I am assuming here that the Brown Bust lasts from 3rd quarter 2008 to 2nd quarter 2010. Most of the list are put together from the following factors (most of them are Brown mistakes) -
1 - expanding during a boom with no thought of a slowdown
2 - overdependent on 1 revenue source
3 - not modernising
4 - The Brown classic - taking on way, way too much debt.
I reckon most of these that fail, will be picked up by another organisation as demonstrated by Whittards and officer club this week.
High Street
Burton - (Green closes this down)
Tie Rack
Waterstones (HMV closes this down)
Zavvi - obviously!
Cafe Nero
Focus (DIY)
Plumbase (part of Grafton Grp)
Wickes (part of Travis Perkins)
Borders
Woolworths - GONE
MFI - GONE
Whittards - Private Equity sale
The Officers Club - Management buy out
Sports
Formula 1 - way too expensive, dependent on Ad revenue and owned by a massively indebted organisation.
Manchester United - over £600 million in debt
Liverpool - owes £350 million to RBS and Wachovia to be renegotiated in 2009
Chelsea - owes Abramovitch £550 million and he is going under.
Right - that will do for now. Must add some mobile phone companies later today
Wednesday, 24 December 2008
Tuesday, 23 December 2008
2 great spitting image clips
The first clip is from 1985 and relect the rising unemployment of the time, rather similar to where we are now going
The second clip is again from 1985 and refers to a weak currency, again rather similar to where we are now.
The second clip is again from 1985 and refers to a weak currency, again rather similar to where we are now.
Sunday, 21 December 2008
Gordon Brown to charge the poor penal interest rates
I see Gordon has been sitting in the dark thinking the unthinkable again. It would appear that Gordon wants the social fund (that currently lends at 0% interest) to lend at 27% interest rate.
This is the fund that lends to the most needy in emergencies. This comes on top of his doubling of the tax on the lowest paid and forcing them to fill out long forms to claim any of the money back from his grubby hands.
He may give speeches giving his support for the poor, but his actions speak louder.
Will nobody rid us of this person?
I can't believe that the Miliband brothers cannot muster some sort of No 10 eviction for Gordon.
This is the fund that lends to the most needy in emergencies. This comes on top of his doubling of the tax on the lowest paid and forcing them to fill out long forms to claim any of the money back from his grubby hands.
He may give speeches giving his support for the poor, but his actions speak louder.
Will nobody rid us of this person?
I can't believe that the Miliband brothers cannot muster some sort of No 10 eviction for Gordon.
Tuesday, 16 December 2008
Why an early 2009 election is coming
There is a lot of chatter at the moment on the possibility of an early 2009 election. I offer below some reasons why it may happen.
1 - Brown is keeping the blame for the recession firmly pinned to America's door. The journalists are falling for this and cannot see that Gordon Brown has any responsibility for the mess. As the rest of the world emerges from recession later next year, it will become obvious that we have a worse situation here which can only be blamed on GB. The sooner that Brown goes to the country, the sooner he can test the line that the voters will hold on to him to see us through the crisis, rather than kicking him out and blaming him for the crisis.
2 - If he calls a GE in June 2010, we will either be still in a recession or just out of a recession. If we are still in a recession, he will be taking the blame after more than a year of misery. If we are out of a recession, do we really need his 'save the world' mission.
1 - Brown is keeping the blame for the recession firmly pinned to America's door. The journalists are falling for this and cannot see that Gordon Brown has any responsibility for the mess. As the rest of the world emerges from recession later next year, it will become obvious that we have a worse situation here which can only be blamed on GB. The sooner that Brown goes to the country, the sooner he can test the line that the voters will hold on to him to see us through the crisis, rather than kicking him out and blaming him for the crisis.
2 - If he calls a GE in June 2010, we will either be still in a recession or just out of a recession. If we are still in a recession, he will be taking the blame after more than a year of misery. If we are out of a recession, do we really need his 'save the world' mission.
Thursday, 11 December 2008
Brown Sectioned - another Daily Mash cracker
From the Daily Mash - absolutely class
| BROWN SECTIONED |  |  |
Mr Brown was admitted to a secure unit and will undergo tests later today
PRIME minister Gordon Brown was last night under observation in a London psychiatric hospital after claiming to be Spiderman.
