The Serious Fraud Office is to investigate the collapsed investment company Keydata Investment Services after administrators PricewaterhouseCoopers discovered a £107m black hole in its books. KIS, which specialised in "innovative" high-income products, went into administration three weeks ago. The cause of its collapse was initially believed to be a tax bill of £5m, but the administrators are now looking for missing investments worth at least £107m. The Financial Services Authority, the City regulator, says it is "in discussions with the Serious Fraud Office about the potentially missing assets underlying some of these products".

What is the moral and spiritual character of our times? Today, we are shocked by the slave trade's evil economics. However, because we have given financial matters an exaggerated role in our lives, we often forget the enslavement of the human spirit that this has caused. The economics of slavery may have been a thing of the past, but the slavery of economics is very much of the present. Ken Costa is chairman of Lazard International

The NYSE has taken action to make sure that nobody will henceforth be able to keep track of the complete dominance that Goldman Sachs exerts over the New York Stock Exchange. This basically ends our weekly Program Trading updates disclosed every Thursday indicating that Goldman has singlehandedly captured all of NYSE's program trading.

Surprisingly sensible comments from Stephen Hester head of RBS

Staff at the Air Products factory near Wrexham have been told the site is to close, with the loss of 200 jobs.

June 30 (Bloomberg) -- The state of the U.K. economy fills British financial historian Niall Ferguson with foreboding. “The probability of a real sterling crisis is around one in three, and the probability of major tax hikes and cuts in public spending is roughly one in one,” the Harvard University professor says.

Look, we can rant and rave about market manipulation and government-sponsored games. We can petition the SEC, the FBI and Congress. We can demand that they stop it all we want. But they haven't and likely won't until and unless America (forces) them to act. So how do we make that happen, yet remain within the law? Its not that hard, and in the intermediate and longer-term it would be incredibly positive for our economy and nation. We go on a consumption strike until and unless our demands are met. What are our demands? Here's the list...

Imposing new requirements on banks or attempting to reduce them in size would harm the UK's economy, the head of the British Bankers' Association warned today, as she led an attack on proposals to limit the scale of banks. Angela Knight, speaking at the BBA's Annual International Banking Conference in London, also said imposing higher capital requirements on banks would lead to reduced lending to the wider economy, and would ultimately weigh on growth. She said: 'Banks are actually holding more capital than required by Basel II and more additions will have an impact on banks' ability to support the broader economy.'

une 30 (Bloomberg) -- Delinquency rates on the least risky mortgages more than doubled in the first quarter from a year earlier as U.S. efforts to help homeowners failed to keep pace with job losses that pushed more borrowers toward foreclosure.

"But Ian Austin, the housing minister, promised MPs: "The impact of the scheme is accelerating." He said the number of families helped by the measure had risen from two to six during May. "

The state of the U.K. economy fills British financial historian Niall Ferguson with foreboding. “The probability of a real sterling crisis is around one in three, and the probability of major tax hikes and cuts in public spending is roughly one in one,” the Harvard University professor says.

Posted by devo @ 01:20 PM 8 Comments

The British recession was much more severe than first thought in the first three months of the year, with the economy suffering its sharpest quarterly contraction in more than 50 years, official figures show. The Office for National Statistics (ONS) said the economy actually shrank by 2.4% in the first quarter compared last year, much more sharply than its original estimate of 1.9%. Economists had predicted a downward revision but not on that scale - the consensus estimate was a 2.1%. The Ernst & Young ITEM Club described the data as "a real shock which highlights the extreme weakness of the economy in the early months of this year."

Posted by little professor @ 01:12 PM 13 Comments

"Lloyds Banking Group is to cut a further 2,100 jobs ..."

There is a serious lack of transparency in the Irish property market, namely that of information surrounding the prices that houses sell at. All of the market data is primarily based upon 'asking prices' rather than actual prices that property is sold at. This distorts the information available to professionals with which to make any informed opinion, it also means that it is more difficult to interpret the market in a meaningful way.

The Organisation for Economic Co-operation and Development has waded into the pre-election war of words over the public finances, urging the Government to impose swingeing spending cuts.

the GDP data may raise concern that the economy is even weaker than previously feared.

The decline in gross domestic product (GDP) was greater than an earlier estimate from the Office for National Statistics of 1.9pc as the recession deepened, hitting industries from manufacturing to services. The drop on the quarter was the biggest since the year that Michael Jackson was born and Harold Macmillan was prime minister.

Posted by devo @ 10:16 AM 7 Comments

Who cares if EAs are shifting 4 houses rather than 2 a month because people have falsely called the bottom. This is the real news and trust me this is NOT a sustainable growth market. Classic classic classic bull trap. I can't believe what I'm watching.

It's probably a little bit too far into summer to keep calling this the Spring Bounce. On a note of caution, Howard Archer, chief UK and European economist said, "We are still far from convinced that house prices have bottomed out and we certainly do not think that we are at the start of a renewed sharp upward trend. While buyer interest has clearly picked up markedly in recent months, this is only slowly translating into increased house sales".

Posted by denzil @ 09:40 AM 6 Comments

This post analyses the components of long-term stock market returns, and shows that dividends represented more than half the total return over time! In an environment characterized by increasingly shorter investment horizons, the concept of compounding sounds so passé, but it remains one of the most important principles governing investment. The time has perhaps come to look beyond the short-term noise and focus on good old stock picking, and specifically those companies with strong balance sheets that will be growing their dividends over time with a reasonable degree of certainty. The link is: http://www.investmentpostcards.com/2009/06/30/consider-the-components-of-equity-returns/

"The price of credit-default swaps on U.K. sovereign debt has surged as investors try to protect against a deterioration in creditworthiness" "The current crisis has stirred memories of 1976, when sterling collapsed and the U.K. had to borrow from the IMF" Lawson, who expects Cameron to succeed Brown, urges Britain’s next leaders to make deep cuts. “It’s essential they take very tough action straight away,” says Lawson, who slashed spending in the 1980s. “The question is: How tough are they prepared to be? How much initial unpopularity are they prepared to ride through?”

Obviously this only applies to the US, as we don't have any sub-prime or over-stretched lunies here.

House prices rose by 0.9% in June Three month rate of change turns positive for first time since December 2007 Low supply supporting prices for now, but a sustained recovery still faces risks

This whole 'Spring Bounce' is dragging on far longer than I expected ...

Posted by mark wadsworth @ 07:36 AM 53 Comments

"What is unusual about the recent trend reversal, however, is that it has taken place against a background of transactions activity that is still very low by historical standards", he added. Not really a trend reversal then is it.

Posted by phdinbubbles @ 07:27 AM 9 Comments

I was amazed to stumble across this computer generated video, starring All Slop in a tv interview against this site. Worth a watch because obviously hpc is more influential than you previously imagined, so you can influence people and make a profit, he he he.

Posted by stillthinking @ 11:41 PM 8 Comments

Some pretty good stuff on CNBC about the hand of govt moving the market. Buying futures and boiling shorts. Good to hear this sort of stuff from traders etc rather than people who see conspiracy everywhere. As I understand it GS have been instrumental in this. View seems to be that this can continue for sometime but what happens when earnings don't support. Maybe start faking those, change accounting standards as happened with Banks. This has all got to end very badly.

Posted by bellwether @ 11:38 PM 7 Comments

Restoring the flow of bank lending to businesses and consumers must be an urgent priority for the Chancellor in the fight to combat the recession, the Organisation for Economic Cooperation and Development (OECD) told Britain today.

The modern financial system is immensely complex – possibly too complex for any one person to really understand it. Interconnections create systemic risks that are extraordinarily difficult to figure out. The fact that things apparently worked so well (up until the time that they did not) gave everyone a false sense of comfort.

Perhaps should be "Why the government can't borrow ...now because it needs to later". The ongoing write-downs and losses, commercial property will probably ring a bell, will cause additional bank losses. As the state approaches their credit limit, the last credit card in town, they need to keep some back for emergencies. I have a comment on this.

Apparently the communist government of Cuba spends 60% of GDP, whereas the UK government spends 50%.

talk, talk, talk, talk, talk, talk, talk, talk, talk, talk, talk, talk, talk, talk, talk, talk, talk, talk, talk, talk, talk, talk, talk, talk, talk, talk, talk

Labour MPs Ann and Alan Keen claimed £175,000 on a second home near Parliament, equipped with swimming pool and private gym, even though their main residence was only ten miles away. Now squatters have entered their designated main home and are adamant they will not budge. "We've paid for their home with our taxes - so we're going to use it," Bob says. "You can see they aren't using it." The house has not been lived in for several months and looks derelict, despite being designated as the primary residence of the MPs, dubbed "Mr and Mrs Expenses"

Sorry not set out brilliantly here but these figures are scary.... Table 1 Net Public Pension Liability at schemes own discount rates Country % of GDP4 US Dollars (billion) US 15% $2,088 UK 64% $1,267 Canada 12% $151 The shape and structure of the assets and liabilities, and the analysis of their sensitivities, are set out in the main body of this paper. However, in summary, it is clear that the UK stands out as having a major, and distinctive, problem in relation to its public sector pension promises. This has been brought about because a large majority of the UK public workforce have generous, fully index-linked final salary pensions which are completely unfunded, whereas funded (partially or fully) public schemes are the norm in the US and Canada.

Posted by jimandco @ 03:32 PM 10 Comments

Lending to consumers and businesses suffered a setback in May, highlighting the threat to nascent green shoots from weak levels of credit. Net lending secured on dwellings did not grow during the month, the worst performance since records began in 1993, the Bank of England said. The annual rate of lending growth of 1.3 per cent was also the slowest pace on record, and compares with a 11 per cent growth rate before in late 2007. New mortgage approvals rose by 223 to 43,414 in May, the smallest increase since January.

The property market continued to pick up in May, according to figures from the Bank of England. The number of mortgages approved for house buying rose to 43,414, up from the figure of 43,191 the month before.

Posted by flintster1994 @ 02:02 PM 20 Comments

The IMF report indicates that Ireland is facing an unemployment rate of 10% in 2015. I think that will lead to considerable movement of labour from Ireland to the UK.

Hopes of a recovery in Britain's battered housing market were dealt a setback today when new data for May revealed a weaker than expected number of mortgage approvals and the lowest rise in lending on record.

House prices were unchanged again in June as falling supply and rising demand helped to support prices, while other indicators further fuelled hope that the market is recovering, Hometrack’s survey shows. 'A lack of supply and rising demand have combined to prop up house prices in the last 2 months,' said Richard Donnell, director of research at Hometrack. He said the volume of buyers has grown by 36% in the last six months, substantially more than the 6.4% increase in the number of homes for sale.

June 29 (Bloomberg) -- U.K. houses held their value for a second month in June as increased demand and a lack of supply supported residential prices, Hometrack Ltd. said.

A fierce debate now rages among economists, investors, pundits and the puppetmasters of fiscal policy: What’s next, inflation or deflation? Has the most massive money-printing spree in history successfully stimulated the global economy and put it back on an upward course with rising inflation? Or are we still in a global downturn, temporarily masked by the stimulus, with prices, wages and employment still falling? It’s not an either-or question. In fact, we’re seeing inflation (of prices) and deflation (of assets) simultaneously: “indeflation”. [When central banks are setting interest rates, will they consider price inflation or asset deflation?]

Posted by drewster @ 01:10 AM 30 Comments

Money is leaking instead into Shanghai's stock casino, or being used to keep bankrupt builders on life support. It is doing very little to help lift the world economy out of slump. Fitch Ratings has been warning for some time that China's lenders are wading into dangerous waters, but its latest report is even grimmer than bears had suspected.

Posted by chris @ 11:34 PM 7 Comments

That debt has now been passed to bailed-out bank Lloyds Group after its takeover of HBOS earlier this year. The taxpayer owns a 43 per cent share of Lloyds, leaving us liable for more than £20million of Bovey's debt.

Article based on BOE report + money week article "The Bank of England report has another interesting graph showing Nominal House Prices and Real House Prices with the peak of 2007 as the 100% mark. A simple extrapolation of the Real House Prices suggests a correction being approximately 20% lower than the current point (from peak, or 25% from the current level) but as all past crashes have shown, the actual bottoming out occurs well below the target."

Posted by sybil13 @ 02:16 PM 13 Comments

This is the 2nd article I have seen that believes Nationwide and Halifax figures will have returned to negative this month . With July being the busiest month for moving , not buying, I do wonder how much more ramping we are going to have to endure . We seem to have got stuck in a time warp where people read property prices are going to fall 25% + but seem to believe they wont actually ever fall but just sit at 2007 values and start going up from there. Eventually we have to get the 25 - 30% falls that have already occured (most offers are at 25 - 30% and lenders are valubing 25 - 30% below peak), we just need EA's and sellers to catch up, and I think they will by around October when they will realise its 30% down this year or 40% down next.

Gary Shilling interview - May 18th. Deals with a few interesting subjects my fav bit is when he there is a disbelief pause after one of his statements at about 6 mins. If you have never heard of him... about time you did!

Posted by techieman @ 01:28 PM 7 Comments

If you buy a BTL and assign to a social housing recipient in receipt of LHA, the taxation on your wage is offset by receiving the government stipend for housing. For somebody on 30K a month, tax rate of about 1K, but offset by LHA of about £750. By not allowing rents to fall with unemployment, the government are reducing their tax base along a property divide. For all the recent talk of benefits scroungers, we should remember they personally get £240/month, this is not what is running up the outrageous debts of government.

We should have been getting our leg over more often.........apparently. Now there are too many old people and not enough young to pay for our pensions etc. I blame the Mrs. I bet you all thought the bank robbers were our MP's, sorry but they are a completely different set of robbers.

Forty-nine percent of respondents agreed with the statement, “Because of the current economic climate, the American dream of home ownership is no longer a realistic strategy for building wealth.”

"...by kowtowing to the financial elite, policymakers on both sides of the Atlantic helped that elite to wreck the system."

For a decade, the Bank of England ignored house prices and focused only on the CPI. In an uncoming Treasury White Paper, the target won't be changed. Therefore, there are no guarantees that the housing bubble can't happen again. In fact, another bubble looks a certainty.

The Bank of Mum and Dad is alive and well, with estate agents reporting that parents are taking advantage of lower house prices to buy a home for their children. Amid the gloom in the market, there are some great deals for young people wanting to get on the property ladder,' says Charles Smailes, chairman of Propertylive,

I just got off the phone with Lucas van Praag, the top flack at Goldman Sachs, who called Matt Taibbi’s piece on the bank “hysterical”.

Matt Taibbi’s 12-page screed on Goldman Sachs has appeared on newsstands; Zero Hedge has scans, but I can’t link to the piece itself because Rolling Stone hates the internet. Suffice to say that in the second sentence of the piece Taibbi describes Goldman as “a great vampire squid wrapped around the face of humanity”; later on, he calls it “the planet-eating Death Star of political influence”.

Colleges and the building industry have been left high and dry after construction plans which would have injected £450 million into Sussex's struggling economy were axed.

Go down to Chart 2.12, "Number of mortgage products advertised in Moneyfacts", about half way down. Credit-impaired buy-to-let disappeared over a year ago. Credit-impaired residential disappeared two months ago. Even the number of prime residential mortgage products advertised has more than halved since 2007. Does this form a sound basis for the recent widely accepted renaissance in house price growth? I don't think so.

June 27 (Bloomberg) -- London’s most expensive luxury-home prices increased this month for the first time in more than a year as European buyers including Russians took advantage of the pound’s weakness, Knight Frank LLP said. The average price of houses and apartments worth 10 million pounds ($16 million) or more rose 1.9 percent in June from the prior month, the London-based property broker said in a statement today. Prices fell 16 percent from a year earlier. It was the first monthly increase since April 2008.

The Land Registry’s House Price Index for May shows that the volume of properties priced between £250,001 and £300,000 suffered the greatest decline across the country last month, with sales down 60% to 1,527. The volume of properties priced between £50,001 and £100,000 experienced the smallest decline, with volumes down 20% to 6,293.

Posted by devo @ 09:51 AM 13 Comments

"Fresh evidence that house prices have begun to stabilise came as official figures showed a modest 0.2 per cent decline in May, bringing the average price to £152,497" The question really is, is this upward momentum that will push the indices into positive territory? If so, what will rising unemployment do to the self-feeding "green shoots" propaganda message? (if we believe propaganda it's probably because we want to)

Posted by dohousescrashinthewoods @ 12:14 AM 7 Comments

Call me cynical if you like, but I never imagined it would take too long before not just the general public but even the Labour Party itself came to regret the cowardice of Labour MPs in failing to depose Gordon Brown from his leadership. Should one have required further evidence of the foolishness of leaving this serial failure in charge of our nation's affairs, the response to the strictures by the Governor of the Bank of England this week about the size and danger of our debt should have done it.

''Prime Minister Gordon Brown wants to set up a £60bn annual fund to help poor countries deal with climate change.''

