

Bbc: Recession 'hitting lorry numbers'

Data released by the Office for National Statistics show that a year ago there were just over 3,000 lorry divers receiving Jobseekers Allowance in the UK. Today that number is now more than 15,000 - an increase even more dramatic than that for bricklayers and masons. These figures are supported by a sharp fall off in road congestion and traffic at the UK's major ports. *************yet car drivers pay the most tax!!! yet we do not cause congestion***************

Posted by mark @ 12:07 PM 4 Comments

UK Interest rates remain on hold at 0.5%

BBC: UK interest rates on hold at 0.5%

The Bank of England has kept interest rates on hold at 0.5%, in a move that had been widely expected following a number of rate cuts in recent months. Interest rates remain at an all-time low after six cuts since October last year, when they stood at 5%. With little room for rate cuts the Bank has been pumping money into the banking system through quantitative easing.

Posted by jack c @ 12:02 PM 4 Comments

More spin: this time from the 'Not so' Independent

The Independent: House prices and business confidence raise hopes of recovery

The British economy may already have passed through the worst of the downturn, according to the latest economic indicators. Though output and house prices seem set to continue to fall for some months, the pace of decline appears to be easing CONSIDERABLY, raising expectations that stabilisation and even growth may return to the economy by the end of the year.

Posted by confusedsaver @ 11:57 AM 1 Comments

Wizards of OZ

Business Spectator: An analysis of the Australian Property Market

A bit of Pommie and Yank bashing that hurts a bit. It is always a good idea to see how economies should be managed. A very good analysis of why the UK and US are in more trouble

Posted by maddison @ 11:56 AM 3 Comments

The return of the madness?

BBC News: Mortgage lenders relax loan terms

Mortgage lenders have started to relax slightly the requirements they need for granting a home loan, figures indicate. Two-thirds of mortgage deals still require borrowers to put down a deposit of at least 25%. But figures from the financial information service Moneyfacts show a recent rise in the number of deals demanding smaller down-payments. The total number of mortgage deals has risen by 7% in the past month, with more needing only a 15% or 20% deposit.

Posted by flintster1994 @ 11:35 AM 8 Comments

Inflation quietly waiting in the wings?

Independant: China fears bond crisis as it slams quantitative easing

"A policy mistake made by some major central bank may bring inflation risks to the whole world," said the People's Central Bank in its quarterly report. "As more and more economies are adopting unconventional monetary policies, such as quantitative easing (QE), major currencies' devaluation risks may rise," it said. The bank fears a "big consolidation" in the bond markets, clearly anxious that interest yields will surge as western states try to exit their QE experiment.

Posted by flintster1994 @ 11:17 AM 1 Comments

Reinvesting when Terrified

GMO: The Last Hurrah

There is no doubt that the bears are right about the economy but Jeremy Grantham of GMO (who is ultimately bearish) puts some very convincing arguments why missing out on this rally (even now) will mean missing out on a very rare opp to make a lot of . I have been trying to get invested over the past couple of weeks having spent the early part of the rally waiting for a pull back that is begining to look like wishful thinking. As Grantham points out psychologically it is very difficult to get reinvested esp if you are bearish. Equally there is the fear of missing out - bears are ultimately bears because they want to buy at low prices and make huge gains.

Posted by bellwether @ 10:05 AM 76 Comments

Selling risky instruments to unwitting investors around the world.

BusinessWeek: The Perils of Global Banking

Investors are trying to recoup money from Lehman Brothers, whose bankruptcy in September paralyzed the world economy. Tens of thousands of burned investors around the world are complaining loudly that they were sold toxic bonds that were supposed to be safe. In street demonstrations from Hong Kong to Hamburg, protesters are demanding that their governments do something to get their money back. Now there's a growing fear among economists, policymakers, and business groups that in the name of protecting their citizens from global financial institutions, governments could slow the flow of capital between countries.

Posted by devo @ 06:59 AM 2 Comments

Camp America

USA TODAY: Economic casualties pile into tent cities

For the economic homeless, the American ideal that education and hard work lead to a comfortable middle-class life has slipped out of reach. They're packing into motels, parking lots and tent cities, alternately distressed and hopeful, searching for work and praying their fortunes will change. "My parents always taught me to work hard in school, graduate high school, go to college, get a degree and you'll do fine. You'll do better than your parents' generation," Marshall says. "I did all those things. For a while, I did have that good life, but nowadays that's not the reality."

Posted by sold out @ 12:58 AM 4 Comments

An insight into how Americans are thinking right now

CNN: Strategies for keeping your job

If your job really is in danger (and you'd rather have less money than no money) you need to address that fear head-on. Let the boss know you're willing to work, contentedly and productively, at a lower wage than you currently receive. Some possible openers: "I don't consider salary a final measure of my self-worth." Or "My friend Peter stayed on at his job at lower pay to help keep his company afloat. I really admire that." This move isn't without risk. And it won't be fun. It's hard for most of us to admit that we may be worth less to our employer than we once were. But that's exactly why signaling acceptance of a wage cut can prove effective. [Scary stuff! Across the pond this is how people are thinking! How long before British workers develop a similar attitude?]