Mr Brown told the Commons that he had 'vanquished' both Doctor Octopus and the Green Goblin through a combination of superhuman agility and a strange 'sixth sense' he acquired after being bitten by an irradiated spider.
He added: "I can also swing between skyscrapers and I'm very good at science. Have you guessed who I am yet?"
As Commons security staff moved towards him, the prime minister ran from the chamber, throwing his briefing notes in the air and removing his shirt and tie.
Mr Brown was finally captured when he attempted to scale the outside of the Palace of Westminster before falling and twisting his knee.
As he was handcuffed and helped into the back of an ambulance he shouted: "You have bound my hands because you are scared I will use one of my sticky webs!"
A Downing Street source said: "The weird thing is that sometimes he would claim to be Doctor Octopus and make all these terrible decisions and then he'd say, 'only Spiderman can stop me'. And then he'd wink at us."
The source added: "Spiderman was just one of his incarnations. For much of July he thought he was either Dangermouse or Count Duckula."
A police spokesman said last night: "A 57 year-old man from Central London was this evening taken into protective custody under section 4 of the Mental Health Act."
Wednesday, 10 December 2008
So what now for the year ahead?
Talk of a June 2009 General Election has filled me with some hope that Gordon Brown might at last put himself to the vote. And lose.
However on further reflection I would not be at all surprised if he does not manage to blag his way through an election campaign this early.
He is the master of deception, spin and lies. He still has the journalists' ear and can manage to blame this recession on global events and America.
It is only when the rest of the world emerges from whatever downturn is suffered and we are still mired in recession, that the truth will finally dawn on the public.
It is true that the Credit Crunch started in America, but it has only highlighted which countries have prepared the worst for a downturn during a boom.
Gordon is one of the most guilty for borrowing during the good times and leaving us with no room for manoeuvre during the bust.
So as Quarter 3 comes around and the economy has not recovered as Darling has pledged, questions will be asked.
A May 2010 election will see a Tory victory, the introduction of a cap on donations of £50,000 including Unions and the end of the Labour party.
Gotta go soon Gordon - real soon.
However it is said that our children and grand children will pay for Gordon's debt binge. Now this is the benefit of free movement within the EU, for I shall whisk the family off somewhere else and I will not be paying his debt legacy.
However on further reflection I would not be at all surprised if he does not manage to blag his way through an election campaign this early.
He is the master of deception, spin and lies. He still has the journalists' ear and can manage to blame this recession on global events and America.
It is only when the rest of the world emerges from whatever downturn is suffered and we are still mired in recession, that the truth will finally dawn on the public.
It is true that the Credit Crunch started in America, but it has only highlighted which countries have prepared the worst for a downturn during a boom.
Gordon is one of the most guilty for borrowing during the good times and leaving us with no room for manoeuvre during the bust.
So as Quarter 3 comes around and the economy has not recovered as Darling has pledged, questions will be asked.
A May 2010 election will see a Tory victory, the introduction of a cap on donations of £50,000 including Unions and the end of the Labour party.
Gotta go soon Gordon - real soon.
However it is said that our children and grand children will pay for Gordon's debt binge. Now this is the benefit of free movement within the EU, for I shall whisk the family off somewhere else and I will not be paying his debt legacy.
Seema Shah on Daily Politics
The wonderful Seema Shah was back in full bear mode today on the Daily Politics. Watch her here.
Here she is last captured on Sky in May
Here she is last captured on Sky in May
Gordon Brown saves the world at PMQs
Tripping over his words the hapless Gordon gives us this classic
Friday, 5 December 2008
Time to buy index for November 2008
In October the index stands at 206 unadjusted(U) and 252 adjusted(A)
This gives a guide that house prices are around 20% over valued and that market sentiment pushes that to 25% over valued. DO NOT BUY
That is not to say that house prices will fall by either, but it gives an idea of the direction.
House prices have fallen this month which has reduced the index. Residential rates and buy to let rates have fallen slightly.
The price to average earnings ratio has also fallen this month and is still indicating house prices are 20% above trend on this indicator.
Many buy to let deals have been withdrawn this month as well as last month and those that remain have seen a lowering of the Loan to Value needed. Credit remains tight.
The unadjusted index is now down from it's peak of 645 in July 2007
PREDICTION
House prices to continue falling with the Halifax index bottoming at £140,000 in Q4 2009.