Posted by hpwatcher @ 08:27 PM 7 Comments

Desperate for custom, lenders are offering everything from 100 per cent mortgages to free cars

The report revealed that the funding gap – the shortfall between what banks have in deposits and what they lend out to customers – has further widened in the past year to more than £800bn. The increase underlines the scale of adjustment that they will have to undergo before life returns to relative normality. The report also pointed out that the amount banks have in liquid assets remains low, while the leverage ratios remain high, saying: "As long as these balance sheet vulnerabilities persist, there is a risk to the banking system from further adverse economic or financial sector developments, which could in turn affect lending and economic recovery."

Pay deals have fallen to a record low following a "collapse" in wage rises in private firms, new research has shown. In contrast to the picture in private companies, awards in the public sector remained "buoyant", with pay rises averaging 2.5% in the year to May.

I think long term Spanish people do well from this. They have access to an abundant supply of cheap property, when they get back on their feet they can buy whatever they like instead of feeding an insatiable mortgage. No mention of the fact that when Spain entered monetary union, the final euro value of the peseta looks in retrospect way way too high, a real gift to the German economy.

Surprise surprise, housing boss says hosue prices are now good value!

I didn't notice but apparently in the budget the incentive for benefit claimants to rent at a price below the LHA (and get up to £15/week) has been removed. Darling suggests that this will save 145 million. Well, apart from ripping off the people who took worse housing than necessary by not actually paying up the difference, going forward, this makes shopping around for a cheap rent pointless, and fixes fairly firmly the bottom of rents to whatever the arbitary price the LHA lists.

Prices fell 0.2% month on month in May, according to the latest Land Registry report, taking the annual rate of decline to 15.9%. Wonder if all the bulls who were citing LR figures as being the most accurate last year will stick to their story?

Posted by little professor @ 11:16 AM 6 Comments

"The numbers peppered through the Bank of England's latest Financial Stability Report are staggering. Global credit crunch losses stood at £15trillion at the end of March, or half of world gross domestic product. Rising unemployment, which already exceeds 2.2million in Britain, will trigger further loan defaults and deplete banks' capital..... For example, the report says mortgage arrears in Britain could be set to double as the recession bites".

Scott Adams' take on the housing market. I won't spoil it by summarising it.

Posted by nubbers @ 08:32 AM 7 Comments

The housing market slump is close to ending, with prices set to bottom out later this year and begin rising again by 2011, the City is predicting. A growing majority of economists are calling the end of the housing crash that has so far wiped about a fifth off home values. The poll of economists by Reuters found a consensus that house prices will drop by 8 per cent this year, flatten out next year and start rising again from 2011. As recently as March, economists were predicting an average 14 per cent fall in house prices this year

Posted by little professor @ 11:45 PM 35 Comments

"Mr Brown told the meeting, at Labour’s London headquarters, that “within months” the party would be shown to be working to tackle the recession, to deal with the expenses issue and to once again, after recent troubles, be “a disciplined united and campaigning party”.

Posted by alan @ 10:23 PM 6 Comments

"The problem in the UK housing market is affordability – or the lack of it. We are nowhere near the levels where the market can start to resuscitate. The Nationwide Building Society's first-time buyer affordability index, which measures initial home loan payments as a percentage of take-home pay, is still five years away from a market trough if the last housing downturn is anything to go by."

Posted by damien @ 05:13 PM 21 Comments

House prices in Ireland are continuing their month on month decline. No sign of recovery there and they are a year ahead of the UK (but the recession is somewhat worse). "House prices in Dublin fell by 2.2 per cent last month, compared to a decline of 1.1 per cent in April. Outside of the capital, prices fell by 0.4 per cent in May as against a 1.7 per cent fall a month earlier. Over the year, house prices fell by 14.8 per cent in Dublin and 10.5 per cent outside the capital. In the first five months of 2009 alone prices in Dublin declined 7.7 per cent and by 4.7 per cent elsewhere."

But my estate agent says that house prices are on the up and the recession is over. And the good people at teh ONS, and ..., but.....Alastair and Gordon said and.....besides, who needs industry, a house is all you need lad, yep you don't need no ffffing job!

A few more jobs lost but that's ok because house prices go up forever. You just need a house not a job, remember!

Many a mill stone mortgage keeps people in London jobs they hate and mothers away from their new-born. "What is holding us back from starting a commune or becoming a teacher? The mortgage." Only big business and HMRC benefit; funny that.

Irish house prices will have declined by around 40 per cent from their peak in February by the end of next year, according to ratings agency Standard and Poor’s. Its report on the European housing market said the Irish economy was suffering from a "very deep recession".

From the crowded bars of Canary Wharf to the corporate hospitality village at Wimbledon, memories are fading fast. Less than a year after the collapse of Lehman Brothers brought the banking system to its knees, London's financial community is shaking itself down and getting back to the business of making money. "We are like goldfish," says Jon Macintosh, a Mayfair hedge-fund manager. "We swim once around our bowl and when we complete the circle everything looks new." In the offices of Goldman Sachs staff have been briefed to expect one of its most profitable years ever.

Posted by devo @ 08:54 AM 25 Comments

"The PAC also hit out at the Treasury acceptance of the Rock's business plan after nationalisation. This was "over-optimistic" about the future of house prices, even compared to forecasts available at the time, as it suggested that there would be a 5% fall in house prices in 2008. "

So Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors was probably right in March 2009 when he said: "Most of the house price indices suggest prices have fallen by up to 20pc from the peak. However, many of our members [surveyors and estate agents] cast doubt on this and calculate independently that the scale of price falls has been even greater − 30pc or more already. They suspect the Nationwide and Halifax figures are underestimating scale of the peak-to-trough fall to date. Looking at the surveys you have to come to the conclusion that we aren't at the bottom by any stretch yet. Our members are still expecting further falls in prices, according to our survey, and if there's anyone you might expect to be talking up the market it is them"

Nothing new here repossesions are UP, arrears escalating at an alarming rate, negative equity timebomb and mortgage lending down 58%. Doesn't sound like the right ingredients to get thos property prices rising.

These poor dears trying to sell their ex-council property in a pretty part of Dorset only to discover a covenant restricting it's sale to people with a link to Dorset. But hang on, didn't the covenant exist when they themselves bought the property? And if so, didn't they benefit from it? They seem to think it may take them 40 years to sell. YES IT WILL UNLESS YOU PRICE IT FAIRLY!

"We ought to have learnt the hard way that home ownership is not a one-way bet. Your home is now worth around a quarter less than in the summer of 2007; as a result, negative equity is fast approaching the heights seen in the early 1990s. The recovery is probably something of a mirage: prices are likely to fall further in the coming months. A sickly housing market has some years left to run. Housing bubbles are bad news – yes, even when prices rise. An overheated property market prompts people to buy homes that are bigger than they really need. In future, the BoE needs the ability to control the loan-to-value levels at which banks lend to customers. Also we must reshape the tax system so that it does not favour home ownership. This may mean a land value tax...."

Lenders are now charging an average of 5.04pc to home owners who want to fix their repayments for two years, up from 4.92pc on Monday and 4.74pc at the beginning of last week. Banks are saying they don't want to be overly competitive and they are being forced to put up their rates, and this is having a spiral effect. If it carries on like this, within a couple of weeks we could see an average rate of 6pc.

Posted by drewster @ 02:08 AM 10 Comments

Some startling or not so startling figures regarding negative equity and the rmbs market finishing by saying: " As the FT points out this morning, all these people stuck in their homes are creating a ‘glut of hidden property’, which in turn is likely to depress house prices further. Even a short term rise in prices, Fitch argues, is likely to make things worse in the longer term, by encouraging trapped sellers to put their homes in the market, which in turn will push prices down again. It sounds like a vicious circle with no way out, for the immediate future at least."

UK investors and professional services groups say they are concerned that buoyant equity markets will allow the City of London to wriggle away from the consequences of the global financial crisis without making fundamental changes. Critics of the City argue that the good times are already starting to roll again on the back of the bumper fees big banks are making from rights issues. They point to bidding wars erupting in the race to secure the services of top bankers, analysts and corporate brokers. Plans by Citigroup, UBS and Merrill Lynch to raise base salaries are also cited.

Bank of England governor Mervyn King has put himself on a collision course with Alistair Darling over the chancellor's plans to nurse the government's finances back to health when recession is over.

Bank of England boss Mervyn King today said he was "more uncertain now than ever" about the UK economy despite tentative signs of a recovery. The Bank's Governor told MPs on the Treasury Select Committee he had 'genuine concerns' over the path

The recession will end this year, but Britain’s economy will endure a bout of stagnation, failing to grow at all in 2010 as the recovery proves weak and “sluggish”, the West’s leading official think-tank predicts today. In a stark challenge to Alistair Darling’s optimistic forecast for Britain to rebound sharply in 2010 with growth of at least 1 per cent, the Organisation for Economic Cooperation and Development projects zero growth for the UK next year — although this is an upgrade to its previous warning of a continued contraction, by 0.2 per cent

ALMOST a quarter of UK homeowners could soon be in negative equity, a report has warned. One in 10 borrowers already has a home worth less than their mortgage. And analysts Fitch Ratings say the number could soon rise to 23 per cent if house prices keep falling.

The governor of the Bank of England, Mervyn King, has called for the government to show "greater ambition" in reducing public borrowing. Plans set out in the Budget to cut deficits were not "clear enough", Mr King told MPs. He said he was "more uncertain now than ever" on the prospect of the UK making a quick recovery from recession.

House prices will stabilise in the last quarter of this year as the low number of homes for sale more than compensates for the fact that houses still aren't affordable, forecasts Standard & Poor's. 'UK house prices will stabilize in the final quarter of this year about 7% lower than in December 2008, and remain roughly stable in 2010,' said Jean-Michel Six, Standard & Poor's chief economist for Europe.This is much sooner than for the rest of Europe, where Standard & Poor's expects house prices to fall both this year and in 2010. The Spanish housing market is poised for worse, with prices declining until 2012, Six said.

Posted by jack c @ 05:28 PM 16 Comments

UK PLC continues to transform to a world bum despite what the men of the large tie knots say.

More deals are falling apart in a housing market that needs transactions to recover from a three-year slump that has dragged the U.S. into a recession. Low appraisals join a list of suspected obstacles standing in the way of a rebound that includes rising interest rates, a glut of foreclosed properties, and the highest unemployment rate since 1983.

Here is a list of Gordon's worst financial blunders, the screw-ups which have cost us all dearly and left economists, accountants and the rest of us scratching our heads in disbelief. 1) Taxing dividend payments to pension funds, 2) Selling our gold, 3) Tripartite financial regulation, 4) Abolition of the 10p tax rate, 5) Failing to spot the housing bubble, 6) Public-sector borrowing (sorry investment how could I have forgotten!) ..... and so it goes on.

Posted by who stole my pension? @ 02:32 PM 24 Comments

Betting against the banks is back in fashion. A key market measure of the health of the biggest global financial institutions has deteriorated this month, after showing sharp improvement in April and May. The price of betting that big banks will default on their debt -- made via derivatives known as credit default swaps -- has risen 17% in June, according to data from New York-based Credit Derivatives Research.

Great figures were released today showing that the days were longer in May than they were in April, continuing a trend that they have shown this year. The data are the latest to show a steady rise in interest from the sun, following similar rises in temperature month on month. The British Intitutue of Solar Energy Developers (BIASED) said that cold grey weather was permanently cancelled and we should all buy solar panels immediately.

Posted by ontheotherhand @ 12:38 PM 8 Comments

Carmaker Ford is to raise its prices in the UK by an average of 4%, blaming the weakness of the pound against the euro. It is the third time this year that Ford has raised prices. They rose 4.7% in February and 3.75% in April.

Posted by flintster1994 @ 11:35 AM 12 Comments

A substantial article about the banking crisis, probably the sort that attracts 0 comments. Well worth reading.

Posted by letthemfall @ 09:59 AM 39 Comments

This article is a couple of weeks old but I thought it worth a post as it lists key policies for the 3 main parties

Janis Andrew was born in the front bedroom of her parents’ semi-detached house in Bridport Road, Dorchester, in 1939. Jack and Sybil Child had bought Elmslake in 1935, first-timers among a generation of new home owners in a recession as deep as the one we are suffering now. “It was hard work making ends meet but we never went without,” says Janis.

Posted by flintster1994 @ 08:38 AM 8 Comments

Thousands of Britons, who had been tempted into living the sunshine lifestyle in Spain, have packed their bags and headed home, driven by the double-whammy of a strong euro and a weak local economy. Jobs have dried up, house prices have crashed and Eldorado is turning to dust. Unemployment is at 17%, and the weakness of sterling means those earning money in the UK have seen their income drop. "It's quiet, quiet," laments Marion. "We don't see the cars. The bars and restaurants are empty at night. Many are going out of business." Rebecca has returned to London after two years in Spain. "People talk about living the dream but all it seems to be is sunshine, cheap cigs and wine. This area had low wages anyway and we're fed up living hand to mouth."

Posted by little professor @ 01:45 AM 12 Comments

Ministers will announce a crackdown on Britain’s biggest banks next week, putting pressure on them to reorganise or face a blitz of more onerous capital and liquidity rules. In a move that could push up their cost of capital or force them to accept worse terms from their trading counterparties, large banks will be encouraged to restructure themselves so that taxpayers do not foot the bill if their higher-risk investment banking divisions fail.

I knew it sounded to good to be true, it's getting caught from this autumn onwards!

Fascinating final paragraph suggesting BTL investors are actually contributing to the good of society and not just lining their own pockets: “Rented accommodation is of immense value to the community, offering flexibility and choice. Currently, individual private investors are being prevented from investing in the sector by lenders’ imposing unfavourable mortgage terms. This research shows that there is appetite to invest in the sector, but it’s now a question of whether mortgage lenders will match the demand.”

Posted by james in london @ 08:35 PM 14 Comments

Banks across Europe are privately briefing key staff that they can expect this year’s bonuses to match or exceed the level they received in 2007, according to managers.

The banks’ net mortgage lending of £2.3bn was the weakest monthly rise since early 2001, although mortgage approvals continue to increase. Personal deposit inflows continue to be weak and consumer credit growth is minimal. Lending to financial companies rose marginally while lending to non-financial companies was little changed overall.

It seems that memories are failing already. Or they're just hoping to get away with it

Posted by letthemfall @ 02:42 PM 24 Comments

Why don't estate agents have the sense to advertise "REDUCED" prices in their windows? Is it for the same reason that they deny house prices are falling "in their area because it's special"? That is, because they are not very bright?

Posted by paul @ 01:45 PM 31 Comments

Interactive map showing which areas are most at risk of negative equity.

As always, if the letting agent refuses to credit check a landlord, the letting agent is effectively indemnifying the tenant against default. The UK badly needs a credit check for landlords to stop this kind of thing happening here.

Fitch report out today.

"The Nationwide index showed house prices rose in May for the second time in three months, adding to optimism [sic} that the sharp decline of the past 18 months could be starting to level off. Analysts expect prices to have fallen back slightly in June but the annual rate of decline is likely to have moderated".

Posted by crashpad4me @ 12:59 AM 9 Comments

More than a thousand pubs and village shops could close during the coming year due to the ongoing shortage of affordable homes in rural areas, it was warned today.

Posted by alan @ 10:35 PM 20 Comments

Las Vegas No. 1 in the nation with $9.7 billion worth of properties in distress

Mortgage borrowers could have as much as £25,000 of their loans written off if they agree to move to a new lender.

The rate at which rents are falling has accelerated as the letting market continues to suffer from an oversupply of properties, research has showed. A record 55% more chartered surveyors in Great Britain reported falling rents rather than rising ones during the three months to the end of April, the Royal Institution of Chartered Surveyors said. The figure was the highest level since the survey began in 1999.

Energy bills will soar to more than £5,000 a year within the next decade, experts have warned. Prices are expected to rise by a startling 42% each year, forcing thousands of families into fuel poverty. Analysts at price comparison website uSwitch.com said average annual bills have doubled from £580 five years ago to £1,243 today. By 2020 they are expected to quadruple as Britain tries to replace outdated infrastructure and bring in green energy policies. Dependence on Eastern European gas also leaves us open to fluctuating energy markets. Experts believe that once the worldwide recession is over, demand for power will soar in India and China, forcing global prices even higher.

Posted by penbat1 @ 12:17 PM 32 Comments

Doesn't Iran sell oil in Euro's - didn't the US & UK go to war with a certain S.Hussain for the same reason?

Posted by matt_the_hat @ 12:00 PM 12 Comments

Mr Hester was parachuted into the role last Autumn after the former chief executive Sir Fred Goodwin was ousted - was the parachute golden by any chance??

While changing its prediction, the CML said it was still too early to suggest that a "robust recovery" in the housing market had started.

This article was written on Saturday based on limited information about the Rightmove asking price index, but they got enough to hit the money as far as it goes.

Governments that have borrowed heavily to fight the economic crisis should not accumulate any more debt, the president of the European Central Bank has said.