Posted by drewster @ 12:23 AM 11 Comments

Wednesday, May 6, 2009

The results of the governments tests will be announced tomorrow

FT: Billions required to bolster US banks

Citigroup and Bank of America have emerged as the US banks with the biggest capital shortfalls after the completion of the governments stress tests, with Citis capital needs projected to be more than $50bn and BofA requiring about $34bn in fresh equity. BofAs capital deficit is more pressing because Citi has already agreed to bolster its balance sheet by converting preferred shares owned by the government and other investors and selling non-core businesses

Posted by devo @ 11:09 PM 5 Comments

A few days old now, but only just found it. Is this significant?

Telegragh: Interbank lending rate narrows as trust returns

The benchmark interbank lending rate fell to just one basis point above 1pc yesterday as the markets continue to react to low policy rates and government action to free up credit markets. Three-month dollar Libor the London interbank offered rate dropped by 0.0094 percentage points to 1.01pc yesterday, a sign that banks are increasingly willing to lend to each other.

Posted by wanderinman @ 08:18 PM 16 Comments

Subprime is down; now million-dollar mortgages turn sour too

Bloomberg: Rich Americans Default on Luxury Homes Like Subprime Victims

The number of U.S. "jumbo" mortgages entering the foreclosure process jumped 127% during the first 10 weeks of this year from the same period of 2008. Chuck Dayton bought a $950,000 house near the ocean in Newport Beach, California, in 2004, with a 25% deposit. He was making $500,000 a year with his plasterboard company. He refinanced in February 2007 with a $1 million loan and also took out two private mortgages to help pay business expenses. Now he owes $46,584 in delinquent payments and penalties. The foreclosure process typically takes about a year. That means jumbo-loan defaults will increase over the next year. [Remember, the US housing market is 12-18 months ahead of the UK. Also what effect will this have on banks?]

Posted by drewster @ 05:51 PM 3 Comments

Property Snake Slithers South

Times: House price falls: A region-by-region breakdown

House prices have fallen by an average of 17.7 per cent over the last year, taking prices down to levels not seen for five years, according to the Halifax. The average home now costs 154,716, down from a peak of more than 200,000 in September 2007. However, the national average figures masked widespread regional variations. Here is a list of the percentage decline from the first quarter of 2008 to the first quarter of 2009 for each region in the UK......................P

Posted by jack c @ 02:50 PM 10 Comments

Why you should be worried about the bond market

MoneyWeek: Why you should be worried about the bond market

With stock markets on a tear, investors have been distracted from a potentially dangerous development in the bond markets that could be disastrous for both the economy as a whole and for anyone carrying any debt...

Posted by damien @ 02:45 PM 6 Comments

Shucks, if only we'd had a systemic-risk regulator

Counterpunch: Why economists should learn arithmetic

In Washington policy circles they're calling for a systemic-risk regulator. The implication is that the mess would never have happened if only they'd had one of these. The truth is that in boom times, even if the boom's not sustainable, public servants go along with the flow or they don't get promoted. A systemic-risk regulator (that's what the Fed's supposed to be anyway) would have been told to keep quiet and not to spoil the party. In any case, any numerate economist with a pulse should have seen the HPC (and consequent financial crash) coming. As the writer points out, all the signs were there.

Posted by icarus @ 02:34 PM 2 Comments

Fewer products, high LTVs, uncertain prospects and high taxes

Investors Chronicle: Best forget about buy-to-let

a pretty succinct summary of why buy-to-let is no longer paved with gold, if it ever was.

Posted by jone @ 11:46 AM 0 Comments

Ludicrous Times headline

The Sun: House prices and services boost recovery hopes

Never read such an awfully obvious headline - it took the times 5 paragraphs to get to the truth!!

Posted by growler @ 11:32 AM 6 Comments

Tsunami of inflation to come and destruction of the middle-classes

You tube: `Max Keiser on the economic crisis

Straight-talking from Max Keiser on the economic meltdown and the destruction of the middle-classes

Posted by sold 2 rent 1 @ 10:43 AM 43 Comments

House prices Fell Again During April

Sky News: House prices Fell Again During April

The average value of a home is now 154,716, according to Halifax. The annual rate at which prices are declining has accelerated to 17.7% - up from 17.5% in March. Thy rate is measured by comparing price falls during the past three months with the same period a year earlier.

Posted by chris2003394 @ 10:40 AM 0 Comments

No way out?

Zero Hedge: Fingers and Dikes

Encouraged by Drewster's positive feedback think a few of you will enjoy this article which is one of the best I've read on Fed Intervention and likely consequences. I think the hint is that the problem is way too big even for the FED and that efforts will eventually fail and we will have out global depression whether we like it or notl. Also that the govt sponsored rally in equities is not backed by an improvement in the bond market - where investors are still not buying the green shoots. The drop in Libor, one of the touted green shoots is a function of fed intervention and not reflected in the commercial bond market.

Posted by bellwether @ 10:29 AM 2 Comments

Here we go, Again!

Reuters: Bank of America to need $34 billion in capital

A possible $34 billion capital shortfall is certain to increase pressure on CEO Kenneth Lewis, who was last week ousted by shareholders as chairman of the biggest U.S. bank. Bank of America spokesman Scott Silvestri declined comment.

Posted by alan @ 10:26 AM 1 Comments

Shock fall in prices by 1.7% in April

Lloyds Banking Group (Halifax): Latest House Price Index - April 2009

Higher fall than expected according to news on BBC Radio 5 live? Really ? Not on BBC web site yet. Wondfer why ?

Posted by doomwatch @ 09:42 AM 16 Comments

Green shoots?