In my opinion mortgage lending criteria has pretty much returned to normal even though lenders are still lending above average multipliers and mortgage rates have again returned to a longer term normal level.
The end of irresponsible lending means that lenders will never be returning to the days of lending with no deposit or waiving income checks.
House prices are still suspended about 20% above the level of finance that the banks are willing to give out.
Buy to let as one of the key drivers of house prices still does not makes economic sense at current rates. This sector will most likely never return to the heady days of 2007 as the age of irresponsible lending is over.
First time buyers are the main driver of the bottom of the housing market. First time buyers have rightly taken the view that it is best to wait out this drop before entering the market.
Method explanation here
Halifax data out for November 2008
Month on month house prices are down 2.2%. The Halifax report house prices down 14.9% annually, but they calculate this using this quarter against the quarter a year ago.
The true yearly drop is 16.1% on a seasonally adjusted basis. House prices peaked in August 2007 at £199,612 against £163,605 for November 2008. A drop of £36,007.
The last 12 months has seen the biggest falls ever from the Halifax. The previous biggest 12 month fall was in October 1992 of -8.5%
House prices have fallen 18.0% from the peak in August 2007 15 months ago. It took from May 1989 to July 1995 for house price to fall 13.21% that is 74 months and the bottom of the last housing slump.
This housing crash is now worse than the 89-95 housing crash and we have only just got going.
The last time house prices were at this level was July 2005.
Crown prediction is still house prices to continue falling with the Halifax index bottoming at £140,000 in Q4 2009. A fall of 30% or £59,600 from the peak in August 2007. That would be house prices returning to levels last seen in Q4 2003.
The true yearly drop is 16.1% on a seasonally adjusted basis. House prices peaked in August 2007 at £199,612 against £163,605 for November 2008. A drop of £36,007.
The last 12 months has seen the biggest falls ever from the Halifax. The previous biggest 12 month fall was in October 1992 of -8.5%
House prices have fallen 18.0% from the peak in August 2007 15 months ago. It took from May 1989 to July 1995 for house price to fall 13.21% that is 74 months and the bottom of the last housing slump.
This housing crash is now worse than the 89-95 housing crash and we have only just got going.
The last time house prices were at this level was July 2005.
Crown prediction is still house prices to continue falling with the Halifax index bottoming at £140,000 in Q4 2009. A fall of 30% or £59,600 from the peak in August 2007. That would be house prices returning to levels last seen in Q4 2003.
Tuesday, 2 December 2008
Land registry monthly data - November 2008
Latest data out today here showing another monthly fall of 1.5% with an annual fall of 10.1% now.
The graphs on page 12 show the full horror of house sales after a decade of Gordon Brown's debt binge.
To be honest this data is expected to show negative growth now as the data lags the Halifax and Nationwide data by between 3-6 months.
This data series will still be showing monthly falls 3 months or more after the Halifax starts publishing rising monthly prices again. that is not expected until Q4 2009.
1 year to go.
The graphs on page 12 show the full horror of house sales after a decade of Gordon Brown's debt binge.
To be honest this data is expected to show negative growth now as the data lags the Halifax and Nationwide data by between 3-6 months.
This data series will still be showing monthly falls 3 months or more after the Halifax starts publishing rising monthly prices again. that is not expected until Q4 2009.
1 year to go.
Bank of England mortgage approvals November 2008.
New data out for October 2008 here.
The usual commentary really.
Mortgage approvals for house purchase were 32,000 for October 2008 compared to 88,000 in October 2007 down 63%.
These are now bumping along this level and have been since June and must now signify the bottom of the approvals for home purchase.
Just goes to show how reckless the lending was. Gordon Brown was not the only irresponsible one here. Lenders have now adopted their old lending practices which include such crazy rules like-
checking incomes (barking mad)
capping borrowing at 4 times income (crazy tightness)
requiring a deposit (whatever next)
wanting to know how you intend repaying the mortgage (who thought that one up!)
If Gordon Brown wants lenders to lend again maybe he should mark all property down by another 20% and we can get on with sensible lending (see the 4 points above) on sensibly priced property.
If you are a first time buyer, your time is coming. Keep saving for your 5% deposit, because these deals will return in the later part of 2009. House prices will be down another 15%, mortgage deals will be equivalent to rent and the housing market will start a steady climb from Q4 2009.