"The hesitation in asking prices after four consecutive monthly rises appears to highlight that, while new stock remains in short supply, new sellers are having to vary their prices to match local buyer demand," the property website said.

Border guards in Chiasso see plenty of smugglers and plenty of false-bottomed suitcases, but no one in the town, which straddles the Italian-Swiss frontier, had ever seen anything like this. Trussed up in front of the police in the train station were two Japanese men, and beside them a suitcase with a booty unlike any other. Concealed at the bottom of the bag were some rather incredible sheets of paper. The documents were apparently dollar-denominated US government bonds with a face value of a staggering $134bn (£81bn).

Posted by flintster1994 @ 09:15 AM 14 Comments

It was a time when the media was ­obsessed with duck ponds, moats and flipped houses, so the announcement on 21 May that the credit rating agency Standard & Poor's had put the UK on negative watch received less attention than it might have done. It certainly does not seem to have penetrated the brain of the prime minister, who wants to fight the next election on the basis of Labour investment against indiscriminate Conservative spending cuts.

"Tom Stockham was offered £7,550 to move to another lender" after GMAC sold on the debt to US lender Oakwood. Similar case studies show all is not well in the market, with more lenders resorting to desparate tactics.

Miles Shipside, commercial director of Rightmove, said: "It's a mistake to confuse the upturn in enquiries and sales with a return to a more normal market". Funny how the tune changes so quickly.

Was leaked on Friday by Firstrung, but here's the official confirmation. Asking prices fall slightly, after four consecutive months of rises. The average asking price on Rightmove is now £226,436 - Shipside says this figure is distorted by the low availability of mortgages- the main activity is in the high end of the market where the super-rich people don't require mortgages.

Surprise surprise we read it every day but with mortgage lending levels severely restricted due to the closure of the RMBS market leaving lenders reliant on dwindling deposits then as the CML said: "Activity remains at extremely low levels on any historic comparison – and weaker than at any point in the early 1990s. Limited lending capacity and the impact of further job losses are likely to act as a ceiling for how far the improvement can continue." Eventually I suppose we will ALL get it, that the market HAS to adjust back to pre 2001 levels before the opening of the RMBS market fueling the bubble of all bubbles.

This column has long-argued the Western world's policy reaction to "sub-prime" has been wrong. In my view, the grotesque fiscal bail-outs and the money printing, the ongoing assumption financial regulation could be tweaked rather than reformed wholesale, have made our collective predicament much worse.

Most financial experts are aware that the only reason the economy has not yet collapsed entirely, is due to the trillions in governmental safeguards and industrial subsidies. Curiously, the LIBOR debate is moving to a more econometrically-focused audience and has led none other than the San Francisco Federal Reserve to come out and indicate that LIBOR is essentially flawed as a metric, as it now reflects not so much the risk in the system, but the guarantees by the US government itself.

If you think the public sector is bloated and there is too much regulation and red tape you may well be right. But be careful what you wish for. Here's a tragic tale from Mexico of political cronyism, privatisation, profiteering and an appalling lack of safety standards, all leading to nearly 50 infants being burned to death. In this context there's a reference to the indictment of Dick Cheney for illegally profiting, by virtue of his office, from investments in groups running private prisons, for exerting pressure regarding payment for this service and his involvement in a private prison in which some inmates were allowed to brutalise (and in one case kill) others.

Ben Bernanke is getting ready to pull another rabbit out of his hat and he's hoping no one figures out what he's up to. Here's the scoop; the Fed chief needs to "borrow up to $3.25 trillion in the fiscal year ending Sept. 30" (Bloomberg) without triggering a run on the dollar. But, how? If the stock market keeps surging, investors will turn their backs on low-yielding US Treasuries and move into riskier securities hoping for better returns. The only way to attract more buyers to US debt is by raising interest rates which will kill the "green shoots" of recovery and make it harder for people to buy homes and cars. It's a conundrum.

'Vince Cable, the Liberal Democrat treasury spokesman, said: "The investment banks more than any other institutions created the culture of excessive leverage, excessive risk and excessive bonuses that led to the downfall of the financial system. Now they are cashing in and the same bonus culture has returned. The result must be that we are being pushed to the edge of another crash." '

Posted by letthemfall @ 12:42 PM 6 Comments

"The market is beginning to shift in favour of sellers, according to research by Hamptons International"

Brown is thinking of going 'to avoid humiliating defeat'. Not because he is responsible for the mess we are in then 'No more boom and bust'. Not because of any guilt, or simple act of decency!

It's the economy stupid!

Today's danger is creditor revulsion as governments worldwide raise $6 trillion in debt this year. The solution is remarkably simple. Stop borrowing and step up the Friedman monetary blitz to stop loan collapse. Does any nation have the nerve to do it?

Posted by devo @ 12:11 AM 9 Comments

Business sections are often the first part of the newspaper that goes in the recycling bin. There’s a good reason for this—most people find that the articles might as well be written in Klingon. What follows is for everyone who wants the world of high finance and the current shockwaves in the markets explained in rather more down-to-earth language.

I know the owner of this site, a local EA friend of my partner. Thinks we're on the verge of another massive bull run... "We look at the top five reasons why Kingston Upon Thames continues to attract homebuyers, and why this means prices will be supported."

"The most startling omission from the RM report and commentary is the lack of explanation for the disparity between the average asking price of £226K and the recorded average selling price of circa £160K. This suggests, with some certainty, that delusional vendors are still asking for prices 40% above the true market valuation. Until this bizarre artificial gap 'crunches' the housing market will continue to stagante and deteriorate"

Posted by sybil13 @ 04:05 PM 6 Comments

Why the man behind the largest fiscal deficit in history is cornered.

Nice overview of the U.S. housing market, from a Canadian perspective. Lots that's relevant to the UK.

Doomsday is off. The end is not nigh, after all. Not in the housebuilding market, anyway. A surprisingly chipper Pete Redfern, chief executive of Taylor Wimpey, one of Britain’s biggest housebuilders, is calling the bottom for prices. In a remarkably sanguine trading statement yesterday, the company said that selling prices had been stable for the past six months and it expects them to start rising in the autumn after the traditional summer housebuying lull.

Twenty-one-year-old Sean Smith from Stoke On Trent owes creditors and debt agencies more than £75,000. He's applying for bankruptcy. He said: "It all started when I was 16. I took out a loan on a motorbike for £12,000, then lost my job and couldn't afford to pay back the money I borrowed. Over the years I've also taken out loans on cars and used credit cards, mobile phone contracts and store cards. This has all added to the serious financial state I'm in. A big influence and one of the reasons why I'm in so much debt is down to magazines. I'd see things in them I'd want and buy them knowing I couldn't afford to pay for it."

What can I say...

Posted by matt_the_hat @ 11:28 AM 13 Comments

"So, with unemployment up at 2.26m, house prices likely to keep falling (hence creating a reverse wealth effect) and earnings growth pathetic, it is hard to see how we progress from here."

Billionaire investor Simon Halabi’s real estate companies defaulted on £1.15bn of bonds backed by nine London office buildings as the recession cut the value of the properties by about 50 percent. The properties, including JPMorgan Chase & Co.’s offices at 125 London Wall and 60 Victoria Embankment, are now worth less than the value of the loans that back them. Fitch Ratings Ltd. downgraded the bonds on June 5, citing the prospect that JPMorgan would move from the buildings. Fitch also said the notes were unlikely to be repaid when they expire in October.

And now that also US treasuries have burst wait for the last bubble to pop. Fear ignorance and VIs. "The tripling of the gold price since 2004 has predictably led to something of a stampede for the metal among private investors. But in their hurry to gain a slice of the precious metal, they do not always take the most sensible route, says Adrian Ash, of BullionVault, the gold bullion exchange"

Posted by confused76 @ 08:23 AM 13 Comments

Nothing new here just confirmation again that sustainable recovery is going to have to mean house price falls as the funding just isn't there for anything like a return to the madness of 2007. "The report on lending trends published by the Bank of England on Thursday made that abundantly clear. Just to remind you, it warned there has been almost no increase in the number of mortgages available at higher loans-to-value, and that the cost of home loans is increasing. No wonder that the Council of Mortgage Lenders' figures show that mortgage lending actually fell back in May compared to the previous month. That reflects lower remortgaging activity, but also the fact that what increases we have seen in mortgage approvals for home purchases recently have been exceptionally modest....."

Gold may decline as investors leave a “cave of fear” and buy other assets such as property. Twelve of 22 traders, investors and analysts surveyed, or 55 percent, said bullion would drop next week, the second consecutive negative call. Eight people forecast higher prices and two were neutral. Gold futures for delivery in August were down 0.8 percent for the week, at $933.10 an ounce, as of midday in New York yesterday. (Time to sell Gold, buy Property, anyone?).

Posted by alan @ 10:27 PM 10 Comments

A very strange analysis from Anne Ashworth. Basically, if you borrowed more than you can afford then blame the bank! I'd love to see that logic applied to a business loan. Quote: "The banks, especially those that are state-owned, must persist in their current stance of showing forebearance towards borrowers who are struggling with their repayments. After all, it is the past actions of the banks that have helped to bring these borrowers to the brink." There is a kind of twisted logic in there - failed banks should support failed property speculators.

June 19 (Bloomberg) -- Fannie Mae and Freddie Mac may get permission to begin refinancing mortgages with loan-to-value ratios above 105 percent as the Obama administration seeks to boost participation in its anti-foreclosure programs.

The past week has seen a big jump in the cost of fixed-rate mortgages to new borrowers, according to Moneyfacts. The trend started a week ago with the Nationwide building Society. Since then it has been followed by 13 other lenders, including the Britannia, Cheltenham & Gloucester, Abbey, Woolwich and the Yorkshire building society. David Hollingworth at mortgage brokers London & Country said "best-buy" deals had typically gone up in cost by about 0.5%.

The signal from a large building company that the housing market may finally have reached its nadir boosted construction shares this morning and Taylor Wimpey stock rose by more than 7 per cent. However "If the current market stability is sustained into the autumn selling season we will look to increase the number of outlet openings during the second half of the year. While we remain cautious on land buying, opportunities are starting to emerge to purchase good-quality land at prices that should be value creating," it said.

The OFT has today launched an online version of its public register listing estate agents who have been given warnings or been banned from estate agency work. The register, which can be browsed alphabetically or by date, provides a crucial tool allowing consumers to search whether the OFT has taken action against estate agents. It also provides information that can be used in order to report to the OFT suspected breaches by an estate agent of an existing warning or prohibition order.

Origins and theories of greed Beggining of land privatisation Relationship between land reform and monetary reform Earned Vs Exploited Income Are the problems we face structurally determined and in our Economic DNA

Indeed, prices in the battered housing market could get a lot worse before they get better as an avalanche of specialized adjustable rate mortgages, known as option ARMs and Alt-A mortgages, are slated to reset over the next 18 to 24 months, and rising unemployment causes a surge in the number of prime mortgages going into default. All of this is expected to trigger another round of foreclosures and cause home prices to tumble at least another 20%

Central German government have introduced rules such that the 16 states of Germany will have cleared deficits by 2020, and from that point will not be allowed to run deficits at all. This is a country that the UK needs to increase consumption, and they are belt-tightening. I just can't see the global rebalancing being anything other than a red herring, so we don't consider what debt slaves we have become.

One of the key reasons for the decline in the UK economy is the correction currently going on in the housing and commercial property markets. Britain, like a number of other countries, borrowed hundreds, if not trillions, of dollars and euros to bid up the prices of assets that already existed. However in the main, the foreign exchange borrowing was done at an institutional level. This was not always the case in eastern and central Europe. For instance, in March 2007 Linda Pasztor bought a flat in Budapest (FT, 21 March 2007). She needed a mortgage for the equivalent of $71,500. Did she borrow Hungarian forint at 5.5%? No – she went to the Austrian Erste Bank and borrowed 87,000 Swiss francs at 4%.

Property prices are expected to rise by an average of 1.4 per cent over the next year, according to the latest Building Societies Association (BSA) property tracker survey. The survey found that cautious optimism has returned to the housing market, as respondents predicted a 6.1 per cent fall in prices in the March survey and forecast a 7.1 per cent fall in June 2008.The latest study also found that an increased proportion of people also now believe that it is a good time to buy. Fifty-nine per cent of people agree or tend to agree that now is a good time to buy, compared to 54 per cent in March and just 27 per cent in June 2008.

Posted by jack c @ 11:43 AM 6 Comments

The savings rate is rocketing in the deficit states of the US, UK, Spain, et al, as the "sinners" belatedly tighten their belts, but their fall in consumption is not being matched by an offsetting rise among the surplus "saints" states, China, Japan, Germany-Netherlands, which all points to an implosion in world demand. Yes, the West is printing money. But that is a harder to trick to pull off than Friedman and Bernanke ever realized. And core Europe is not really printing anyway beyond its chump-change dallying in the covered bond market

Posted by bellwether @ 09:44 AM 21 Comments

think ive heard of people doing this for commercial prop, but not residential.

"Whilst wider economic conditions remain weak and rising unemployment could still have an effect on our markets, the severe downside scenarios for which we have been planning now appear less likely," it added. Don't speak too soon!

"Censored copies of Gordon Brown’s expenses, published on the parliamentary website, graphically illustrate the way MPs have been able to hide questionable practices such as “flipping” beneath a sea of black ink. Mr Brown’s expenses for the 2006-07 financial year show that he flipped the designation of his second home from London to Scotland on Sept 17, 2006, just 10 days after Tony Blair announced he was going to stand down as Prime Minister". (he was obviously sooo concerned about his country, constituents etc., etc.)

Homeowners are 25% better off this year than they were in 2008 due to record low interest rates slashing mortgage costs, according to new research. The average homeowner with a mortgage now has £1,075 a month left to spend after meeting all of their fixed monthly outgoings - up from £859 in 2008. The increase has been driven by an 8% fall in household costs during the past 12 months as reductions to the Bank of England base rate cut monthly mortgage repayments for people on a variable deal, according to Ernst & Young.

Posted by mark wadsworth @ 07:49 AM 14 Comments

The mortgages in question are $230 billion of option adjustable-rate mortgages, creative lending products that flourished at the height of the housing boom. In an option ARM, a borrower can opt to pay less than his or her monthly balance due, and the difference is tacked onto the outstanding loan balance.

"If we mess this up, the unintended consequences for not only our economic recovery but the overall long-term financial stability for the world is really at stake," said Sen. Mark Warner, a Democrat from Virginia.

Nearly 900 workers at the Lindsey oil refinery have been sacked, following unofficial strike action at the plant, the UNITE union has told the BBC. About 1,200 contract workers walked out last week in a dispute over 51 redundancies. They claim an agreement not to cut any jobs had been broken.

There are so many surplus houses in the US that it's economically viable to pay someone to knock them down to save the city money on running services. How many "new build" developments in the UK will need to be knocked down?

Mortgage lending fell back in May, according to the latest figures from the Council of Mortgage Lenders (CML). Gross lending totalled £10.3bn, which was 2% lower than in April and 58% lower than in May 2008. The CML said that while lending for home buyers had been rising recently, lending to people changing their mortgage provider had dropped off.

This story published in the Belfast Telegraph is also featured in Citywire. Who writes this stuff? Interestingly the Telegraph article forgot to cut and paste the bit about 'Many economists, though, still expect house prices to fall as wages and employment levels fall back.

To all those people thinking that there are green shoots on the house market , please think on. These are the reasons I believe that this country is going to see the mother of all storms...

Four house hunters were chasing every property for sale during May as potential buyers are feeling increasingly optimistic about house prices this time next year. But total mortgage lending fell again. A survey by the National Associations of Estate Agents showed that estate agents had an average of 299 house hunters registered with them during May, the highest level since September 2007 when the market downturn began. They sold an average of 10.4 homes each, the highest level since October 2007 and the fifth consecutive monthly rise.

Posted by jack c @ 12:43 PM 30 Comments

"Tax revenues continued to be decimated across the board by contracting economic activity" etc,etc,etc.

Posted by tim miller @ 11:42 AM 16 Comments

Gloucester Property Prices Falling Faster than National Average Gloucester property prices fell around 2.5% between February and April according to the Land Registry house price index. In February the average Gloucester house price was £166,924 and in April it was £162,426. If you look at the current average house price according to Zoopla.co.uk, it is £157,364, making the 3 monthly fall closer to 7%. This is in contrast to other recent indices which have recorded 3 monthly falls slowing to around 1%.

here u go , fresh off the press....must have a job lined up

UK public sector borrowing was the highest on record in May, the Office for National Statistics said. Public sector net borrowing was £19.9bn in May, and has already reached £30bn in the first two months of the financial year. This is double the level of one year ago, and even higher than the £19bn borrowed in March. The total outstanding government debt has risen to £774.8bn, £150bn more than one year ago, equal to 54.7% of UK GDP.