BBC News: House price falls 'accelerating'

The fall in UK house prices is accelerating, according to the latest survey from the Halifax

Posted by becky @ 09:40 AM 0 Comments

Halifax April House Price Index

Halifax: -1.7% MoM

Commenting, Martin Ellis, housing economist, said: "The average UK house price declined by 1.7% in April, slightly less than the 1.9% monthly fall in the previous month. The house price to earnings ratio a key measure of housing affordability is at its lowest level since the autumn of 2002 at 4.26. Mortgage rate cuts have reduced monthly payments for the average existing borrower by 111 since October 2008, also boosting affordability. Mortgage approvals remain at historically very low levels. Rising unemployment, low consumer confidence and the reduced availability of credit are all expected to exert downward pressure on the housing market over the next few months. As a result, further house price declines are likely."

Posted by phdinbubbles @ 09:40 AM 22 Comments

And about time too.....

Telegraph: Buy-to-let mortgage schemes down 95pc

''The buy-to-let mortgage market has shrunk by 95pc in the past two years, making life increasingly difficult for amateur landlords. The number of different mortgages available for rental properties has dived from 4,384 in April 2007 to just 213 now, according to financial website''

Posted by hpwatcher @ 08:09 AM 2 Comments

Valuers pricing property more realistically whatever next!

Estate Agent Today: Valuers 'chasing house prices downwards' claim

Apparently valuers are not pricing at the same levels as Estate Agents isn't that just awful! Maybe they have not been listing to the endless ramping. Maybe they understand that in every crash things return to the levels they were pre-crash, that is 3x's loan to income etc.. Maybe they have heard that lending might "dry up" "evaporate" with councils etc removing investments from banks / building socieities due to Moodys downgrades on the basis that "the assumption now is 40% falls". I can't remember anyone saying that valuers were pricing unrealistically when property value trebled in 3 short years from 1.2trillion to 4 trillion, can you ?

Posted by sybil13 @ 07:59 AM 7 Comments

Lenders are making more conservative valuations

Times: Existing borrowers seriously undervalued

[Scroll half-way down for the relevant sub-article.] Many existing homeowners are running into difficulties when they try to remortgage mainly because of the murky world of valuations. Mortgage rates are now so dependent on the amount of equity that borrowers have in their homes that the valuation process has become increasingly important. With some lenders, the rates available to borrowers with 20 per cent equity are as much as 1.3 percentage points higher than those with a 25% deposit a difference of 270 a month on a 250,000 loan. Given the large sums involved, there is an obvious incentive for banks to make conservative valuations. Evidence has emerged that some lenders are doing exactly that. In one case, Halifax knocked almost 40% off the value of a borrowers home.

Posted by drewster @ 02:02 AM 6 Comments

Offers best-buys to borrowers with a 30% deposit

Times: Barclays introduces cheapest tracker

Barclays will introduce the cheapest base-rate tracker on the market, at 1.99% above base, a pay rate of 2.49%. The best-buy deal is only available to cash-rich borrowers with a 40% deposit who need to borrow at least 200,000, and comes with a 1,499 fee. The lender is also reducing the cost of other deals by up to 0.7 percentage points. A two-year fix with 20% deposit is now 4.99% + 999 fee. A two-year fix with 15% deposit is 5.69% [plus unspecified fee]. Barclays said that the rate reductions were due to a fall in swap rates, the wholesale money markets which banks use to fund new fixed-rate mortgage lending. [Question is, how strictly will they value the properties? 85% LTV based on peak valuations, today's lower valuations, or next month's even lower valuations?]

Posted by drewster @ 01:57 AM 1 Comments

Are London's days numbered?

Telegraph: City in danger of falling victim to EU wiles and becoming another Antwerp

The City of London is on borrowed time. Great banking centres can prosper for 40 years or so after the host country has lost industrial leadership but then some shock or political upset exposes the fragility of it all. "There is an extreme stickiness in financial centres," writes Peter Spufford, a Cambridge historian, reviewing the rise and fall of Genoa, Florence, Venice, Bruges, Antwerp, Amsterdam and London over eight centuries. Antwerp's arcaded "Beurs" was Europe's commercial hub in the 1550s. Within half a century Antwerps' population had fallen from 100,000 to 40,000. It was hard to sell a house.

Posted by drewster @ 01:09 AM 4 Comments

Quick, get on the 'ladder'

CityWire: FTBs desperate to buy before prices rise again, Rightmove claims

More than two thirds of potential first time buyers think now is a good time to buy a property before prices start climbing again in a year, a new survey from property website Rightmove has suggested. Miles Shipside, commercial director at Rightmove, said the results were a clear sign that the general mood towards property and home-ownership was swinging towards positive. 'Canny investors have been snapping up some bargains, and now first time buyers reckon prices are reaching a floor too,' he said. 'They are looking to take advantage of cheaper prices before they start to rise.'

Posted by little professor @ 01:00 AM 6 Comments

Tuesday, May 5, 2009

Only in America, or could it happen here? Perhaps to new build city centre flats?

Wall St Journal: No Sale: Bank Wrecks New Houses

A Texas bank is about done demolishing 16 new and partially built houses acquired in Southern California through foreclosure, figuring it was better to knock them down than to try selling them in the depressed housing market.