Good luck.
The usual commentary really.
Mortgage approvals for house purchase were 32,000 for October 2008 compared to 88,000 in October 2007 down 63%.
These are now bumping along this level and have been since June and must now signify the bottom of the approvals for home purchase.
Just goes to show how reckless the lending was. Gordon Brown was not the only irresponsible one here. Lenders have now adopted their old lending practices which include such crazy rules like-
checking incomes (barking mad)
capping borrowing at 4 times income (crazy tightness)
requiring a deposit (whatever next)
wanting to know how you intend repaying the mortgage (who thought that one up!)
If Gordon Brown wants lenders to lend again maybe he should mark all property down by another 20% and we can get on with sensible lending (see the 4 points above) on sensibly priced property.
If you are a first time buyer, your time is coming. Keep saving for your 5% deposit, because these deals will return in the later part of 2009. House prices will be down another 15%, mortgage deals will be equivalent to rent and the housing market will start a steady climb from Q4 2009.
Good luck.
Xmas cards from Martin Rowson
Martin Rowson of the Guardian has some Xmas cards that you can print out here.
My favourite is this Gordon Brown's card
My favourite is this Gordon Brown's card
Friday, 28 November 2008
Gordon Brown's Downfall - The prequel
Been working on this a while, but it all came together this week especially the ending. Hope you enjoy - no cursing this time.
For those that missed the first Gordon Brown's Downfall video it is here. Cursing alert.
For those that missed the first Gordon Brown's Downfall video it is here. Cursing alert.
Thursday, 27 November 2008
Nationwide November data out today
Nationwide have released their November data report today here.
The data shows a drop of 0.4% for the month with an annual change of -13.9%. House prices are now down from their peak in October 2007 of £186,044 by over £27,600 or -14.9%.
Good news for first time buyers looking to enter the market as house prices become more affordable. Not so good news for those who overstretched themselves and jumped on the property bandwagon in the last few years.
Dreadful news for all those property speculators who bought second and third properties. Tough. Serves them right for taking property off the market and forcing up prices for first time buyers. With almost 90% of buy to let mortgages being withdrawn from the market place and the government consulting on new landlord rules, now is not the time to be a property speculator.
Now that Gordon Brown's time is almost up, maybe the authorities will never again mistake a boom for stability.
The data shows a drop of 0.4% for the month with an annual change of -13.9%. House prices are now down from their peak in October 2007 of £186,044 by over £27,600 or -14.9%.
Good news for first time buyers looking to enter the market as house prices become more affordable. Not so good news for those who overstretched themselves and jumped on the property bandwagon in the last few years.
Dreadful news for all those property speculators who bought second and third properties. Tough. Serves them right for taking property off the market and forcing up prices for first time buyers. With almost 90% of buy to let mortgages being withdrawn from the market place and the government consulting on new landlord rules, now is not the time to be a property speculator.
Now that Gordon Brown's time is almost up, maybe the authorities will never again mistake a boom for stability.
Gordon Brown names the date for the end of the recession
Gordon Brown has decreed that the UK economy will start to grow again in the 3rd Quarter 2009. This will prove to be another fudged figure, but for a laugh here is a countdown to keep track of how long it is until the Brown recession ends.
Watch Darling the puppet chancellor make the announcement here
Here is the Widget you need
If you want the code click on the option button and click on the HTML button and then copy. Good luck!
Watch Darling the puppet chancellor make the announcement here
Here is the Widget you need
If you want the code click on the option button and click on the HTML button and then copy. Good luck!
DARLING HAS SECRET PLAN TO KEEP BUGGERING ABOUT
One of the best Daily Mash offerings here
CHANCELLOR Alistair has a secret plan to keep buggering about with the British economy until he finds something that works, it was revealed last night.
The proposed logo for British Unicorns Ltd A confidential Treasury memo, published on a government website, proposes a series of tax rises and tax cuts introduced for two weeks at a time over the next five years.
The memo suggests a 75% 'supertax' for pantomime stars between December 5th and January 31st, suspending VAT on forks, cutting corporation tax for companies run by men named Ian and increasing child benefit for families who roam the land singing songs and performing magic tricks.
It adds: "Failing that we can just whack up VAT, murder the aristocracy and steal their houses."