This must have been some sort of joke: [Darling] said he was “fully aware” of the need to keep tax rates “competitive” after increasing the top rate of tax for high earners to 50 percent. LOL. Yeah real competitive, with Dubai 0%, Hong Kong 15%, even USA 35%

Public Sector borrowing defecit the largest ever. (Even larger than when Labour were last 'in power').

It seems as if the spring rally has probably exhausted itself. And it is about time given the extent and rapidity of the move. This post provides a quick assessment of the technical and fundamental outlook for stock markets. The link is: http://www.investmentpostcards.com/2009/06/18/stock-markets-retreat-in-store/?preview=true&preview_id=7184&preview_nonce=66d8cab567

"Mortgage lending fell back in May, according to the latest figures from the Council of Mortgage Lenders (CML). Gross lending totalled £10.3bn, which was 2% lower than in April and 58% lower than in May 2008" OK, so mortgage lending is low, unemployment is rising rapidly, retail sales for May are down and there's a new record for public borrowing. Clearly a good time to buy a house before prices take off again.

Just broadening horizons! House price movements will ultimately be determined by the bigger factors at work and its interesting to see the China story being described as a sick joke by Albert Edwards

Posted by bellwether @ 09:23 AM 7 Comments

There were four househunters chasing every property for sale during May as potential buyers continued to flood back to the market, research has suggested

Posted by happy mondays @ 08:46 AM 11 Comments

A senior French official has confirmed Gordon Brown is almost powerless to stop the creation of a European regulatory machinery at today's EU summit, opening the way for a transfer of control over the City from London to Brussels.

Some brilliant comments at the bottom of the article "Looks like another attempt by MP's to keep property prices high so not to damage their own property portfolio wealth. The biggest thing affecting first time buyers is still the prices rather than credit. Mike, London,"

Posted by wdbeast @ 09:30 PM 12 Comments

''The FTSE 100 index stood at 4,445 on May 1st 1997 and after 12 and a bit years, at the beginning of this week, it had moved fractionally down to 4,351. During this same time, inflation, as measured by the Consumer Price Index (CPI) has reduced the value of money by 23pc. ''

Interest rate slasher and arch enemy of HPC.co.uk, Danny Blanchflower, sees no green shoots. He sees a toxic cocktail: sliding house prices, rising negative equity, inadequate levels of credit; soaring unemployment and zero, or even negative, wage growth. He's becoming useful for the HPC cause.

Breaking News Property prices to rise: BSA Property prices have been predicted to rise by an average of 1.4% over the next year, according to the latest Property Tracker survey from the Building Societies Association (BSA).

Harvey Jones thinks now is the right time to get on the property ladder. But what do you think? Who would be a first-time buyer right now? Given the uncertainty over house prices, I wouldn't. But my friends Rachael and Chris are in that fretful position, hunting for a flat in south London, and they are going through agonies. Is the house price crash over? Will prices fall further? Will interest rates shoot up? Can we get a mortgage at all? What if we lose our jobs? Are we doing the right thing? No, no, no you dumb morons, save your money and wait, this crash has hardly started.

Posted by gone-to-colombia @ 05:06 PM 7 Comments

According to the Washington Post, one part of the soon-to-be-announced financial regulatory reform will be a requirement that lenders keep some “skin in the game”: Lenders would be required to retain at least 5 percent of the risk of losses on each package of loan pieces, known as an asset-backed security.

So the house is for sale though Jackson-Stops & Staff (01932 821160) at £2.15 million and they are hoping to rent in South Kensington before they buy. “That is where bankers have moved out in droves so there are good bargains to be had,” she says. “We will rent initially so that we can respond quickly to a distress sale.” What lovely people, but they are going to get zapped too. Its too early. This also is going to smash the outlying areas as they discover they are just no hope towns with no industry and nothing to support the local economy.

The mother of all economic crises seems mysteriously to have vanished in the face of a determined counter-offensive by the forces of optimism. There are daily accounts of returning confidence in financial and property markets and bodies like the National Institute of Economic and Social Research are forecasting an early return to growth. Perhaps those government ministers who spotted the "green shoots of recovery" in the frozen winter earth were not so deluded after all?

The Bank Of England is sceptical about the so-called "recovery" in the economy it emerged today as minutes of its June meeting showed it was united on a decision to keep rates on hold. Minutes from the Bank's meeting two weeks ago revealed the nine-member monetary policy committee unaminously voted to keep rates at their historic low of 0.5 per cent.

A lone voice in the throng of others keen on imagining it will all get better and save us. By next year we'll have rising inflation and unemployment and very little growth - and not many people argue about this.

UK unemployment rose to 2.261 million in the three months to April, the highest since November 1996, the Office for National Statistics said.

Posted by peter_2008 @ 10:58 AM 17 Comments

Bit late with this one CHI. About 9 years. Clearly the only way to solve the housing problem [that Thatcher created] in the UK, is to build more social housing NOW.

Posted by doomwatch @ 10:30 AM 7 Comments

The Royal Bank of Scotland plans to reduce its lending to property companies as the economy has not yet started to recover and it wants to cut risk. But lenders will stick to their clients, offering long-term support. "We will behave responsibly and play long term. Thanks to the government's support we have the time to help our clients recover, instead of doing fire sales or acting in a destructive way."

Germany Weimer Republic 1922-1923 Hungary 1945-1946 Chile 1971-1981 Argentina 1975-1992 Peru 1988-1991 Angola 1991 - 1999 Yugoslavia 1992-1995 Belarus 1994-2002 Zimbabwe 2000-2009

TG-Gold-Super-Markt aims to introduce the machines at 500 locations including train stations and airports in Germany. The company, based near Stuttgart, hopes to tap into the increasing interest in buying gold following disillusionment in other investments due to the economic downturn.

Posted by flintster1994 @ 08:28 AM 22 Comments

"The administration's proposal would give the government the power to take over and wind down a large financial company, a power that government officials lacked last year when the financial crisis was intensifying." So much for light touch (!?) ...

I think this going to be a case of little guy says yes, computer says no to regulation, im afraid...

Has it come to this!

The Times is asking everyone to vote in their poll to say whether or not they think house prices will go up, down, or stay the same over the next year.

Posted by jonb @ 09:41 PM 15 Comments

The second-in-command at Land Securities, Britain's biggest property company, abruptly left today following the group's recent £4.8 billion loss and concerns the company had lost its way. Quote: "Land Securities is too big." Hmm, sounds like kind of business GB would be keen to bail out using voodoo money!

The times reports that Barclays customers are unable to access their accounts today, through the ATM network, online banking or in the branches. According to the article, this is due to a "computer hardware failure".

Posted by jonb @ 04:10 PM 18 Comments

Adam Posen, a widely cited expert on monetary policy who is deputy director of the Peterson Institute for International Economics in Washington, has been chosen to replace Tim Besley, whose term is expiring on the Bank of England’s Monetary Policy Committee.

Posted by flintster1994 @ 02:58 PM 13 Comments

une 16 (Bloomberg) -- 36 South Investment Managers Ltd., whose Black Swan Fund gained 234 percent in 2008, is raising money for a new hedge fund, betting that government efforts to pump money into economies could result in hyperinflation.

Sarah Beeny reminded us that if interest rates go up, even hanging on to devalued homes may not be an option. Maybe this time we'll listen. Her closing remarks seem to suggest that the market's only going to be further depressed once interest rates go up again, and next week's programme features Beeny musing on how turning houses into flats is a market that's pretty much dead.

Posted by warwick @ 01:26 PM 6 Comments

Is the tide now flowing in favour of Home Information Packs? A good example of when they have helped, but is this kind of occurence a small minority?

US homebuilder confidence slipped in June as rising mortgage rates cast concerns about the state of the fragile housing market. The National Association of Homebuilders’ index of homebuilder sentiment fell back to from 16 to 15 this month, dashing economists’ predictions of an uptick. The figure remains 79 per cent below the peak of hopefulness reached in June 2005 when the index rose to 72 but well above January’s record low of 8. A reading of more than 50 indicates “good” conditions.

A particularly interesting quote from a Joseph Harwood of a Gloucester buy to let outfit, who says that the gap closing between asking prices and selling prices is insignificant. Only the realistic vendors are selling he says.

The “less-bad-than-expected” school of thought is largely based on survey data such as the Purchasing Managers Indices (PMIs). It therefore makes for interesting reading to revisit the historical relationship between the PMI and stock market movements. Click here for the (somewhat bearish) research results: http://www.investmentpostcards.com/2009/06/16/stock-markets-%E2%80%93-running-away-from-reality/

Excellent article showing that foreigners aren't "investing in a thriving, diverse, technology-driven US economy" - they're being forced to pay for US consumption and for a US military that encircles their countries. They're mad as hell and they're doing something about it. If/when dollar hegemony goes, what does this mean for the world's financial system and the privileged position of western banks and their IMF, World Bank etc. surrogates?

Posted by icarus @ 10:45 AM 9 Comments

"Russian President Dmitry Medvedev said on Tuesday existing reserve currencies, including the dollar, have not performed their function, and a new supranational currency was in the making".

"British Airways boss Willie Walsh is asking his 40,000 staff to work for nothing to save the airline. The company has written directly to its 40,000 employees asking them to volunteer for up to four weeks of unpaid work".

Posted by alan @ 10:34 AM 14 Comments

Proving that there never was any real case for cutting interest rates to an unprecedented 0.5% or deploying Zimbabwean 'economic' measures. Has anyone noticed how all of the inflation measurements have now switched back to CPI? Because RPI rose perhaps?

UK inflation surprised economists as it fell less than expected in May to 2.2pc, raising fears over the Bank of England's moves to pump more money into the economy. There can't be much more quantitative easing to come if we keep getting outturns like this."

If you don't buy tat and only buy stuff that's kind of important, like food and fuel, inflation is most certainly not falling.

Posted by flintster1994 @ 10:20 AM 9 Comments

An interesting article proposing that BTL investors deserve sympathy and a bail out too....

I can't access this as I have no sound on PC but thought it may be of interest.

does Negative equity matter. despite lots of scaremongering stats, the answer is probably not very much in the grand scheme of things.

As many as 350,000 public sector jobs could be lost over the next five years, the Chartered Institute of Personnel and Development (CIPD) is warning.

Posted by hpwatcher @ 06:08 AM 17 Comments

'Transactions had fallen off a cliff but now it looks as if we have returned to normal recessionary conditions, says Yolande Barnes, director of residential research. The market is being driven by cash buyers and those with high levels of existing equity. This means that there are more transactions than the mortgage market would suggest.' Yeah, d'uh! 'It also means, bizarrely, that the mainstream market is behaving like the multi-million-pound prime market at the moment.'

"In a ghastly day for Europe's lenders, Moody's downgraded 25 Spanish banks as rising defaults eat into reserves."

Lord Kinnock and his wife, Glenys, have amassed six public sector pensions worth a total of £185,000 per year, according to an analysis by a think tank.

Gordie Brown’s act aimed at those who haven’t kept up

The UK budget shortfall in the year through March 2010 will reach 12.4 percent of gross domestic product, the most among the Group of 20 nations. “I’ve never seen a level of government debt quite like this, not even in the worst days of the 1970s,” said Stephen Lewis, chief economist at Monument Securities in London. “Costs of borrowing will have to rise. The Debt Management Office will need all the help it can get to take these bonds to the market successfully. It’s a stiff task.”

Since peaking in the summer of 2007, housing prices have fallen 21%. For an asset that some thought would never fall in value, that's a huge drop. Yet housing remains 85% higher than it was in January 2001. A decade's worth of inflation and the government's efforts to provide a housing floor should help, but remember that just as we overshot fair value on the way up, there's the possibility that we could overshoot on the way down. Average national home prices still have room to drop.

Posted by sybil13 @ 03:20 PM 12 Comments

Whilst looking for related subject matter I stumbled upon a wikipedia link to this site that I certainly wasn't aware of. It's content is a bit sparse but some of the linked references and comments make an amusing read for those with some time to spare

Posted by denzil @ 02:28 PM 8 Comments

The recession will be shorter and less severe than previously expected, according to the CBI, which now predicts that 200,000 fewer jobs will be lost. Britain’s leading business organisation has revised its forecasts for the economy, showing output growing from January next year and unemployment peaking at 3.03 million. SO THAT'S NICE THEN!

Three huge developments in Salford have all ground to a halt - victims of the recession. Canopus Towers - a planned pair of skyscrapers hailed as 'the most sought after address' - is now fenced off and barren after developers BS Construction went into administration. And plans for a £600m urban village off Middlewood Road and an 'urban beach' scheme on the River Irwell have both stalled... Planning officer Tim Hartley admitted they were unlikely to find someone to take on the towers. He said: "It seems a 46-storey development is too big to be attractive to a developer." Mmmmm. Again, the credit binge has gone. No one can afford to buy a flat next to a polluted river on the edge of Manchester anymore. More over, who is buying / renting the ones they have built?

A £20 million London property has been seized in what is understood to be Britain's largest house repossession.

Posted by flintster1994 @ 12:24 PM 14 Comments

Brigid O’Leary, RICS senior economist said: ‘The improvement in sentiment that has been captured in recent housing market surveys is reflected in a narrowing in the gap between asking and selling prices.

Posted by iain oneil @ 10:59 AM 14 Comments

Mostly because the government with the Bank of England are concentrating their futile efforts on trying to reflate the punctured housing market.

Ian McCafferty, the business lobby group's chief economic adviser, said the Bank's Monetary Policy Committee will continue its programme of quantitative easing for some months before "nudging up" interest rates from its historic low of 0.5pc.

Posted by flintster1994 @ 08:36 AM 15 Comments

There is a moment in Nineteen Eighty-Four when Winston Smith realises that “in the end the Party would announce that two and two made five, and you would have to believe it...the logic of their position demanded it”. The Labour Party reached that moment last Wednesday when Gordon Brown told it that his plans to cut real spending on public services and halve capital spending equalled more “Labour investment”.

Britain's economic downturn began when its house price and household debt bubbles inevitably burst, beginning with the run on Northern Rock in September 2007. These bubbles had swollen to higher levels than in the U.S. and other major economies. British house prices rose 88.5% above their long-term trend between 1997 and 2007, whereas in the US the figure was 64.5%. British household indebtedness reached 177% of household income while the US it was 105%. Gordon Brown tolerated and even encouraged the formation of these bubbles for several reasons. Eager to achieve the illusion of steady progress in the overall economy, Mr. Brown needed the rapid expansion of financial services and the real estate business to replace the shrinking manufacturing base.

Posted by little professor @ 11:28 PM 17 Comments

Lloyds drops American customers in UK ahead of costly proposals to stamp out tax evasion those affected can be broken down into four categories and besides American nationals include customers where there is "any indication" that they spent more time in the US than "normal holidays currently or in the past or future.

Latvia is firing a third of its teachers. The welfare state is being dismantled. Pensions for those in work will be cut 70pc. The salaries of doctors, nurses, and police (nota bene) will be cut 20pc. Unemployment has risen from 6pc to 17pc in a year, and is still rising. Jobless benefits for most will run out in the autumn, reducing support to £40 a month. "It is time to take to the streets," said union leader Valdis Keris.

Posted by devo @ 10:58 PM 14 Comments

"The liquidity crunch is increasingly threatening the survival of companies, as well as finance for new orders," said Hans Heinrich Driftmann, president of the German Chamber of Commerce and Industry (DIHK). "This is becoming a danger to possible recovery." Mr Driftmann said Germany's €2,500 (£2,100) bonus for trading in old cars had given an artificial boost for a few months but was now returning like a "boomerang" to haunt the auto-industry. "It was a flash in the pan, not a real rebound," he said.

Near the end of the article: "There are campaigners who argue that Britain should deal once and for all with its damaging boom-bust cycle in house prices by reaching for a radical policy known as annual land value tax (LVT), which would be levied on the value of land up to its maximum permitted development value. The tax would be levied on property owners at, say, 1%, of the land's value every year, with the proceeds used to replace council tax and reduce income tax, thus rewarding work rather than property speculation. LVT would also encourage, for example, an elderly person living in a large family house to move to a flat and free the house for a family in a country where space is limited. It would also discourage developers from sitting on empty sites and buildings."

Claims that MPs owe millions of pounds in unpaid tax are to be investigated by inspectors . . . 'HMRC is doing a thorough audit of all MPs, looking at the capital gains tax situation and whether all sorts of claims that have been made should have been taxed,' said one source. Another said: 'This exercise is regarded as an electoral timebomb that could go off at the worst time.

Signs of stability characterized trading on financial markets during the past week. As investors placed their bets on a global economic recovery, equities, base metals and crude oil made further headway, with long-term government bond yields remaining at elevated levels. The US dollar retreated on concerns of the huge issuance of government bonds, whereas commodity-linked and other high-yield currencies improved strongly. Read more about this and the implications for financial markets in the weekly “Words from the Wise” review: http://www.investmentpostcards.com/2009/06/14/words-from-the-investment-wise-for-the-week-that-was-june-8-%E2%80%93-14-2009/

The comedy couple recently bought another property at the peak of the market, but are now finding it difficult to sell their old pad. Still, they bought it 20 years ago, so a nice little earner in any case.