Posted by xbz @ 11:53 PM 1 Comments

Ben Bernanke talks about real estate and the economy

Calculated Risk: Fact Checking Bernanke on Real Estate

Bernanke testified before Congress today. Summary: The U.S. economy has contracted sharply since last autumn; GDP down 6pc (annualised) in the last two quarters. Loss of 5 million payroll jobs over the past 15 months. Further sizable job losses and increased unemployment in coming months. Credit conditions for consumers remain tight. Conditions in commercial real estate are dire. Vacancy rates for existing office, industrial, and retail properties have been rising while prices of these properties have been falling. House sales volumes peaked in June-July 2005. House prices peaked in July 2006. In California last month, 57.4pc of all sales were foreclosures [repossessions]. Government-imposed foreclosure moratoriums are flattering the figures; underlying stats are even worse (see comments).

Posted by drewster @ 11:27 PM 2 Comments

Work harder for longer or leave the UK

Telegraph: Britons face working until 70 to help bring public debt under control

Britons will have to work until the age of 70, at least five years beyond the current retirement age, if the Government is to stand any hope of bringing public debt under control over the next decade, a report by the National Institute for Economic and Social Research claims.

Posted by enuii @ 10:58 PM 10 Comments

A Software developer's perspective on "The Green Shoots of Recovery"

Abstract Generator Factory: The end of the beginning

So then, back in January, Halifax announced a rise in house prices. This triggered the all-too-inevitable round of "blah, blah, it's over; blah, blah, bedsits in Bradford first to bounce!" horseshit all over again (honestly, some people will never learn). But, as I predicted, that wasn't the turning point. (Not that there won't be a turning point, but we're not there yet; and then, there's more than one type turning point...) The cheerleaders then shut up - well, made slightly less noise - for a bit.

Posted by dixzyt @ 10:11 PM 0 Comments

Routine money management article turns Uber Bear

Moneyweek: How to preserve your wealth in these uncertain times

I linked to this from Damien's article posted at 2:36pm. At first, it seems to be a routine article about advising a friend who requires a low risk savings strategy. Then this: 'So she's thinking of buying another house. "Please don't!" I beg her. If, by some miracle, our economic policy works, and we come out of recession and deflation is avoided, interest rates will have to go up. There is no other way for them to go. That will be bad for house prices. But if as I believe is more likely UK economic policy fails, then there is going to be more unemployment, wages will fall further, business will stagnate and credit will continue to deflate. There will be less money to spend and that will be bad for house prices too." Next, he advises his friend to buy a little gold!

Posted by quiet guy @ 06:40 PM 17 Comments

Perfect time to buy ;-)

Aboutproperty: Scottish house prices fall 57.1%

he average house price for a property in Scotland fell by over six per cent in the first quarter of 2009

Posted by matt_the_hat @ 05:43 PM 4 Comments

More of the same? - quelle surprise! Socialised losses creates enormous moral hazard issues.

Bloomberg: Wall Street Firms Will Revert to Pre-Crisis Model, Cohen Says

Wall Street, after getting billions of taxpayer dollars, will emerge from the financial crisis looking much the same as before markets collapsed, said H. Rodgin Cohen, chairman of law firm Sullivan & Cromwell LLP. The system will look more like what preceded the current environment than many people seem to believe,

Posted by tyrellcorporation @ 04:36 PM 4 Comments

Taxes down, but New Labour keeps on spending

UK Bubble: The fiscal stranglehold is killing New Labour

Government expenditures are up 5.4 percent. Tax revenues in March were down 12 percent. I wonder where we are going with this....

Posted by inflationwatch @ 04:28 PM 0 Comments

Housing market problems "far worse than the 90's"

Mortgagestrategy: Moore Blatch warns of repossession crisis

Repossessions expert, Moore Blatch is warning that the predictions for repossessions orders and distressed sales could be far worse than those in the 1990s. It believes the extent of the problem could be far worse than the 90s as repossessions and distressed sales were already in their thousands prior to the recession kicking in. Furthermore it says in just looking at repossessions the real picture is much reduced as the sale and rent back sector barely existed in the 90s, but already accounts for well over 50,000 distressed sales according to the OFT.

Posted by jack c @ 03:48 PM 1 Comments

Is it time to pile back into the market?

MoneyWeek: Is it time to pile back into the market?

"But what if this really is that start of something bigger? The trouble is that if the world's central banks really have succeeded in somehow short-circuiting the process of shaking out all the bad investments that were made during the boom times, then we're just going to run into the same problems at some point in the near future."

Posted by damien @ 02:36 PM 21 Comments

Scottish House Sales, Prices Fall

BBC News: Fall in property sales and prices

More indication of the "spring bounce" being a little flat. A 39% fall in the volume of sales for the first quarter of 2009, compared to the previous quarter doesn't suggest that the bounce is very high.

Posted by george buchanan @ 01:47 PM 0 Comments

Calculations of the trough

Write about property: More on the cause of UK House Price correction

This article is one of three linked articles based on an original, you can click through to the original article. Interesting because seems to me there are more moves to calculate the likely trough price for housing by (reasonably enough) matching data to previous house prices. Should this idea become more popular in the media, ipso facto becomes true, and the arrival of the bottom comes quicker which is a benefit to the economy. These calculations are based entirely on the corrected price being a function of FTBs salary, suggesting that mortgage payments at the bottom will be 50% of a FTB salary. Interesting but ignores one crucial fact, FTBs in 2009 are already carrying debt from student loans/credit cards/personal loan, which they were -not- in 1993.

