Friday, September 18, 2009

It’s the summer, stupid.

Summer drop in mortgage lending

A 13% drop in mortgage lending from July, but it can all be explained by the usual 'summer drop'. It's also a 37% drop from last August. July was down 36% from the year before, so the summer must have been especially summery this year.

Posted by reader @ 11:46 AM (1981 views)
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21 thoughts on “It’s the summer, stupid.

  • -1) reader said: It’s the summer, stupid, A 13% drop in mortgage lending from July

    reader you must really be stupid if you don’t understand seasonal variances.

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  • ‘13% drop in mortgage lending from July’ and yet this from one of the articles below:

    ‘However, mortgage approvals by major lenders rose in August for the seventh consecutive month to 57,000 from 53,000 in July, the BoE’s monthly Trends in Lending report showed.’

    Doesn’t quite add up. Someone being a tad to economical with the truth possibly?

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  • When mortgage lending goes up its due to green shoots in the housing market

    When mortgage lending falls back down its due to the time of the year!?!

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  • mark wadsworth says:

    Hey ho!

    It looks like The Spring Bounce is finally over, so it’s tea break over and back on your heads. I still remember fondly the day that Halifax announced a monthly price fall of 2.5% (when was that?) and the first time it went y-o-y negative, and the first time it went 5y-o-5y negative, so we can now sit back for a nice cozy autumn/winter posting articles here and saying “I told you so” and taking bets on when Haliwide indices go 6y-o-6y negative and so on.

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  • OK, a quick trawl of old CML reports..

    July – August comparisons..

    2005 +9%
    2006 +8% (a record)
    2007 – 6.5%
    2008 – 12%
    2009 – 13%

    Does that look like a harbinger of a booming autumn market?

    – I think not..

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  • When (if?) we see 2 consecutive monthly falls only then (IMO) will it be time to get bullish about being bearish again.

    MW you may very well be right re the ending of the DCB. The next few months are going to be interesting either way.

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  • UT reverted re Barratts in yesterday’s thread in an earlier thread today.

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  • techie,

    Your approach is indeed a very technical one – you would probably have been interested to see Mark Barton’s detailed technical argument for a continuing bull market on Bloomberg this morning.

    My own approach is a blend of maths and a good understanding of human weaknesses – I have a good memory for the sentiments that prevailed in the past, and how they were confounded.

    I piled into Barratt, because the share price was valuing their land bank at around £15k per plot (when it was at 79p). Guessing that we had a bear market rally, and a fairly short false dawn on the property market, I sold 40% of my holding to bag a 100% gain, and another 40% to bag a gain of £1/share. They have now roared ahead by nearly a quid more..;( – but I still have 5,000 shares, and it’s my best earner of the year.

    My mistake was thinking the equity market was still essentially bearish. I now think we have a genuine bull market, but a fragile one. Shares are beginning to show their best 12 month prices, and with the post Lehman dip starting to go off the radar, I think we will see a lot of private funds directed into equities – until something upsets the apple cart again…

    Every so often something comes along that seems to be doing really well, but requires a leap of faith to believe that it’s all hunky dory.

    LTCM and the ‘Quants’ come to mind, as does Enron and Madoff; and how could Allen Stanford afford to pour so much cash into cricket?

    Banco Santander fits the same mould. No-one seems to have a convincing argument to explain why a bank based in a grossly over-borrowed country, one that expanded its operations in a spectacular fashion; should somehow be coated with Teflon..

    .. very smelly…!

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  • To my leap of faith list, you can of course add the Icelandic banking industry, not to mention Northern Rock.

    I’m tempted to add Bradford & Bingley, but there was no secret there – everyone knew they were being incredibly stupid..!

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  • Not long to go now.

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  • I think that a littering of bullish posts by smiling may prove to be one of the best leading indicators of a house price downturn!

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  • uncle tom said, “Banco Santander fits the same mould. No-one seems to have a convincing argument to explain why a bank based in a grossly over-borrowed country, one that expanded its operations in a spectacular fashion; should somehow be coated with Teflon..”

    – luck? There is always the chance of sitting on that tail 🙂

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  • Banco Santander make a lot of money from Latin America, who haven’t had a housing bubble (I think, this is all I can find from a quick search)

    That could explain their health, although if it were the reason then I’d expect to hear a lot more shouted about it.