The UK is in the best shape out of all the economies in Europe, according to a leading economist. Paul Krugman, who won the 2008 Nobel prize for economics, said that the UK's economic policies had been "pretty good" and called them "intelligent".

Posted by flintster1994 @ 02:09 PM 18 Comments

Aslant to the main topic but a relief from the insubstantial property articles that fill the papers now. All about the attitudes and types who got us into this mess.

Posted by letthemfall @ 11:50 AM 12 Comments

In north-west England, which includes Manchester and Liverpool, rents are down an average of 15.7% over the past year to a typical £580 per month - although canny tenants often secure further reductions. In Yorkshire rents are down 7.9% in the past year to £558. In the West Midlands 6.2% and in the East Midlands 3.4%. "The exception is the north-east where rents are down just 0.8%. This area includes Newcastle" - hard to believe with all the empty developments there.

We, the G8 Finance Ministers, remain focused on addressing the ongoing global economic and financial crisis. We have taken forceful and coordinated action to stabilize the financial sector and provide stimulus to restore economic growth and there are signs of stabilization in our economies, including a recovery of stock markets, a decline in interest rate spreads, improved business and consumer confidence, but the situation remains uncertain and significant risks remain to economic and financial stability.

"Tim and Ursula Tavender are among them. Two years ago, they were married and bought a house together. But now they are planning on moving in with Tim's parents and letting out their home in West End, Southampton. They remortgaged it in order to carry out renovations - but when the market slumped, were left with almost no equity and major debt." 'nough said!

A good article following the difficulties suffered by irregular workers and the young in Japan. If you don't make it onto the corporate ladder (which requires University and perhaps 30 interviews) then you can easily end up as an irregular worker on low wages or even living in a Japanese equivalent of Hoovervile. Of course being Japanese there isn't a massive breakdown of social order and at least they have the technology to perhaps innovate their way out of the trough. I wonder how the UK will deal with its coming lost decade?

Young people are increasingly falling out of love with the idea of owning their own home, new research shows, as prices remain too high for most to afford. A study of 2,000 people by the Chartered Institute for Housing, to be released tomorrow, shows that only a third of 18-to-24-year-olds now think owning a home is right for them.

Posted by quiet guy @ 08:09 AM 15 Comments

"The latest survey from the Royal Institution of Chartered Surveyors (Rics) reveals increased activity, with prices starting to stabilise — and the capital is showing the way. On an unadjusted basis, a balance of only 5% of surveyors in London saw prices down last month, against 89% in December. Looking forward, more of them in the capital expect prices to rise than fall in the next three months. "

"Well, well, well...the first bit of 'bad' housing market news (for a while) hit the newswires this morning. True to form (as I type) only 13 news organisations, 14 including ourselves, have bothered to cover this study. The BOE have stated that up to eleven percent of mortgage holders, or just over 1.1million mortgagees may be under-water, or as we call it in the UK in negative equity... " I found the overall tone of this article is surprisingly bearish and bitter.

"Dozens of US cities may have entire neighbourhoods bulldozed as part of drastic "shrink to survive" proposals being considered by the Obama administration to tackle economic decline. The government looking at expanding a pioneering scheme in Flint, one of the poorest US cities, which involves razing entire districts and returning the land to nature. Local politicians believe the city must contract by as much as 40 per cent, concentrating the dwindling population and local services into a more viable area". (any suggestions for locations in the UK?)

Posted by alan @ 11:47 AM 52 Comments

The VI groups who have crawled out of their holes of late are going to have to put their heads together to polish this turd thats steaming towards them, as the banks decide its time to unwind their bad assets and get what they can in the race to the bottom.

Posted by mr cobblepot @ 08:31 AM 6 Comments

Over the past few days, the City has echoed to the sound of frantic scribbling as economists have scrambled to update their forecasts on everything from growth to gold. On the whole, the updates have been upbeat. The recent run of more encouraging statistics continued this week with news of an increase in industrial production in April, more optimistic signs from the housing market and slightly less gloomy noises from employers on job cuts.

Posted by flintster1994 @ 08:31 AM 13 Comments

"First-time buyers who want to get on the housing ladder have seen the number of mortgages available to those without a large deposit slump by 97% over the last two and a half years, according to new research released today."

A short article that discusses the reluctance of property owners to accept price drops. I was interested in this bit: "Notable is how at least some the over-70 crowd wasn't caught up in the speculation and the bust. Those who are too old to be Baby Boomers weren't taken in by the profligacy of that generation."

''Buyers are beginning to lose the upper hand in house sales as fresh evidence suggests that in some regions of the country sellers are successfully holding out for close to the asking price. Nearly two thirds of estate agents across the country said the difference between asking prices and selling prices narrowed sharply over the past three months''

Posted by hpwatcher @ 10:58 PM 14 Comments

5 People have been questioned in connection with what could be the biggest property fraud the country has ever seen. Detectives investigating the dealings of North East Property Buyers and Newcastle Home Loans, yesterday arrested three women and two men, from addresses in Newcastle and Washington.It is alleged that the two Gateshead-based property firms, which offer people suffering from financial difficulties the chance to stay in their own homes by buying the properties and then renting them back to their former owners, defaulted on mortgages secured on the properties. And many of the tenants living in some of the 2,000 homes in the companies’ portfolio have already been evicted after mortgage lenders repossessed homes in an attempt to claw back the money they are allegedly owed.

Everyone knows the money has run out. We need politicians to spend less of our cash and to spend it more wisely

Is it still allowed to describe itself as a 'building society' or even as 'mutually-owned'?

A fresh wave of increases to mortgage interest rates by Britain's biggest mortgage lenders is set to hit hundreds of thousands of homeowners and buy-to-let landlords.

Posted by sold out @ 02:47 PM 7 Comments

Allsop’s two-day residential auction, held in a back-to-back marathon sale last week, reflected the continued rally in house prices. The auction house’s sale rate remained stable at 86% – down one percentage point from its February sale – while the total raised increased by 11% to £46.1m. Murphy said: ‘There seems to be a growing consensus that house prices are no longer falling – many believe that they are increasing. This is being reflected in the room. A lot of potential buyers went away disappointed because prices were moving significantly above the reserves. There was definitely a mood of recovery in the room.’

Posted by little professor @ 01:17 PM 15 Comments

June 11 (Bloomberg) -- Fixed U.S. mortgage rates rose to the highest since November, signaling that the Federal Reserve’s plan to lower borrowing cost is stalling.

A banker, Alan Clarke of BNP Paribas, citing a NIESR report, confidently tells the Guardian that the recession is over. Should we take the word of any banker – especially one that claims to be an economist – seriously? Given that the economics profession was blind-sided by the "debtonation" (August 9 2007), I am deeply sceptical. Second, given that this is a banker-induced recession, that reckless and often fraudulent behaviour by bankers led to a loss of $60tn of yours and my wealth (in the form of pensions, equities, lost interest on savings, and lost income from job losses) last year, should we believe a banker's particular spin on the crisis? I say firmly, no, for a number of reasons, outlined below. But the most important reason for pessimism, in my view, is the hegemonic role...

Posted by 51ck-6-51x @ 12:09 PM 8 Comments

The truth about just exactly how affordable UK house are, or are not as the case apparently is. Average house price 4.37 times average salary according to Halifax our survey says Uh Er, 6.22 according to this article. Based on solid facts, which means prices could yet fall a further 35% though the author doesn't believe they will.

The Chancellor today sought to damp down hopes of an early end to the recession, arguing that high oil prices could hold back recovery.

I enjoyed reading Paul's post from 2003 by Ann Pettifor - what memories you all have - and found her current blog. Interestingly she sides with the public spenders, chastising the fiscal conservatives who will halt any tentative recovery with spending cuts. I'd like to hear more about how government spending "pays for itself". She particularly fears rising IR that will also stifle recovery.

The property market has lurched forward at last only to find that there is a flood of new properties coming on the market. No HPI while this continues.

The British housing-market slump has mired as many as one in 10 homeowners in negative equity, where their mortgages exceed the value of their properties, the Bank of England said. An estimate based on banks’ loan book data shows 11 percent of borrowers were affected at the end of the first quarter, the U.K. central bank said in its quarterly bulletin published in London today. That implies 1.1 million households now face negative equity.

Posted by 51ck-6-51x @ 09:17 AM 12 Comments

Britain cannot veto the massive shift in regulatory power to Brussels now under way. Internal market laws are decided by qualified majority voting (QMV), and London has few friends in this fight. What Gordon Brown can do at next week's EU summit it to play the Luxembourg card by invoking "vital national interest", if he is willing to risk a showdown with fellow leaders. This has no legal status. It is the political equivalent of a stamping bull, or a viper's rattle. It means back off, or we strike. "This is an extremely serious crisis," said David Heathcote-Amory, former Europe Minister and now a key Tory MP on the European Scrutiny Committee.

Nothing new, compares property to gold, considers that todays low interest rates have only one way to go and throws in a sprinkling of loan to income ratios and concludes, as anyone who is not in denial concludes, that a property that is already down 21% is still 25% overvalued. Assume once again this is why Moody's said, "the assumption now is 40% falls" but stress tested for 60% just as the FSA stress tested for 50%. Eventually the REALITY will filter through to mainstream thought and we can all get back on with trying to pay for the mess the UK got in trying to support an inflated property market.

Homebuyers are facing their first rise in mortgage rates for a year in a move by banks and building societies that could extinguish the nascent recovery in the housing market. Nationwide was one of several leading mortgage lenders that today hiked the cost of its most popular deals, with others likely to follow suit in the coming days.

A deal, brokered by the Treasury, rescues the lender from administration – the route many had expected it to take following Dunfermline's collapse earlier this year. Its future was only made possible by the Treasury, which has created a new instrument for the sector that counts as core tier one capital, the key measure of financial strength. Under the arrangement, the subordinated debt holders will swap their £182.5m of loans for an instrument that shares in the members' profits. As such, it will be the first time in society history that members will have to split their benefits with an outside investor.

Ignore the date when the article was written, just have a quick read. Now repeat after me: "no-one saw it coming" - it was a "'Black Swan' event".

Posted by paul @ 10:54 PM 10 Comments

The number of homeowners whose mortgage is more expensive than the value of their property has reached the peaks of the 1990s recession in just 18 months. In the last recession, "it took almost six years" to 1995 for the number of those in negative equity to hit 1.1m, the Bank said in its quarterly bulletin, to be published on Friday.

Posted by alan @ 09:15 PM 14 Comments

A canny trade by a small brokerage firm in two markets at the heart of the financial crisis has left some of the biggest players on Wall Street crying foul. The trade, by Amherst Holdings of Austin, Texas, was particularly galling to the big banks because it turned what they believed was a sure-fire profit into a loss. The burned banks include J.P. Morgan Chase & Co., Royal Bank of Scotland Group PLC and Bank of America Corp. Some banks have reached out to two industry trade groups about Amherst's actions, and the groups are reviewing the transaction, according to people familiar with their thinking. "It's all-out warfare" between the banks and Amherst, said a senior banker at one firm that lost money.

Posted by nathan @ 08:39 PM 14 Comments

This is a few days old, but I believe that this hasn't been posted before. "Banks and building societies are pulling mortgage deals and raising rates, hampering borrowers’ attempts to re-enter the market. Over the past three weeks, Woolwich, Lloyds and RBS have all withdrawn loans for purchases and have not replaced them." "In April, HSBC cut rates for borrowers with deposits of just 10% but admitted last week that of the 12,000 applications above 75% of the property purchase price, only one in five borrowers received funding." "Brokers surveyed by The Sunday Times are finding a higher number of applications being turned down. Savills Private Finance reported about 30% were being rejected, against 20% a year ago."

Nadeem Walayat tells it like it is, describing how Gordo is leaving a "scorched earth economy" for his successors. "Thus total net borrowing of £490 billion to grow the economy by just £67 billion, (£595 billion my forecast) which shows the magnitude of the scorched earth economic policy now implemented that literally aims to hand the next Conservative government a bankrupted economy that will be lumbered with the consequences of continuing huge budget deficits and therefore necessary £60m cuts in public spending." Hyperinflation still on its way. More about "black hole" NHS & GPs pay.

Nationwide Building Society is to raise interest rates on fixed-rate mortgages by as much as 0.86 percentage points, as rising wholesale costs put pressure on its rivals to follow suit. "The high street lender is increasing rates on all its fixed-rate mortgage deals from Friday. The rise would add £6,450 to the cost of a £150,000 loan over five years".

Britain "obviously" remains committed to joining the euro following the currency's "success" in helping its members to weather the economic crisis, Lord Mandelson said."The newly promoted First Secretary of State, speaking in Berlin, hailed the euro as a saviour that had brought stability to the European Union during financial turmoil" (I thought Gordon Brown had saved the world).

Olivia O'Leary tells the story of the biggest economic crisis Ireland has ever known and its search for a post-crash identity. For the last 20 years the Irish economy was the pride of Europe. If the rush to riches was very un-Irish, Olivia tries to find out if her country is now reverting to a more familiar state of penance. William Butler Yeats described the indigenous character trait as an abiding sense of tragedy that sustained people through temporary periods of joy. or How the Liffey ran with champagne, the biggest p... up in history

This multinational law firm has started to hedge its cash in different banks fearing an imminent bank collapse. Do they know something we don't?

Treasury spokesman Robert Peston has announced that a rescue plan for West Bromwich will be put together in the next few days. They are due to publish their accounts on Monday, so I expect it will be before, or at the same time as that.

Posted by jonb @ 03:02 PM 7 Comments

Almost one third of potential first-time buyers scrapped plans to buy a house in the last 12 months because of the economy, show figures from the Letting Protection Service. The LPS found that 29% of current tenants in England and Wales intended to buy over the last 12 months but shelved their plans because of the economy.English Housing survey results published in September 2008 calculated that there were 1.7 million short hold tenancies in England and Wales – 29% of which is 493,000.Kevin Firth, director of the LPS, says: “These figures indicate the extent to which the property market has swung away from home ownership and towards rented property during the housing slump.

Arden Bement Jr is sitting pretty. He is director of the US National Science Foundation, which hands out grants to researchers in all fundamental fields of science and engineering, except medical sciences. He is the recipient of a $3 billion fillip as part of President Obama's stimulus package to get the economy working again...

Buy-to-let landlords are being hardest hit by the economic downturn, with new data showing they are losing their properties at three-times the rate of other property owners. Landlords have lost 4,100 properties, when cases of lenders appointing a receiver of rent are taken into account. Overall, 2,400 receivers of rent were appointed in the first quarter of the year, up eight-fold from 300 such appointments in Q1 2008. A receiver of rent collects rental income on behalf of a lender when the owner enters arrears on their mortgage. This figure is on top of the 1,700 buy-to-let properties were repossessed by lenders in the first three months of this year, as outlined by figures published by the Council of Mortgage Lenders (CML).

Puts forward all the current positive news and some new information to form a balanced overview of the currently positive indicators on the UK economy.

Sample comment: "The recession will never be over until we rid this country of the cheating, unsympathetic, unlistening Labour government that caused it. To say the country is recovering is a joke particularly when you live in the more depressed areas of the country like my family do. The local high street resembles a ghost town and the only booming trade is in charity shops and pound stores. Never has a government done so little for so many." Steve Hamblett, South Shields, United Kingdom

Posted by sold out @ 12:55 PM 11 Comments

Few aside from those who trade derivatives over-the-counter care about the DTCC. Here is a reason why you should: "Last year DTCC settled $1.88 quadrillion in securities transactions across multiple asset classes. We essentially turnover the equivalent of the U.S. GDP every three days."

Posted by devo @ 12:23 PM 8 Comments

So, in contrast to the BBC, at least the Times shows those bothering to read that whils tit might be up 16% against a pityful March 2009, the VOLUME of mortgages is down 28% on last year - not in my memory a boom year. Worse: The VALUE of those mortagages is down 40%. So: more smaller mortgages? FTB's you'd think?. But no, these are described as only a small portion. Comments please HPC-ers?

Not much to add really, it's just the Spring Bounce - it does funny things to people's capacity for rational thought.

While decoupling was overstated, could the chinese spending their surplus $1trillion (while it is still worth something) drive a partial recovery in the world economy. Could the policies of the US force the chinese to spend and what effects would that have globally. It is not that saving is inherently good or spending inherently bad as some of the killjoys on this site believe, in fact too much of either is bad in its own way. Could there actually be a reality about the green shoots, not driven by western consumption but by chinese state consumption.

The European Central Bank is paying close attention to mounting difficulties at 25 banks deemed crucial to the health of the eurozone financial system, fearing another wave of bank turmoil next year if the recession drags on.