Posted by stillthinking @ 12:06 PM 7 Comments

Latest Halifax FTB Affordability Review

FT: Housing at its most affordable level for more than six years

Home affordability for potential first-time buyers (FTBs) has reached its lowest level in more than six years. According to the latest Halifax FTB Affordability Review, the house price to earnings ratio - a key affordability measure - is lower now than it has been for more than six years. Furthermore, the house price to average earnings ratio has declined from a peak of 5.84 in July 2007 to an estimated 4.34 in March this year - a fall of 26 per cent. The proportion of disposable earnings devoted to mortgage payments - another affordability measure that includes the impact of interest rate changes - has also fallen significantly due to the combination of the decline in house prices and the cut in interest rates to record lows.

Posted by jack c @ 10:57 AM 25 Comments

What does this mean for House Prices?

Independent: Brussels doubles EU recession forecasts for 2009

The European Commission has revised economic forecasts sharply downwards and pushed recovery predictions out to the second half of 2010 in the face of the "deepest and most widespread recession in the post-war era". Brussels is now expecting Europe's GDP to contract by 4 per cent this year, twice the 1.8 per cent predicted just three months ago. The slump will also last longer, with a further decline of 0.1 per cent in 2010, compared with earlier forecasts of 0.5 per cent growth!!

Posted by alan @ 10:57 AM 0 Comments

Protect tenants ?

BBC: New scheme 'to protect tenants'

Does anyone believe this has been created to protect tenants or to create more revenue and tax for the private owned BoE, sorry, Government.

Posted by doomwatch @ 09:31 AM 6 Comments

The not so unpredictable collapse

Telegraph: Hedge funds net 190m from Barclays share price rise

Lansdowne, spent three years gambling on the collapse of Northern Rock. We are often told that nobody could have predicted the collapse of the banking sector. Did these people have a crystal ball? The truth is, that it was obvious to almost everyone in the industry. A similar situation is arising today with the gilts market. The same outfit is now saying, "If equities are the buy of a generation at these prices then gilts are the sell of a generation." Will we soon be told that nobody could have predicted this?

Posted by flashman @ 08:26 AM 48 Comments

Monday, May 4, 2009

About time

Times: Licence to let will hit all private landlords

All private landlords would have to be registered before letting residential property under government plans to curb abuses in the growing rental market, The Times has learnt. Anyone letting a residential property would have to pay about 50 to register with a national body. This would include developers, buy-to-let investors and the growing ranks of accidental landlords who cannot sell their homes. Registered landlords would have to comply with certain standards and those who fail to carry out repairs or who intimidate tenants could be struck off. Landlords would be able to appeal, but if they lost it could be years before they are allowed to rent out property again.

Posted by little professor @ 11:28 PM 15 Comments

Housing green shoots set to wither and die

Guardian: It will be twice as bad as we predicted, says Brussels

EU's forecasts have just popped up and are worse than Darlings latest figures and see little chance of economic growth until after 2010 although they do predict that the UK economy will grow by 0.1% in 2010 although this may be optimistic and is little basis upon which to base the CEBR's prediction of 3.1% house price inflation in 2010.

Posted by enuii @ 09:54 PM 1 Comments

What's behind the latest stock market rally?


Interesting article may just shed some light on what the US banks are really doing with the bailout money

Posted by simon @ 09:50 PM 1 Comments

Emma dishes out some common sense to counter todays CEBR article in the Telegraph

Telegraph: Housing market recovery is piffle, says non-expert

Emma dishes out a dose of reality in response to an article in the Telegraph about how things in the housing market are not as bad as previously thought. This really irritates Emma who reminds readers that "every time you see a story in the media over the coming months about how the housing market is on the up, just mouth the words "Well, they would, wouldn't they?"

Posted by enuii @ 08:44 PM 4 Comments

End of the btl boom

ThisWasMoney: Anthea Turner and Grant Bovey go for broke - again

In a way, well done to Grant for having sc@#ed a few thousand BTLetters (and his cleaner)! You've got to admire these entrepreneurs who make billions out of hot air.

Posted by confused76 @ 07:03 PM 35 Comments

Look at the US house price to income multiple, 3X, compare to UK

Bloomberg: U.S. Home Prices May Be Lost for a Generation

One of the reasons the housing mania was so damaging was that median home prices rose to about three times average household incomes as opposed to double income levels in 1950. Wages simply werent keeping pace with housing inflation, so homeowners overleveraged to make up the difference. The wave of deleveraging will depress home prices in most markets.

Posted by xbz @ 03:49 PM 0 Comments

BBC's angle on the CEBR

BBC: Home values 'down 28% from peak'

Calling the bottom of the market was "slightly premature" said the one of the CEBR report's authors, Benjamin Williamson. "Worsening conditions in the labour market and the wider economy seem likely to counter-balance historically low interest rates and slowly improving credit conditions," he added. The downturn in the building of new houses over the past 18 months could lead to "significant" undersupply in the medium term, he added, which may trigger stronger growth in house prices towards 2012 or 2013.

Posted by dohousescrashinthewoods @ 02:56 PM 23 Comments

Hubris, not talent

Observer: The rich cried wolf. Now they deserve to be bitten

"...we can begin to query the facile identification of "top talent" with "top pay". " Article from yesterday's paper, pertinent to some of the recent discussions here on 'talent'.

Posted by letthemfall @ 11:01 AM 21 Comments

Annie, reading your guff is hard on the brain

Times: Trading up is still so very hard to do

Just stop for a minute and try to work out what the heck barking mad Annie is trying to say here: "The base rate is forecast to stay at 0.5 per cent, but there is likely to be more data on the way in which quantitative easing should improve mortgage supply for the many, not just the few."