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  • hi – 51ck-6-51x,
    @-7 I think that a littering of bullish posts by smiling may prove to be one of the best leading indicators of a house price downturn!

    Glad to be of help ‘crash doomsters’-

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  • UT re ftse 100 :as you know quite near to the actual low I was forecasting an end to the bear, and a move higher. Once that move breached a level (I think it was 3950, I expected a short pullback and then a move upwards). That was purely technical and was the first place I could see where the (first leg of the) bear market was over.

    After a move to 4520 either the first leg of the bear or the whole bear was over. A pullback from there meant that there would only be confirmation of a second leg of the bear market rally when the 4520 was breached. At that time I was looking to see but then made the case for 5120 – 5150 – when the market was around 4800. Now based on the patterns I THINK we are quite near although the idealised pattern would be a stuttering move with a downward emphasis and then one more move up. Am I backward trading – no; a search can be done for “techieman and 4520” or 5150.

    Of course we have broken 5150 today and I did say that there could be a bit of a blow-off but I didn’t think that – i still dont. All in all IF (and im not) I were long then I would be out of most around the 5120-5150 level and probably be running a quarter. I think I mentioned an OCO at 4800 longs – which have never been in any real danger.

    Even if this is a bull market, I still think there will be a decent (say 300 points +) correction soon. Of course I could be wrong.

    As for your analysis my only view (which i again espoused here) was that @ 5p in November 2008 Taylor Wimpey was effectively a call option on the property DCB. But I don’t trade individual shares, shame! But of course UT I wish you well and congratulate you on your profits.

    Personally I chose cable rather than the Euro in the last few days to go long of against the £. Basically for two reasons. Anticipated the high around 1.70 – 1.73. Then once we had a low of just under 1.60 I then expected a pullback to the 1.65 -66 level. Shorted the day after a doji. So far 2 cents in the money but am willing to hold these and possibly add to them – its not a huge position. If it goes back I am willing to hold currently for a 2 cent loss – but a break of 1.6380 to me looks like a pretty bad omen for the £ and we could have some downside acceleration next week if it closes near the lows of this week. (its now 1.6300)

    I will take a look at Barton. Thanks.

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  • Hi techieman

    I seem to recall you mentioning that the ftse could get upto 5120-50, but then we could see new lows. ( Itook it by new lows you meant below the large recent low 3600 ish).

    Is that still a view of yours or is about 300 points all we’re likley to with regards to a pullback ?

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  • str yes _ the view is unchanged . I am just saying that if i am wrong then i think we will have at least a three hundred point downward move .

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  • Techieman

    Cheers. Interesting to see what the Autumn has in store, I was too busy and disorganised to take advantage of the recent lows and subsequent run up, but am now much closer to being in position.

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  • My observation is that the FTSE is currently showing little sensitivity to bad economic news – if one of the key stats comes in slightly worse than expected, there is virtually no reaction.

    This is telling me that equities are attracting cash from those who have been starved of ‘something good’ to put their money into – the amateur investor more than the fund manager.

    Given that, my guess is that the bull run will continue until there is a signficant upset.

    What then? I don’t buy the argument that the FTSE will then plumb new lows. Business has not been idle – they have been adjusting for lower levels of activity, and restoring profitability. That some weak businesses have gone down means that those that remain can often trade at pre-crunch levels – or even better.

    – Not all the news is bad…

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  • In hat case UT perhaps New Labour have conquered the boom and bust asterall. Well I say conquered, morfed into boom and then drop interest rates through the floor and print money like crazy.
    The effect to the majority of people though is fairly minimal. In fact I’d say the majority of people with mortgages and those that have maintained household income have been better off.
    There’ll be some who also opped up their pensions with bank shares back in March and maybe an extra BTL.

    It seems incredible to me that people can be made to feel better off during what was billed as the biggest economic disaster since 1930, if not ever.
    Unless of course it’s all largely been smoke and mirrors and payback time is just around the corner.

    I want to be positive, but don’t feel we’ve come close to the recession we were due – yet.

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  • PS sorry but the battery on my keyboard is going flat hence the typos.

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