Chinese port warehouses will be full and traders will look to beginNot only will the demand for fresh shipments collapse, but the queue of ships will be freed up once more, both of which should send the Baltic Dry selling. Index crashing again. This may have already begun, notes ANZ. The BDI is down 15% in the previous four trading days and another 4% overnight. The index is also in steep backwardation (expensive in the front month, becoming cheaper in latter months) which implies a short term squeeze. It is no great leap of logic to understand that movement in the Aussie exchange rate is closely correlated to movement in the BDI. ANZ would not be surprised to see a correction in commodity prices leading to a correction in the Aussie at least to the mid US$0.70 level in the second half

"The economy is not out of the woods and rates will stay low for some time – that was the message from Bank of England economist Kate Barker today, as new data showed a recovery in manufacturing." ... "I think there's a lot of concern about what's going to happen beyond this pick-up." Personally, I am concerned that QE will end badly for a lot of savers and the need to protect savers against sterling devaluation is becoming more important. If you can afford property as a long term asset then maybe OK but that's no use for millions of us. What next?

Posted by quiet guy @ 12:20 AM 6 Comments

June 10 (Bloomberg) -- The Federal Reserve unveiled its most detailed picture yet of its record $1 trillion expansion of credit, as Chairman Ben S. Bernanke responds to congressional pressure for greater transparency from the central bank. For the first time, the Fed announced details on the number of borrowers and the ratings of securities pledged as collateral for loans. The data come in a new monthly report released by the central bank today in Washington.

Nationwide Building Society, Britain's third biggest lender, is planning to raise interest rates on its most popular mortgage deals, in a move expected to force rivals to follow suit. Homeowners are being urged to lock into a deal as soon as possible after mortgage experts warned that the size of the Nationwide's increases will force other lenders to react by hiking their own interest rates.

''Britain may have come out of recession more than two months ago, a leading economic think tank suggested. ''

Posted by hpwatcher @ 08:13 PM 30 Comments

"Russia on Wednesday pledged to cut the share of U.S. treasuries in its $400 billion reserves, driving the dollar lower on global markets, although it said the move would be gradual and only replace bonds as they expire". "Russia holds around 30 percent of its reserves in treasuries after central bank asset managers last year cut their holdings of riskier assets such as bonds of U.S. agencies Fannie Mae and Freddie Mac". "Alexei Miller, chief executive of Russia's gas export monopoly Gazprom, called at a conference in Italy for a reform of "a system linking oil prices to only one currency" in favor of a multi-currency settlement system".

"Spiking U.S. mortgage rates drove down total home loan applications last week as demand for refinancing shriveled to the lowest level since November, the Mortgage Bankers Association said on Wednesday". "The average 30-year fixed mortgage rate jumped 0.32 percentage point in the June 5 week to 5.57 percent. That was nearly a full point, about 100 basis points, above the record low rate of 4.61 percent in March, the trade group said". "Borrowing costs have soared as bond yields have risen, even as the Federal Reserve has sopped up hundreds of billions of dollars in bonds to keep rates low and stimulate the housing market".

GMAC-RFC is offering to wipe thousands off borrowers’ mortgage debts if they remortgage elsewhere. GMAC-RFC- which stopped lending to new customers last year - says it is piloting the move with around 300 borrowers in a bid to free up funding and also help borrowers reduce the loan to value of their mortgage to 80 per cent following falls in property prices.Former Morgan Stanley lender Advantage, which stopped lending in 2008, is understood to be offering borrowers a similar deal, although no one at Morgan Stanley was available to confirm the details at the time of writing.MoneySavingExpert.com reports that Advantage offered one borrower the chance to wipe £25,000 off their mortgage.

Well its my first post so dont blast me away. I work in this industry and i am not seeing the money there once was, and as for the house/slave box builds the margins are nigh on zero. It sure is bad out here.

Yale housing guru Robert Shiller says the decline could play out for a long time, noting that Japan saw 15-straight years of year-over-year home price declines.

Why not raise savings interest instead? Or pay bigger dividends to shareholders? Major mortgage lenders are offering to knock thousands of pounds off borrowers’ homeloans if they move their debt elsewhere. One MoneySaver got £25,000 of debt wiped off just by responding to a letter. He originally received a £22,000 offer but haggled and yesterday got a further £3,000 knocked off.

** Old news, but I believe not posted as yet. Could This mark a real economy bottom for U.S.? Even though Obama plays that thought down. ** Ten leading banks won approval to repay money from the government's controversial TARP program, regulators said Tuesday, which could represent approximately $68 billion in bailout funds returned to taxpayers. The Treasury Department, which has overseen the $700 billion Troubled Asset Relief Program, did not indicate which banks were included in that group, although most lenders confirmed the news separately.

This is a quick history of the house price surveys where they come from and how they differ from one another. It was an interesting piece.

Two industry commentators have forecast property values to increase by mid-summer, after yet more evidence has emerged that house prices are continuing to stabilise. According to the latest, Chesterton Humberts Poll of Polls, the average house price fell by just 0.9 per cent in May to £162,473.This means that just £1,503 was wiped off the price of an average house in England and Wales last month, compared with the previous six month average of a £2,149 monthly decline.

Posted by jack c @ 11:49 AM 11 Comments

Various London boroughs have seen a significant increase in buyer confidence and sales over the last month, with one location calling the market "buzzing". According to the latest Kinleigh Folkard & Hayward London property comment for May, the housing market is looking up across London. The report discovered that the market in Southfields was "buzzing", with plenty of strong competition for property and a great outlook for the summer ahead.

Posted by jack c @ 11:40 AM 24 Comments

Where have I heard all this before?c

and that's only the ones with loans via lenders registered with the CML !! 19 mins in. Buy to let landlords are losing properties at more than three times the rate of ordinary owners. The BBC's been through the Council of Mortgage Lender's official numbers and analysis shows the number of landlords losing their properties is more than double the figure usually reported. The industry figures from the CML show 1700 buy to let properties were repossessed in the first three months of this year. Bernard Clarke from the CML explains why these figures show a lot more repossessions.

Posted by doomwatch @ 09:58 AM 9 Comments

Would it be appropriate to quote Adam Applegarth saying "Bloody Hurrah!"?

Just about all of the people stamping their feet saying that lending has to "return to normal levels" (including all of the policymakers I've seen wheeled out) are middle aged or older baby boomers with personal property portfolios, desperate to see house prices high and rising again "for the good of the country". Financial sustainability be damned, financial risk management be damned, affordability be damned, fiscal prudence be damned, inflation upside risk be damned, get my pension pot rising in value damnit!

Posted by paul @ 08:40 AM 12 Comments

Council of Mortgage Lenders figures show 1,700 buy-to-let properties were repossessed by lenders in the first three months of this year. But landlords lost 4,100 properties when cases of lenders appointing a receiver of rent are included.

Posted by phdinbubbles @ 07:51 AM 12 Comments

BRITAIN’S greedy banks were accused of “blatant profiteering” yesterday as they threatened to hinder chances of continued recovery in the property market by pushing up mortgage costs. Despite the current record low interest rate of 0.5 per cent – and taking billions of taxpayers’ cash to escape bankruptcy – lenders are still failing to pass on effective mortgage help to customers.

Posted by sold out @ 07:32 AM 10 Comments

The health service will face the most severe and sustained financial shortfall in its history after 2011, a report by NHS managers warns. A simple solution, sack all the over-paid managers with the massive salaries, easy jobs and money draining pensions. Retrain them all as nurses. Job done.

Posted by thecountofnowhere @ 12:08 AM 9 Comments

A London Underground strike? Has Bob Crow not heard about the state of the economy? I wonder from which source Bob Crow, the leader of the RMT union, gets his news. Whichever it is, I have some advice: change it. It seems that Mr Crow's news provider has omitted to cover a story that the rest of us became aware of a while ago: the collapse of the economy.

Posted by devo @ 11:44 PM 22 Comments

The only problem, says Charles Ortel, managing director, Newport Value Partners, a research firm in New York City, the money is just a drop in the bucket as far as what the government has shelled out to prop up the economy—and it’s not exactly working yet. “The government has spent trillions and yes, it’s nice to get some of it back, but it’s a distraction from the main event,” says Ortel. “Private sector jobs have fallen off a cliff. The country and homeowners and the government are awash in debt."

Article that uses HousePrice Crash Graphs. The most recent crash in 1989 took 7 years to reach its trough and 13 years to return to its former highs. But the crash in 1980 only took 2 years to reach the trough and 5 years to bounce back to former levels. So what are we facing? A long sustained drop in house prices or a quick ‘correction’? Concludes, "house prices needed to drop. They were getting silly and what we are seeing is a very swift correction." What amazes me is to get it confirmed once again that after previous crashes it has taken years for prices to get back to where they were pre crash so why does ANYONE think prices will be back to 2007 levels before 2020? So what are sellers waiting for?

''Gordon Brown will tomorrow open the door to dramatic reform of the voting system as he seeks to relaunch his troubled premiership.'' He is only going to change the system, if he thinks it will give him an advantage......is nothing safe from his infected fingers?

"The anti-fascist campaign group Searchlight, based in my constituency, constructed a unique coalition of faith groups, trade unionists, business people, celebrities and voluntary organisations to face down Griffin's storm troopers. They ultimately failed to prevent his election but without their campaign the nightmare of a dozen BNP victories could have become reality". "..We must be tough on fascism, and tough on the causes of fascism. A social housing revolution; a renewed and sustained regional investment strategy; policy priorities that reach out to voters who have never stepped inside a focus group. These are the weapons that Nick Griffin fears most". (You need to be an actress to mouth these lines!).

Nearly a third of Brits believe buy-to-let property investments are going to make a loss in the current climate, shows research from Unbiased.co.uk. Some 10% of over 55s think those invested in the buy-to-let market are likely to lose a lot of money vs. 10% of 18-34s who believe it is a good opportunity to make a lot of money. Londoners still see value in buy-to-let: nearly one in ten believe they will still make money from it.As buy-to-let lending continues to decline, research from Unbiased.co.uk, the professional advice website, reveals that consumer confidence is declining with it, as nearly a third of Brits, 28% believe buy-to-let property investments will make a loss in the current climate.

Anne, how about some journalistic integrity for a change. Go on, spend 5 mins working out why this months figures are a statistical aberration, NOT an upturn. LOW VOLUMES give strange up ticks. What you are actually seeing are the final twitches of a dying market, about to plummet into the abyss.

Posted by doomwatch @ 03:22 PM 12 Comments

Average three year fixed rate mortgage: 0.18% above Libor in Oct 2008 -> 2.78% above Libor May 2009. The new face of the credit crunch is higher borrowing costs. Probably going to get far worse as Government borrowing sucks up available credit.

Right now, ironically, the expectation of a Labour defeat might well be making the Treasury's job a little easier by giving them breathing space they might not otherwise have had. The pound and the government debt market have been helped by the fact that "the markets are expecting the Conservatives to get in and slash spending."

After this morning's RICS figures, DCLG have also announced some green shoots - prices rose 1.1% in April, with the annual rate of fall easing from 13.6% to 13%.

Posted by little professor @ 12:36 PM 9 Comments

Japanese government in a bind, should the economy recover their debt servicing costs will rise to an unaffordable level. At the same time, the economy faces increasing unemployment, an increasing deficit, and higher costs for pensions. Essentially government borrowing has hit/gone beyond the limit of affordability, and the sustainability of government finances in a perverse way depends on the economy staying in the doldrums to avoid a fairly immediate payments crisis. This is the situation we will eventually run into in the UK so worthwhile keeping an eye on events. The government have the advantage of a fairly low tax regime which can be raised considerably, low VAT/income tax etc, which we in the UK don't have as an option.

The Residential Landlords Association (RLA) has warned buy-to-let borrowers that lenders may try to change their borrowing rates as property values fall.The association highlighted that some mortgage agreements enable lenders to alter their rates if the loan-to-value ratio (LTV) changes substantially.For example, an 80 per cent mortgage on a £100,000 property would become a 100 per cent mortgage if the property dropped in value by £20,000.However, the RLA said of even greater concern were scenarios where lenders claim to be able to produce "valuations" in support of their own cases, even though the landlord’s portfolio of properties could be shown to meet the original LTV.

Lloyds Banking Group is to close all 164 branches of Cheltenham & Gloucester, risking up to 1,500 jobs.

Posted by peter_2008 @ 10:41 AM 20 Comments

The International Monetary Fund has called on eurozone governments to take urgent steps to clean up the banking system as losses mount, and advised the European Central Bank to prepare "all unconventional options" in case the crisis deepens.

Posted by flintster1994 @ 08:56 AM 7 Comments

About 6 per cent of estate agents across the UK said that property values had risen in May, while 42 per cent said that prices fell,

The balance of surveyor reporting rises rather than falls was -44%, up from -58% last month and the strongest figure since November 2007, and up from a low of -95% this time last year.

Posted by little professor @ 12:32 AM 21 Comments

Arnie implements draconian cost cutting measures to avoid running out of money next month. California waited until they had no choice, and now chaos is upon them. Gordon Brown seems to be on a similar path. I bet California wished they'd done this last year when they could have dictated the terms.

Those good people at SKy news just told me that 11 out of 20 of the city's leading economists predict that the economy has stopped contracting and will be ready to grow again shortly!!!! I wonder if these were the same leading economists that didn't predict the disaster zone that we are in now!?? By the way does anyone know how you earn the title of "leading"? Do you have to be any good at your job or do you send some tokens from a few cornflake boxes?

People would go any lengths to make you believe...

Posted by bulboy @ 03:09 PM 11 Comments

The Irish economy is once again under scrutiny today after the country's long term credit rating was slashed by Standard & Poor's (S&P). S&P said it was cutting the country's long-term sovereign credit rating from AA+ TO AA, while it also said its outlook for the country was 'negative', with concerns that the cost of supporting its banking system will be higher than feared the main reason for the move. In a statement, the agency’s credit rating analyst, David Beers, said: 'We have lowered the long-term rating on Ireland because we believe that the fiscal costs to the government of supporting the Irish banking system will be significantly higher than what we had expected when we last lowered the rating.'

Interesting piece from Friday's paper. Suggests inflation will get us in the end.

Posted by letthemfall @ 01:39 PM 8 Comments

The Bank of England today moved to appease critics protesting that its massive multi-billion pound purchases of government and corporate IOUs under its radical quantitative easing strategy have failed to ease the financial stress afflicting Britain's companies. In an apparent concession to critics, the Bank said it would expand its Asset Purchase Facility, under which it is buying £125 billion in corporate and government bonds so that it could purchase a wider range of commercial paper — short-term corporate debts — with a view to easing the supply of working capital finance to businesses

Posted by devo @ 01:26 PM 15 Comments

Article by Paul Krugman in the NY Times to feed Gordon Brown's manic delusion even more. He's just unlucky in having been caught up in the bubble, it's not a condemnation of left-wing governments, he just got caught up in wider global events... oh dear. Someone stop GB from seeing this or it will finally push him over the edge into Nero-style mania...

Posted by an bearin bui @ 12:14 PM 11 Comments

June 8 (Bloomberg) -- The biggest price swings in Treasury bonds this year are undermining Federal Reserve Chairman Ben S. Bernanke’s efforts to cap consumer borrowing rates and pull the economy out of the worst recession in five decades.

Don't be put off by the odd blog name. The article discusses the differences between the different house price indices and explains why prices aren't likely to rise anytime soon.

Conservative Daniel Hannan, who came top of the list in the south east, has once again called for Prime Minister Gordon Brown to stand down. He quoted from Dr Seuss: "You can go by foot, you can go by cow, Gordon Brown, will you please go now."

The fall in industrial output has been roughly equal to the 1929-1930 stage for Germany and the Anglo-Saxons, but worse for Japan, France, Italy, and Eastern Europe. The collapse in world trade has been swifter: the global equity crash has been twice as bad. "It's a depression alright." Global debt leverage is much greater this time. Capacity utilization is running at an historic low of 50pc-60pc. Companies will have to fire a lot of workers. This is where the danger lies. Trade data from Asia are flashing warning signals again. Korea's exports were down 28.3pc in May, reversing the April rebound. Malaysia has slipped to -26pc, and India has touched a new low of -33pc. US freight data is getting worse, not better.

Posted by drewster @ 12:23 AM 24 Comments

The British National Party has won its first seat in the European Parliament after gaining more than 120,000 votes in the Yorkshire and Humber region. Now, I hate to be called a racist but ive been saying for 6 months now...too many foreign nationals in the UK, too many poles, englands not got any englishmen in it, poverty breads hatred, can nazi gdermany happen again, if I was a non brit, i'd leave now...well, i thought maybe i was a bit mad...bit now...BNP, increase vote, UKIP, massive gains...that's because....imho...too many foreigners, indian call centers, poverty etc...the UK people speak out...they need to sort it out now...in 5 years times it'll be a lot worse!!!! Jesus, I'm a worried man.