Posted by doomwatch @ 10:18 AM 4 Comments

US housing market still falling after 4 years

Bloomberg: Buffett says no sign of housing recovery

buffett(who owns a realtor) sees housing market gloom continuing,this is even after 4 years and average salary 3 x average house price In UK we are still ar 6 x average salary(which is falling)...dyor!

Posted by taffee @ 07:47 AM 4 Comments

CEBR talking balls again


HOMEOWNERS were given fresh hope yesterday after economists predicted the end of the house price slump is now in sight. Property values could fall another 8 per cent from todays levels before hitting their lowest point, the Centre for Economics and Business Research predicts. But it said that prices will start rising in six months time and keep doing so into 2011. The centre expects a stronger performance by the end of 2013 by which time the average home will have rebounded to 170,000 from 144,000 at the end of this year.

Posted by little professor @ 01:44 AM 19 Comments

Sack 'em all

The Sunday Times: Labour peer Baroness Uddin claims 100,000 expenses on empty flat

A LABOUR peer who lives in the East End of London has claimed about 100,000 in parliamentary expenses on a flat in Kent that neighbours say has been unoccupied for years. Baroness Uddin, who worked closely with Tony and Cherie Blair, has been claiming allowances intended for peers living outside London although she resides only four miles from the Lords. Inquiries by The Sunday Times have established that the baroness bought a two-bedroom flat in Maidstone in 2005 and has named it as her main home to claim almost 30,000 a year in accommodation expenses from the House of Lords.

Posted by bufferbear @ 01:28 AM 5 Comments

Sunday, May 3, 2009

Yet more desperate ramping from a paper that should know better

Guardian: Thinktank says house prices will start to rise again next year

CEBR previously predicted 35% falls even if approvals doubled, British Bankers Association confirmed mortgage approvals fell in March despite the endless ramping. Search for CEBR 10% on Yahoo link says " EXPECT THE HOUSING MARKET TO CRASH SOON", a document dated March 2009 about the collapse of tax revenue . CEBR predicted 40% falls if approvals didn't double.The article is somewhat garbled saying: "The CEBR is forecasting a fall of 28% in prices from their peak the third quarter of 2007 to the trough, which it thinks will come in the first three months of 2009." Which you must admit is a bit odd as we are now in May! But continues to say they predict a further 8% fall this year, total 36%, that is 300000 property 192000 , but they seem to have left that bit out of this article

Posted by sybil13 @ 11:25 PM 3 Comments

Many happy returns?

Guardian: Desperate houseowners turn to eBay in search of elusive buyers

Houses are such a fantastic investment that people are trying to flog them on eBay

Posted by cyril @ 05:54 PM 3 Comments

Are properties really starting to sell? Err No!

Thisismoney: Are properties really starting to sell?

So have they really been sold or is this an estate agents ruse to drum up interest? Err isn't it obvious?

Posted by lloyd @ 05:51 PM 0 Comments

Of leeches and scavengers

Times: Many happy returns

"The buy-to-let market is making a comeback as the canny investors best bet" ...?!? not quite sure what this means, like the rest of the article

Posted by confused76 @ 09:26 AM 13 Comments

Three times more affordable

Independent: First-time buyers still struggling to afford supposedly 'affordable' properties

"the average property bought by an FTB remains unaffordable for an average earner in all of the local authorities surveyed in London, South West, East of England and Northern Ireland." What the hell does that say about the price of houses, so why do papers continue to day GREEN SHOOTS GREEN SHOOTS? All I can say is THANK GOD FTB's are excluded with property prices due to fall 40% + thank heavens the lenders do not want to take any more loss upon themselves. Would someone be kind enough to explain to the bear of little brain what 3 times more affordable means? If the average property was 200000 in 2007 and it is now 3 times more affordable what does that mean as a % fall?

Posted by sybil13 @ 08:08 AM 6 Comments

Saturday, May 2, 2009

This time last year we were all millionhairs Sunday, Apr 27, 2008 - BTL to the rescue

What a difference a year makes.......? Comeback Greenbay - see 15. "Sorry people but there will not be a crash, not even close". Just what the site was like when we did have the old BTL brigade members telling those who STR how stupid they were.... well stupid is as stupid does!

Posted by techieman @ 11:35 PM 14 Comments

Full steam ahead, Titanic captain!

Guardian: Company failures are 'tip of the iceberg'

Personal insolvencies could top 150,000 this year, suggesting UK economy is not through the worst. Insolvency experts warned today that a 59% annual jump in failing companies was "the tip of the iceberg" as official figures highlighted the impact of Britain's plunge into recession on the hard-pressed corporate sector. Tighter credit, falling demand and a weak property market are pushing an increasing number of individuals and companies over the brink. The purchasing managers' index stands at 42.9 - any reading below 50 indicates that factory output is contracting.

Posted by drewster @ 08:27 PM 2 Comments

A new topic of conversation at the dinner party!

BBC News: Tenants 'in most debt since 80s'

Hundreds of thousands are falling behind with rental payments, largely due to rising unemployment, according to the National Landlords Association. The situation was "pretty dire" with at least a third of members owed money, the association added.

Posted by cheekie charlie @ 12:42 PM 5 Comments

Friday, May 1, 2009

Derivatives = nil sum

FT: Derivatives investors face $1bn bill after Syncora halts payouts

Banks and other investors face a bill of more than $1bn after a large US bond insurer became the first since the credit crisis struck to cease paying out claims, an event expected to trigger payouts on billions of dollars of credit derivatives

Posted by devo @ 11:33 PM 75 Comments

This is pretty bad...