Posted by thecountofnowhere @ 11:54 PM 40 Comments

Big banks are executing an increasing percentage of U.S. stock trades within their own walls, capitalizing on the credit crisis and enticing the most active traders away from the traditional exchanges. "Dark pools," where orders are anonymously matched so that traders do not alert the wider market to their intentions, have triggered concerns that stock pricing may not be transparent. But the growth of those run by broker-dealers such as Goldman Sachs and Credit Suisse are squeezing other "dark" electronic trading venues, as well as exchanges, resulting in lower fees. The bank-run dark pools have only recently gained some traction in Europe, while other countries, such as Canada, are watching closely for signs of success or failure as U.S. equity markets fragment into some 40 venues.

My advice is never trust a firm that uses Celebs to promote its product. Afterall Celebs tend to be be expensive and push up the price. But whilst this might be Ok for a Chocolate bar, not so good for a home. Afterall its one thing to think a celeb eats a certain brand of chocolate, but when they promote property, ask yourself, "do I expect them to be my neighbour living next door!"

"The millionaire Shaun Woodward and his wife saved up to £1.5m on the sale of a house". "Some ministers have gained financial advantage by saying one thing to the tax authorities — and another to the Commons authorities. Others have “flipped” their claims from one home to another, to maximise their allowances by ensuring their second home is the one needing the most maintenance or the highest mortgage payments. Woodward, who has a grace and favour residence at Hillsborough Castle in Northern Ireland has claimed more than £138,000 in MPs’ housing expenses since 2001. He last night issued a categorical denial that he had flipped his home or set out to avoid tax".

Paul Wilmott is out to save Wall Street's soul—one dork at a time. Wall Street's math gurus are, for the most part, still employed. Strangely, the banks need quants more than ever right now. If anyone's going to figure out how to price these toxic assets, it's them. Quantitative finance isn't going away, but it is in desperate need of reform. And one man—a math geek himself—thinks he knows where to start.

Posted by devo @ 02:14 PM 8 Comments

Gordon Brown faces his final task - the reshuffle. With ministers resigning left, right and centre the task could hardly have been more of a shambles. Lord Sir Alan Sugar meets with the unelected team leader in the boardroom to hear his delusional summary of the task. Watch it here

Posted by crown @ 09:13 AM 14 Comments

I quote: " The last thing we need is for prices to start surging again and it is unlikely that they will. ". Fast learner isn't he !

Ups and downs on financial markets were plentiful during the past week, but investor sentiment, on balance, brightened on the back of constructive financial and economic data – capped by a better-than-expected US non-farm payrolls report on Friday. As the risk appetite of investors swelled on the prospect that the global economy was on the mend, many stock markets reached their highest levels this year, and metals and oil continued their surge. Read more about this, together with some thought-provoking news items and quotes from market commentators during the past week, in the weekly “Words from the Wise” review: http://www.investmentpostcards.com/2009/06/07/words-from-the-investment-wise-for-the-week-that-was-june-1-%E2%80%93-7-2009/

Lenders face a £100bn ticking timebomb as the value of office blocks and shops halve . Up to £100bn lost....

For years, making money on property was simple: you bought a house or flat, you painted the kitchen, and, hey presto, six months later it was worth £50,000 more. Alternatively, you could not paint the kitchen and still sell it on for the same profit. In other words, regardless of what you did, the rising market would bail you out. But what about those who bought in 2007, just as the market was peaking? That is the question we set out to answer in my new television series, Property Snakes and Ladders, which starts on Channel 4 on Tuesday at 8pm.

"One in five people view properties they have no intention of buying just to have a nose around other peoples homes, a survey has shown". But - but - viewings are a strong indicator of green shoots.

THE prime minister’s newly appointed business champion, Sir Alan Sugar, is planning to lead a roadshow of bankers around the country in an effort to get them lending to small and medium-sized enterprises. In his first interview since taking up the new position, Sugar – who will be given a peerage – told The Sunday Times that getting the banks to start lending was at the “top of his agenda”.

Posted by devo @ 11:55 PM 13 Comments

That is right - the Assetz House Price Watch (HPW) analysis of all the major house price indices now shows a 10% annualised positive growth in May! What a turnaround! Distressed property prices stopped falling some months ago but now estate agent window/mortgage approval prices have also stopped falling. I'm sorry everybody, my forecast of 5% falls for this year was far too pessimistic and we are looking increasingly likely to have positive growth for 2009. If you've been sitting on your hands thinking you had longer before the bottom of the market, you haven't. This wasn't a house price crash, just a mild correction in the face of huge demand and house prices are now back to long-term average. You heard it here first!

Posted by little professor @ 04:28 PM 15 Comments

In the last few weeks, many Abbey flexible­ mortgage holders have received a bombshell letter telling them that ­because of falling house prices, the bank has reduced the estimated value of their property.

Posted by catmandu @ 09:13 AM 13 Comments

At the end of the worst week of his political life, Gordon Brown is still standing – just. The question is whether he can still govern. That must be answered because, with the challenges it is facing, Britain desperately needs a government.

Posted by devo @ 12:33 AM 32 Comments

Fraser Nelson of the Spectator nails Gordon Brown on his dodgy figures for budget cuts after the election. Here it is

Posted by crown @ 08:12 PM 20 Comments

...dig below the surface, and the outlook's much less rosy. Here are five reasons why UK house prices are set to slide – maybe a lot – further. Mortgage approvals are still 22% down on April 2008 and 60% below their 'pre-correction' levels Mortgage lending was down 52% year-on-year in April, while net lending reached its lowest for eight years, says the British Bankers' Association ..........and the usual interest rates / loan to income etc etc..

Posted by sybil13 @ 04:38 PM 8 Comments

Must-read insight from two workers from the financial industry in the City of London. "The risk is this: millions of home-owners who are already financially stretched will be pushed to breaking point once their mortgage resets, triggering another spiral of defaults, repossessions, write-downs, implosions and lay-offs."

construction industry could mean the UK economy shrank more than first thought in the first three months of 2009. The Office for National Statistics said that construction output fell by 9% in the first quarter, much more than an initial estimate of 2.4% ONS officials said "all things being equal", this could suggest the economy shrank 2.2% in the first quarter.

.S. job losses softened markedly last month, sending one of the strongest signals yet that the severe recession may be winding down. Still, another jump in the unemployment rate to a fresh 25-year high served as a sober reminder that even if the economy does stabilize in coming weeks, a rapid return to growth is unlikely given the pressures households face from a sluggish labor market. Nonfarm payrolls slid 345,000 in May, the U.S. Labor Department said Friday, well below the 525,000 decline economists in a Dow Jones Newswires survey had expected. Last month's drop was the smallest since September 2008, when the recession intensified in the wake of the collapse of Lehman Brothers. ** The consensus was -521,000 **

In a bid to gain more authority, Gordon Brown announces his reshuffle. I'm wondering what the odds are for Brown resigning (being sacked) by the end of the weekend. The link is not directly related to HPC unless of course you consider Brown culpable for presiding over asset price bubbles, economic mismanagement and debt levels that my great great grandchildren will still be paying off. Plus he's crap too!

A new UK property activity index has revealed that the housing market is showing signs of improvement.The Agency Express Property Activity Index bases its information on the volume and activity status of ‘For Sale’ and ‘Sold’ boards across the UK. It has found that the number of ‘Sold’ signs instructed by estate agents in May rose to its second highest level in 12 months - showing a 1.7 per cent increase on April and a 123.2 per cent increase on December 2008’s two-year low. The Index also reports a 2.1 per cent increase from April to May in the number of ‘For Sale’ boards being erected - the fourth month out of the last five that the number of new boards has increased on the previous month since December 2008.

Posted by jack c @ 12:56 PM 10 Comments

Graph 7 Page 2 - House prices remain the most potent measure of consumer confidence !

The Germans don't have our housing mania the Chinese are looking to Hong Kong.... Get used to being the underdogs - unless we can quickly adapt. Question: How many other businesses will follow?

One million people busted, broke, out of cash, and suffering the indignity of being swapped on the head with rolled up court proceedings.

Posted by stillthinking @ 10:24 AM 9 Comments

"the next 5 to 10 years for banks will be about managing existing loan books" Um, available financing is zero, but divide that by a normal transaction level of 100,000 a month. wait, think, think, price level must be..oh too difficult.... The poor unfortunate banks don't seem to realise the big plan is to reflate the housing bubble, and are trying instead to shrink their loan books. The toothpaste will not go back in the tube though, so plan b) rewrite loans for longer terms at more profitable margins.

Some comments form non vested interested parties regarding the recent rises in house prices according to the vested interested parties.

The US Securities and Exchange Commission (SEC) last night charged Angelo Mozilo, the former chief executive of America's biggest mortgage lender, with securities fraud and insider dealing...The SEC alleges that the trio misled the market by falsely assuring investors that Countrywide was primarily a prime-quality mortgage lender..."Mr Mozilo privately described one Countrywide product as 'toxic,' and said another's performance was so uncertain that Countrywide was 'flying blind'," he added.

Posted by mountain goat @ 09:29 AM 10 Comments

Are we finally seeing a return to the good times in the housing market? The Halifax's latest survey shows a price surge of nearly 3% in May compared with the month before. That’s the biggest increase in seven years and the Nationwide's also registered a rise for the same period. We talk to Jonathan Davis, managing director of chartered financial planners Armstrong Davis and Peter Rollings, managing director of estate agency Marsh and Parsons. 5 mins 30 secs.

PwC joint administrator Peter Spratt said: 'Following the well documented slowdown in the property market, the Rock board has re-evaluated its longer-term strategy and, after discussions with its lenders, has taken the difficult decision to place the company in administration.'

Posted by doomwatch @ 08:50 AM 8 Comments

* comments * Czech Republic joins East Europe's falling dominoes Swedish banks have lent more than $75bn (£46bn) to Latvia, Lithuania and Estonia, led by Swedbank and SEB. Hakan Berg, Swedbank's head of operations in the Baltics, said his bank can cope with the shock losses from devaluations across the region. "We have tested the worst-case scenarios. We have adequate capital. It would not bring the bank down," he said. The dramatic situation in Latvia went from bad to worse on Thursday as overnight rates reached 140pc, a sign that the country's currency peg in Europe's Exchange Mechanism is close to snapping. Credit default swaps measuring risk on Latvian debt rocketed above 750 after Latvia's treasury failed to sell a single note at a $100bn debt auction on Weds.

Posted by devo @ 12:15 AM 7 Comments

http://thecrownblogspot.blogspot.com/2009/06/adam-boulton-sky-news-lights-have-gone.html

Posted by crown @ 10:59 PM 7 Comments

The 35-year-old presenter used her Twitter page to complain, posting: 'Just been told I can't say "for god's sake!" or "Christ almighty" on TV (& it's channel 4!!). 'I am so sick of compliance I could scream - Aah!'

Posted by peter_2008 @ 10:40 PM 14 Comments

"The grim reality, just as one swallow doesn't make a summer, one spring bounce doesn't mean an end to the biggest property bubble in British history. In my view, this spring fever won't last. The harsh reality is that the number of property transactions, mortgage approvals and home loans remain below half of what is needed for stable and rising house prices...... So, my advice would be to ignore the nonsense spouted by estate agents, surveyors, mortgage brokers and property hacks. Not one of these vested interests predicted the crash - and none will predict its end, either

Posted by sybil13 @ 10:39 PM 11 Comments

They think its all over....

Even the Government has been surprised by the interest in its scrappage scheme, under which owners of cars of at least 10 years old, get a £2,000 subsidy towards a new model - with the cost split between the industry and the taxpayer. According to the latest estimates, about 50,000 cars have been bought under the scheme - costing the Government £5 million. At this rate of progress it is unlikely that the scrappage programme, for which £300 million has been earmarked, will last until the end of the year

FT's take on yesterday's Daily Mail story. "Up to half of the fresh cash being minted by the Bank of England is flooding abroad, official figures suggested yesterday." Foreigners are making use of QE to get rid of their UK Gilts. This is confirmed by a drop in lending by UK banks; depressing chart for BoE. "So inevitably, people will be asking whether QE is effective."

It's normally Sir Alan Sugar who does the hiring and firing but rumours are sweeping Westminster that he has been offered a job in the government.

Posted by happy mondays @ 03:20 PM 7 Comments

How did we survive the dotcom crash? By holding down interest rates and borrowing more. How will we survive the housing crash? err.. I'd hate to see the next crash if they manage to stop prices correcting themselves properly this time around

These figures still won't stop 1,500 estate agents being made redundant each week.

Posted by paul @ 12:28 PM 7 Comments

The Bank of England's interest rate setters have kept the cost of borrowing unchanged at 0.5% for the third month in a row. The Bank did not announce any fresh measures to stimulate the economy. Last month, the Bank of England announced it would be injecting an extra £50bn into the economy as part of its quantitative easing policy. Policymakers are trying to gauge how the economy is faring amid tentative signs of a recovery.

At the end of 2007, I set up a Rightmove scraper to get daily house prices for two regions I was interested in, Hemel Hempstead and Braintree. I have generated a graph for the data I have so far (see link). This seems to show a very strange pattern. If you average the data for both regions there is a general downward trend, but it seems that any variation from this average is always upwards for Hemel Hempstead and is matched by an equivalent downward variation for Braintree. This effect is more pronounced the more bedrooms the property has. It is difficult to explain in words, but should be apparent from the graph. Any ideas what is going on?

Posted by patchnpuki @ 11:31 AM 12 Comments

UK house prices rose by 2.6% in May compared with April but activity remains low in the market, according to the latest survey from the Halifax.

Posted by holding out @ 09:19 AM 9 Comments

UK house prices rose by 2.6% in May compared with April but activity remains low in the market, according to the latest survey from the Halifax. The lender, now part of the Lloyds Banking Group, warned against placing too much weight on one month's figures.

Posted by hpwatcher @ 09:18 AM 25 Comments

"Food price inflation in the UK is almost four times higher than in the rest of Europe while supermarkets have enjoyed record profits. Figures from the Organisation for Economic Co-operation and Development show that UK food inflation last year was 8.6 per cent, compared to an average of 2.2 per cent for the EU. In Germany there was a fall of 0.7 per cent, while in France prices rose just 0.8 per cent".

Posted by alan @ 08:39 AM 11 Comments

This analysis seeks to update the UK Recession Watch (Feb 09) that forecast a recession which would see GDP peak to trough contraction of 6.3% and followed by economic recovery in the fourth quarter of 2009. In conjunction with the economic analysis, this article will also seek to forecast the date of the next general election as well as outcome of the vote in terms of MP seats per major party.

Think this is just a reiteration of what the BOE official told Darling in March when he warned him "Not to Stop the Housing Crash, " saying: " 'it would be ‘dangerous’ for policymakers to try to stem the relentless slump in the value of property.' In testimony to the Treasury Committee, Mr Fisher said: ‘I think the most important thing for the housing market is that prices should be allowed to adjust to a level at which people can afford to buy houses.’ " See: http://www.dailymail.co.uk/news/article-1172383/Dont-try-stop-housing-crash-Bank-England-official-warns-Darling.html. The Daily Mail article seems to confirm that the BOE already know what THEY think should be done. Redwood too says END QE as : "this policy is keeping house prices higher than they need to be."

Posted by sybil13 @ 08:13 AM 7 Comments

For the last eight years, Sarah Beeny has been guiding budding property developers through the renovation game. Many failed to listen to her advice but often saw their bad decisions saved by a rising property market. But now with the housing market downturn, and lending still in crisis, there's never been a harder time to develop.

Posted by peter_2008 @ 12:13 AM 7 Comments

JPMorgan Chase & Co has hired a crude tanker vessel to store gas oil off Malta's coast, shipping sources said on Wednesday. The U.S. investment bank declined to comment. Storing any light, refined oil products in a crude oil tanker is unusual.

The US Treasury Department has invested about $200 billion in hundreds of banks through its Capital Purchase Program in an effort to prop up capital and support new lending. Here’s a list of the banks that got bailed out.

A failed Latvian government debt auction on Tuesday sent tremors across financial markets as investors feared that emerging nations round the world would struggle to find buyers for a huge wave of sovereign debt issuance.

Growing signs that the economy’s slump is easing off mean that Bank of England should pause this month in its aggressive eight-month campaign to jump-start growth, The Times Monetary Policy Committee says today. But members of the independent panel of economic and financial experts sounded grave warnings that the Bank must also be alert to dangers that an emerging recovery could quickly founder, or even prove illusory.

Warning strong language My latest Gordon Brown video using Glengarry Glen Ross footage

Hazel Blears, who has resigned as Communities Secretary, avoided paying capital gains tax on the sale of two 'flipped' properties - not one, as previously thought. ""I want to help the Labour Party to reconnect with the British people, to remind them that our values are their values, that their hopes and dreams are ours too" said Hazel.

Posted by alan @ 04:51 PM 22 Comments

This guy is offering a reward of £100K to find a buyer of his £2 million home in Devon. LOL.

Posted by will @ 01:13 PM 18 Comments

Economists are fantastically good at explaining currency movements - they can give you at least four for any particular change. What they're bad at is predicting them. Academic studies have found that complex economic models for forecasting exchange rates are precisely as reliable as tossing a coin.

Posted by peter_2008 @ 01:05 PM 7 Comments

According to the Land Registry, this newbuild house sold in Jan 2007 for 1.175m http://www.houseprices.co.uk/e.php?q=15+Argarmeols+Road+l37&n=100 ... It went for sale on Rightmove last week for 1.25m (i.e + 75k more), but as the HPC is officially over in L37 the agent decided to increase the asking price to 1.45m on 29th May (Property Bee) http://www.rightmove.co.uk/property-for-sale/property-22299019.html I would assume there were various incentives at completion (whitegoods, legal, moving & stamputy paid by the developer) meaning the actual price was slighty less than reported to the Land Registry. Please feel free to contact the EA to tell them what you all think.

Posted by mrr19121970 @ 12:41 PM 11 Comments

The housing crash is not over, although prices have dropped 25%+ so far, houses are currently STILL more unaffordable than any time in last 100 years. We will still have a crash the size of the 80's on top of recent falls, to reach back down to long-term affordibility trends. And who says our economy in the medium-long term can sustain even those levels?!!

boom boom boom everybody say eh o - "eh o"

Posted by techieman @ 12:02 PM 16 Comments

BT deserve all the losses they get... "employed at lower rates of pay by Tech Mahindra, an Indian company that BT Global Services has a 31% stake in." Would this happen in France where workers have backbone ?

Posted by doomwatch @ 11:01 AM 19 Comments

"Some of those who resigned or lost marginal seats in 2005 have since made tens of thousands of pounds selling or renting out flats that had been funded by the taxpayer. Other departing MPs passed subsidised properties to their children, while some who had already announced they were stepping down spent thousands of pounds of taxpayers' money furnishing or redecorating homes". "There is now growing pressure on party leaders to agree new rules to prevent retiring MPs profiting from taxpayer-funded properties".

Britain needs an emergency Budget immediately after the general election as public spending is set to soar to the highest level in post-war history, a leading think-tank has warned. The Policy Exchange has advised the next government that it must be prepared to make radical and immediate cuts to spending plans or face a serious risk of a full-scale sovereign debt crisis. In a new paper, it has also shown that only a third of the impending surge in government spending can be traced back to measures intended to combat the recession, with the rest going on increased budgets for ballooning government departments.

Yesterday brought more claimed sightings of green shoots in the devastated housing market. To me, they still look more like weeds on a deserted building site. Mortgage approvals in April were up 8 per cent on March, according to the Bank of England. But they were still down 21.9 per cent on last year and some sort of increase was only to be expected as the spring buying season started. The mortgage figures followed last week’s Nationwide housing index, which showed prices up 1.2 per cent in May, the second rise in three months. Halifax is yet to release its index and, while analysts expect it to show a fall, it is forecast to be much less steep than the 1.7 per cent registered in April.

14 page report from the GLA on London housing. On affordability they conclude "Initial analysis of the impact of the current downturn by the government’s National Housing and Planning Advice Unit (NHPAU) suggests that in the absence of large increase in housing supply the fundamental drivers of long term housing demand, such as population growth, mean that even a large short-term fall in house prices will not prevent housing becoming progressively less affordable over the next two decades."

I love the following quote, Blanchflower is clearly a complete tool "My strongest contribution was to see what had gone on in in the US, realise that recession was coming and call it earlier than others. My weakness was that we didn't do this early enough. He added that while "clearly" his colleagues had not been listening to him, the media and others had not believed him either. Christ even his biggest failure was other people no seeing what he saw!! No reference to how his monetary approach earlier in the cycle fueled the property/consumer/debt bubble.

Posted by bellwether @ 08:02 AM 20 Comments

"While the bars have been reduced by 7.2 per cent from 62.5g to 58g, their prices have remained the same". " Some customers may suspect a smokescreen to cover up what is a simple price rise largely caused by an increase in commodity costs".

Posted by alan @ 07:31 AM 13 Comments

''After a 75pc drop in mortgage approvals, record low transaction volumes and a 22pc fall in average values from their 2007 peak, some indicators suggest a floor has been reached. But the signs aren't yet conclusive. Further lurches downward cannot be ruled out. ''

Really useful look at situation in US which is far more progressed than here but relevant concepts for UK. Seems we are about 18 months behind them and started with a larger bubble. Some might argue that this is offset by constraints in building but I'm very sceptical of this argument as number of homes has increased more than the population since the 1990's when average prices were circa 3x average earnings.

A leading building society commentator reckons that at least five mutuals will fail within 12 months and 15 will be forced to merge. Ralph Silva of TowerGroup, the leading financial services research firm, said that up to 15 building societies could be forced to merge within the next year or so but that at least five others would fail on the lines of Dunfermline Building Society.

should flash the warning ..........danger ahead

Angela Merkel, the German chancellor, criticised the world’s main central banks in surprisingly strong terms on Tuesday, suggesting that their unconventional monetary policies could fuel rather than defuse the economic crisis. The attack on the US Federal Reserve, the Bank of England and the European Central Bank is remarkable coming from a leader who had so far scrupulously adhered to her country’s tradition on never commenting on monetary policy. “What other central banks have been doing must stop now. I am very sceptical about the extent of the Fed’s actions and the way the Bank of England has carved its own little line in Europe,” she told a conference in Berlin.

''FEARS that Gordon Brown is secretly plotting to scrap the pound for the Euro were fuelled yesterday after the scale of the Government’s stealth plans were revealed.... It now appears that Gordon Brown and Lord Mandelson have a secret Whitehall agenda to exploit their appalling mismanagement of the public finances and use it as an excuse to join the Euro.''

Posted by hpwatcher @ 06:09 PM 31 Comments

Pending Home Sales Surged 6.7% in April, the Third Straight Monthly Increase: probably a blip, no doubt

House prices around the world dropped further in the first quarter of 2009 as the global recession worsened, with Latvia seeing the largest falls. Out of 32 countries studied, 27 saw price falls over the year to the end of March 2009, property researchers the Global Property Guide said. Apartment prices in the Latvian capital Riga fell 50% over the year. The guide uses price changes after inflation to try to give a realistic picture of the property market.

State owned B&B says that 1 in 20 buy to let landlords are in arrears.

Lending to companies and households fell in April by the most since records began more than a decade ago, in a sign that the UK economy remains in the grips of the credit crunch. “With lending growth to the non-financial sector still sluggish, we still find it hard to see how a strong and sustained recovery in the wider economy is possible,” said Vicky Redwood of Capital Economics.

Posted by devo @ 01:05 PM 6 Comments

So, who is going to buy those DESIRABLE shoe boxes in 5 years time?

Posted by peter_2008 @ 11:59 AM 12 Comments

The proportion of prime UK residential mortgages that are three months or more in arrears has more than doubled in the past year, according to new data. The rise is significant because it shows that the economic downturn is now starting to push up mortgage arrears among mainstream borrowers – as opposed to riskier subprime customers with patchy credit histories.

Predictions of a double dip in the housing market, forecasting a second fall in prices following the current widely recognised stabilisation, are misinformed according to Assetz. We have now had a market readjustment which is reaching an end according to the company which expects house prices to return to zero growth per annum by September 2009, and to rise thereafter. Assetz believes: “The 'double dip' has already occured and it is very unlikely we will see another dip in the near future. The negative effects on house prices from poor buyer sentiment and the lack of mortgages, are now receding. House prices are very close to long term affordability, and interest rates are likely to remain low for the forseeable future.”

Posted by little professor @ 11:29 AM 23 Comments

Amazing returns coming home for sovereign funds middle east governments and china from the 08 wreckage. "Abu Dhabi sold an 11 percent stake in Barclays on Tuesday, making $2.5 billion from an investment that helped the British bank through the financial crisis and raising fears that the rally in bank shares may be over."

View from a historian, the author of the ascent of money, giving the long view, as it were.

"Substantial repayments by banks of loans from the Troubled Asset Relief Program (TARP) could come soon, while the amount of capital banks are raising could lessen interest in the government’s plan to take toxic assets off balance sheets, Treasury Secretary Timothy Geithner told CNBC Tuesday. " The FT has a great video on this as well, with Bob Kelly from NYC Mellon bank about their reasons for repaying early. http://www.ft.com/cms/8a38c684-2a26-11dc-9208-000b5df10621.html So a lot of the printed money is to be returned?

The number of new mortgages approved for home buyers rose in April for the third month in a row, according to the Bank of England. Lenders approved 43,201 new loans to home buyers, although the number of loans to people moving lenders or topping up existing loans fell again. Approvals for home buyers are a good indicator of short-term trends and suggest sales may continue to rise.

Posted by jack c @ 09:09 AM 21 Comments

This is the second monthly increase recorded by Nationwide in the space of three months, and it comes at a time when there has been a lot of positive reports about the housing market; with both the Royal Institute of Chartered Surveyors, and the National Association of Estate Agents reporting rising transactions and the British Bankers Association reporting an increase in mortgage approvals for home purchases in April. The positive news brings up the possibility of a great irony however, in that it may be the amassing of positive news that leads to the extermination of any green shoots that there may be.

This article discusses an interesting study on the relationship between the manufacturing PMI and stock market returns. "... the strongest part of the typical bull market is during the phase when economic and profit growth is still negative, but the deterioration is slowing," said the report. The link is: http://www.investmentpostcards.com/2009/06/02/less-bad-pmi-good-for-equity-returns/

There are signs that the British housing market may be touching bottom, with prices and mortgage approvals rising in the last month. Both suggest that the worst of the slump is over. But it would be a big mistake to read too much into those figures -- and it certainly isn’t a signal that the U.K. economy is pulling out of the steepest recession in the last 20 years. While house prices may steady, they still have further to fall. Though property inflation may have led the last boom, it won’t lead the next one. The U.K. economy still has plenty of pain ahead. In a market that is falling, there will always be one or two months when prices edge up. It’s called a blip.

A dire warning that the Republic is a prime candidate to go bust has come from one of the world's leading economic historians. "The idea that countries don't go bust is a joke," said Niall Ferguson, Harvard professor and author of The Ascent of Money. "The debt trap may be about to spring" he said, "for countries that have created large stimulus packages in order to stimulate their economies." His chosen prime candidate to go bust is "Ireland, followed by Italy and Belgium, and UK is not too far behind".

Posted by flintster1994 @ 08:00 AM 22 Comments

House prices rose in more than half of the country during April, according to official Land Registry data, which suggests the worst of the property crash may be over.

"After a heavy drinking session, Joseph Young, 23, collected the keys to the £650,000 house from his office so he and two friends could continue to party. Once inside, the trainee estate agent and friend ripped out door frames and smashed chairs, statues and picture frames. They poured Tipp-Ex fluid over duvets and damaged a vintage car in the garage...".

Posted by alan @ 06:58 AM 12 Comments

Nationwide now charging 18.9% on authorised overdrafts (aka loans). No comment on what might happen to the housing market when mortgage rates (aka loans) move in line with this.

The FSA paid its staff £19.7m in bonuses last month, a 40 per cent increase on last year’s payouts, according to figures obtained by the Liberal Democrats. A Freedom of Information request revealed that £4m went to executives earning over £100,000 and one employee received a bonus of £90,000. The average bonus paid to regulator executives was £19,100, while the average for other staff was £4,107. Liberal Democrat shadow culture, media and sport secretary Don Foster says: “The size of some of these pay outs would be hard to justify at the best of times, but it looks especially bad in the current economic climate. “Regulators must now follow the lead of those in the rest of the public sector who have promised to freeze executive pay.”

Posted by jack c @ 07:45 PM 8 Comments

"Gwyn Prosser, paid his brother from his taxpayer-funded expenses to carry out work on his London flat - despite the fact that he lived almost 200 miles away. The same year, Gwyn Prosser, the MP for Dover and Deal, also made claims totalling £2,782 for work at another flat he owned in London, even though it had not been his designated second home for three years and he was renting it out". "He changed his second home designation to the new flat, but in March 2006 Mr Prosser attempted to recoup the costs of work on his first flat three years previously", etc.,etc. "The claims will raise concerns over the way in which some MPs used second home allowances to build up property portfolios".

Public confidence in the housing market is higher than at any point since September 2007 and the Northern Rock bail out, shows propertyfinder.com’s May survey of confidence in the housing market. Some 60% of the 2,050 respondents thought house prices would rise by May 2010, with only 32.5% forecasting a fall. 8.5% of respondents thought house prices would be unchanged in twelve month’s time. The survey shows a healthy rise on April when half of respondents, 49.9% believed house prices would increase in the next twelve months and is the sixth consecutive month of improving confidence. The rise in confidence suggests the number of housing transactions is likely to grow.

Major Spanish bank actually preducting 7.5% drops in 2009, and 10.5% in 2010, with already around 20% so far.... why would the UK fare any better?

early days, but the dows up for 3 months in a row, and 200 points again today, even with Government mototr and Chrysler unfolding

Ed thinks we are due further falls......

Harvey Jones celebrated when the property market crashed. But now, he's been forced to accept that a recovery is around the corner

The Federal Reserve is studying significant moves in the U.S. government bond market last week that could have big implications for the central bank's strategy to combat the country's recession. But the Fed is not really sure what is driving the sharp rise in long-dated bond yields, and especially a widening gap between short and long term yields.

Posted by devo @ 01:54 PM 9 Comments

It means 1,583 Cambridge homes - or 3.4 per cent of the city's 46,611 properties - were unused at a time when 7,300 people were registered on the council's waiting list. The figure is much higher than the Government statistic of 371 announced last year, of which 299 were council-owned.

G.M.Corp., "the world’s largest automaker for 77 years, began filing for bankruptcy by putting a New York affiliate into Chapter 11, a landmark for an industry that defined American economic might". " Bondholders are owed about $22.76 billion, the affiliate filing said. The United Auto Workers are owed about $20.56 billion, excluding “approximately $9.4 billion corresponding to the GM Internal VEBA,” the filing said".

And as for that jackpot — well, it finally came more than 25 years later, in the form of the worst economic crisis since the Great Depression.

Says Ray Boulger at John Charcol..."Five months into 2009 it is becoming clear that just as most forecasts for house prices in 2008, including mine, were not pessimistic enough, nearly every forecast for 2009 is going to be too pessimistic. My forecast made six months ago for 2009 was for a fall of 8pc by mid year, followed by a modest recovery leaving the market a net 5pc down on the year. Despite the fact that my forecast was one of the least pessimistic I now think it is beginning to look too pessimistic." Hmmmm, let's see what happens next...

Posted by jvm @ 12:48 PM 15 Comments

“Chinese assets are very safe,” Mr Geithner said, answering a question after his opening address at Peking University this morning. His answer was greeted with laughter by the students, who question the wisdom of China spending huge amounts of money on US bonds instead of improving domestic living standards.

House prices in England and Wales fell slightly again in April, according to the Land Registry. The average house price fell by 0.3% that month, with the annual rate of decline remaining at 16.2%, the same as it was in March. "Although property prices are still falling, the speed of the fall has been fairly static over the last couple of months," said the Land Registry. The number of properties sold was still low, at 42% of the level a year ago.

Posted by doomwatch @ 11:34 AM 10 Comments

House prices were unchanged in May, the first time in 20 months they haven't fallen, but survey compilers Hometrack expect more falls to come. Compared to May last year, the survey shows house prices were 9.6% lower, having fallen 10.1% in the year to April. Richard Donnell, Hometrack’s director of research, thinks May is a blip in a still downward trajectory for prices, because a temporary combination of stronger sales volumes, continued buyer interest and a dwindling supply of property for sale provided a short term boost to market confidence.

Best line admitting ongoing issues: "Hometrack said. It added that, despite these indicators [more demand] , the outlook for the housing market remained fragile"

T2 Partners has a phenomenal series of charts on the housing crisis stating Why There Is More Pain To Come. The report is 69 pages almost all of them loaded with charts. I took a liberal selection below, adding plenty of comments, but please take a look at the original article for many additional charts. All charts below are from the article. Quotes from the article in italics. My comments are in plain text.

Posted by nadeem walayat @ 12:56 AM 7 Comments

B&B, which has borrowed more than £20 billion from the Government so far, is set to borrow billions more because its wholesale loans from the private sector are maturing much faster than its mortgages are being paid back, creating a widening working capital shortfall.

Posted by devo @ 12:30 AM 6 Comments

Gazumping has returned to the property market as confidence among estate agents reaches its highest level since the credit crunch began. The practice - where a seller ditches an accepted offer in favour of a higher one from a rival buyer - is hitting ­popular parts of London for the first time in months, estate agents said. And it is now likely to strike other towns and cities where prospective buyers outnumber properties. Meanwhile, figures out today from Hometrack show average house prices across England and Wales were unchanged in May for the first time in 20 months. Hometrack director Nicholas ­Leeming, said: “A large majority believe the housing recession is almost at an end. Although prices may yet drift a bit lower before beginning their recovery, the worst is now behind us.”