FDIC: FDIC Creates Bridge Bank to Take Over Operations of Silverton Bank, National Association, Atlanta, Georgia

At the time of its closing, Silverton Bank had approximately $4.1 billion in assets and $3.3 billion in deposits, all of which are expected to be within the FDIC's insurance limits. Silverton Bank had approximately 1,400 client banks in 44 states, and operated six regional offices. It provided a variety of services for its clients, including credit card operations, clearing accounts, investments, consulting, purchasing loans, and selling loan participations.

Posted by mark @ 09:29 PM 2 Comments


Matterhorn Asset Management AG: IT AINT OVER 'TIL THE FAT LADY SINGS

What stood out was the charts for US debt growing exponentially & World trade collapsing The detail and figures mentioned in the following headings are worth a read. US individuals one month from bankruptcy. Deflation or Hyperinflation. - (UK noted)

Posted by debtfree @ 09:17 PM 20 Comments

Interest rates to rise to 9% in 12 months?

BBC News: City Diaries: 30 April 2009

These diaries are written by people who work in finance and have had a front row seat as their industry goes through the biggest changes in decades. The most interesting comment for me was the one by 'Anthony' (not his real name) who works for an investment bank in the City. He says: "It is true that retail sales have grown by a miniscule 0.3% but that is just a reflection of the fact that people in work have seen a sharp reduction in their mortgage payments. Those out of work are still spending their redundancy packages.The problem is that interest rates will have to rise to attract investors who have to fund our huge borrowing requirement. It is expected that those in negative equity will see their variable mortgage rates rise to 9% in the next 12 months."

Posted by hotfoot @ 08:15 PM 16 Comments

Seasonal adjustment puts cat among the pigeons

Moneymarketing: UK House Prices: Is the bouncing cat dead or alive?

Last month much was said of the surprise bounce in Nationwide's House Price Index, which saw house prices jump by 0.9 per cent. Then this week the bouncing cat was pronounced dead as the building society revealed an April drop of 0.4 per cent. But is the cat really dead? John Charcol senior technical manager Ray Boulger has long bemoaned "seasonally adjusted" house prices, the norm for the HPIs of both Nationwide and Halifax, as "doctored" statistics that aren't showing us the whole picture. It might be time to check the pulse of little Whiskers.

Posted by jack c @ 06:06 PM 4 Comments

Mortgage broker Ray Boulger has a look at Nationwide's seasonal adjustment

Telegragh: Nationwide House Price Index: Actually, prices went up

Ray Boulger: " The "real" Nationwide House Price Index shows that prices rose by 0.6pc in April, after a rise of 2.2pc in March, and a fall of only 0.8pc in the first four months of 2009. "

Posted by wanderinman @ 05:59 PM 11 Comments

How Britain's borrowing is now hurting

MoneyWeek: How Britain's borrowing is now hurting

Britain is hugely over-borrowed, which means any "green shoots" of recovery are probably an illusion. Its likely to take several years before the country gets back onto a sustainable growth path.

Posted by damien @ 04:40 PM 3 Comments

Few buyers at auction?

Rat and Mouse blog: Big noisy US property auction business goes silent

Could US auction house be selling repos illegally cheap?

Posted by bmortar4 @ 03:01 PM 0 Comments

The OECD report takes account of the deepest and widest recession in 50 years

OECD: OECD Interim Economic Outlook, March 2009 (PDF)

The PDF (linked above) is a fairly weighty tome (150 pages) and not exactly light reading. It analyses the likely impact of recent fiscal stimulus and the whether further fiscal stimulus is required and its likely impact. The report provides projections until close of 2010 including likely unemployement levels and the future direction of inflation etc. If you like to get your teeth into something then it's probably worth preparing some refreshments and having a read.

Posted by denzil @ 01:13 PM 0 Comments

Does anyone know which bank in scotland and england were stupid enough to bail out this casino group

Las vegas sun: The rescue of CityCenter

Eight banks, five different time zones, three languages and, later, $1.8 billion in financing *******I wonder how much of out taxpayers money ended up in this insane scheme in vegas***********

Posted by mark @ 01:08 PM 1 Comments

What is the sustainable growth rate of the UK?

FT: Goldilocks economy was unsustainable boom

Robert Chote, Director Institute for Fiscal Studies. - "Between 1998 and 2008, output in the economy was 3-4 per cent above its sustainable level, he estimated, in what he called an alternative view of history.

Posted by mountain goat @ 12:55 PM 3 Comments

10 Downing Street Petition.

BBC News: Brown quit call is top petition A call for Prime Minister Gordon Brown to resign has become the best supported petition on the Downing Street website. The petition - started by Labour supporting academic Kalvis Jansons - has been backed by more than 38,000 people so far. Petitioners are promised a response from the government if they attract more than 200 signatures.

Posted by jason @ 12:51 PM 6 Comments

Debt Relief Orders make interesting reading

BBC: Bankruptcies reach record levels

The number of people being declared bankrupt in England and Wales has hit a new record, according to the government's Insolvency Service. In the first three months of the year there were a record 19,062 bankruptcies and 10,713 individual voluntary arrangements (IVAs). The number of companies going bust in England and Wales fell back in the first three months of the year. However the figures were still 54% higher than a year ago.

Posted by jack c @ 11:46 AM 1 Comments

A taste of reality.. seasoned or unseasoned

Telegraph: Record numbers go bankrupt

Experts expect the number of personal insolvencies to continue to increase during 2009, to reach a record 150,000 for the year ...."followed by 4.25% record GDP growth", says Alastair speaking from his newly padded cell

Posted by neil @ 11:30 AM 0 Comments

Why US house prices will keep crashing

MoneyWeek: Why US house prices will keep crashing

"US house prices still fell last month. But it was the first time in 16 months that the decline didn't set a new record. If you're thinking that this is a pretty slim basis for optimism, you'd be right. Behind the scenes, the market is still deteriorating. And that's bad news for British house prices, too... "

Posted by damien @ 11:06 AM 1 Comments

House Prices to Fall At Least another 15%

Write About Property: Land Registry: UK house Price Decline Slows, Prolonging the Agony?

It does in fact seem that the rate of house price decline is slowing in England and Wales. According to the Land Registry house prices fell 0.4% in March, when the annual rate of decline slowed from 16.5% to 16.2%. So, the Land Registry says the decline slowed in March, and Nationwide said today (April 30 2009) it has slowed in April. However, I still say that this is not necessarily a good thing, because it may just be prolonging the decline and the agony.

Posted by problem pete @ 10:45 AM 10 Comments

FT covers latest proposal to help prop up the residential housing market

FT: Tax cut needed to prompt pension funds to invest in housing

Plans to encourage pension funds to invest in private rented housing have been widely welcomed. However, the British Property Federation (BPF) has warned that the initiative, which is due to be formally announced later today (1 May), may not be enough without changes to stamp duty charges for large scale investors. The Homes and Communities Agency (HCA) is due to announce later today (1 May) that is it in discussions with private investors, including pension funds, to help build new rental properties. Around eight organisations, thought to include two institutions, two housing associations and one or two big name pension funds, have reportedly been in talks with the HCA over building the new properties.

Posted by jack c @ 10:20 AM 4 Comments

Comedy Club opening act May 2009 - Para-gone

FT: BTL buyers buoyed by strengthening yields

Landlords experienced strengthening yields in the first quarter of 2009, prompting many to look to acquire residential investment property this year.According to Paragon Mortgages' latest Private Rented Sector Trends report, the average yield across landlords' portfolios rose in the first quarter to 6.2 per cent, up from 6.1 per cent in Q4 2008. Overall, yields have been rising steadily since February 2008, when they stood at 5.7 per cent. As a result, one in five landlords said they intended to purchase residential investment property in 2009, while a further 28 per cent are undecided. Four out of five landlords who do plan to purchase property said lower prices in the current market were a key driver behind their decision.

Posted by jack c @ 10:10 AM 4 Comments

Recovery delayed - Savills gutted UK Housing market may not recover until 2012, Savills says.

Savills say the UK housing market may recover a year later than previously predicted in 2012.

Posted by will @ 09:43 AM 4 Comments

Britain's crushing debt burden

MoneyWeek: Britain's crushing debt burden

Alistair Darling tried to magic it away with some fantasy growth projections. But a future Budget will have to get serious about Britain's debt...

Posted by damien @ 09:39 AM 1 Comments

BBC and Treasury Committee point out the obvious.

BBC News: Bankers made 'astonishing mess'

Hmmm, long after many on the forums here knew where fractional reserve lending was going to get us the Treasury Committee makes the same conclusion. The only difference being people on here aren't paid out of my taxes to note the inevitable risk that comes with handling financial products that are not understood or asking for a bonus for the same conclusions. Next on the treasury committee's list "Do bears defecate in the woods?"

Posted by symo @ 08:46 AM 5 Comments

Hopes for housing market recovery dashed

Financial Times: Hopes for housing market recovery dashed

Hopes of a quick turnround in the UK housing market were dashed on Thursday after two new surveys underscored the continued decline in UK house prices. Both Nationwide and Land Registry showing 0.4% decrease in house prices during April. Council of Mortgage Lenders comments: a) new money extended for loans was likely to be around 25bn less than repayments of principal in 2009, b) serious delays in mortgage repayments were likely to rise to more than 4.4 per cent of all home loans up from 1.8 per cent at the end of last year while repossessions would also rise sharply.

Posted by live4ever @ 08:36 AM 1 Comments

Green spots in the housing market?!? Ahahahah

Bloomberg: U.K. Housing Market May Not Recover Until 2012, Savills Says

The U.K. housing market may not recover until 2012, a year later than earlier projected, as unemployment rises and the financial crisis deters buyers, Savills Plc said. In March, Savills sold a house in Fulham with 2,777 square feet (258 square meters) of space for 1.75 million pounds. The property was put on the market late last year at a 2007 price of 2.4 million pounds, Cuthill said. If the same home were to go on the market now, the asking price would have to be 2.15 million pounds to achieve the same sale price, he said.

Posted by attila @ 08:36 AM 0 Comments

That's 200 million per family

Express: 200m mortgage rescue scheme helps just one household

A LABOUR scheme to help vulnerable families avoid losing their home is today exposed as a sham. Only one household has been helped by the 200million Mortgage Rescue Scheme since it was launched in January. The scheme aims to prevent the most vulnerable people from having their home repossessed by enabling them to sell all or part of their property to a registered social landlord. When launched, it was meant to help 6,000 families over two years. At the current rate just eight households would benefit in that time.

Posted by little professor @ 12:54 AM 7 Comments

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