The memo also reveals Mr Darling's secret plan to breed unicorns and sell them to Chinese millionaires.
The chancellor would invest public money in up to a dozen unicorn farms across the country churning out thousands of magical horses which would then be vacuum packed and shipped to the Far East.
Mr Darling believes that at £250,000 a unicorn the government could have paid back its £120bn of borrowing by the time Star Trek becomes reality.
The Conservatives last night dismissed the plan as the latest 'government con', insisting there was probably no such thing as unicorns and that it would simply be a load of donkeys with a bread stick glued to their foreheads.
CHANCELLOR Alistair has a secret plan to keep buggering about with the British economy until he finds something that works, it was revealed last night.
The proposed logo for British Unicorns Ltd A confidential Treasury memo, published on a government website, proposes a series of tax rises and tax cuts introduced for two weeks at a time over the next five years.
The memo suggests a 75% 'supertax' for pantomime stars between December 5th and January 31st, suspending VAT on forks, cutting corporation tax for companies run by men named Ian and increasing child benefit for families who roam the land singing songs and performing magic tricks.
It adds: "Failing that we can just whack up VAT, murder the aristocracy and steal their houses."
The memo also reveals Mr Darling's secret plan to breed unicorns and sell them to Chinese millionaires.
The chancellor would invest public money in up to a dozen unicorn farms across the country churning out thousands of magical horses which would then be vacuum packed and shipped to the Far East.
Mr Darling believes that at £250,000 a unicorn the government could have paid back its £120bn of borrowing by the time Star Trek becomes reality.
The Conservatives last night dismissed the plan as the latest 'government con', insisting there was probably no such thing as unicorns and that it would simply be a load of donkeys with a bread stick glued to their foreheads.
Friday, 21 November 2008
Labour justify more borrowing
Firstly I wonder if I should now drop the New Labour and go back to just Labour as they seem to be going back that way now with their economic judgement.
Anyway - listening to various government ministers over the last few days I wonder on the wisdom of some of their Tory attacks.
It seems every time they are asked about the extra borrowing that is going to be undertaken to fund their tax bribes, the government ministers refer to Tory plans within a few words of their reply.
The gist seems to be that the Tories are going to do nothing and that will condemn millions to be unemployed. This gives the suggestion that the Labour plans will stop a rise in unemployment.
At the moment I can only see increasing unemployment all around, so I wonder how we are to judge the government plans.
Anyway - listening to various government ministers over the last few days I wonder on the wisdom of some of their Tory attacks.
It seems every time they are asked about the extra borrowing that is going to be undertaken to fund their tax bribes, the government ministers refer to Tory plans within a few words of their reply.
The gist seems to be that the Tories are going to do nothing and that will condemn millions to be unemployed. This gives the suggestion that the Labour plans will stop a rise in unemployment.
At the moment I can only see increasing unemployment all around, so I wonder how we are to judge the government plans.
Thursday, 20 November 2008
So is Gordon doing a good job?
OK - if you read this blog you will know that I am not the biggest GB fan. In fact I think history will judge him as one of the most destructive political figures ever.
However, from a neutral position I think he is handling this crisis well. Let me explain. The sub prime crisis did indeed start in America and the resulting credit crunch is being felt around the world.
Gordon Brown has expertly turned this to his advantage. The Yanks have blamed the crisis on Wall Street and now Gordon is blaming our banks and the Americans for our problems. It is correct that some of our problems are the fault of the Americans but by no means all.
Is it the American's fault that we have the largest amount of personal debt in the world? Now Gordon is able to blame all our woes on this single US caused problem.
Gordon is so slippery that he is now able to switch positions and say that the Tories prudence is a disaster and his unfunded tax cuts are brilliant.
However, from a neutral position I think he is handling this crisis well. Let me explain. The sub prime crisis did indeed start in America and the resulting credit crunch is being felt around the world.
Gordon Brown has expertly turned this to his advantage. The Yanks have blamed the crisis on Wall Street and now Gordon is blaming our banks and the Americans for our problems. It is correct that some of our problems are the fault of the Americans but by no means all.
Is it the American's fault that we have the largest amount of personal debt in the world? Now Gordon is able to blame all our woes on this single US caused problem.
Gordon is so slippery that he is now able to switch positions and say that the Tories prudence is a disaster and his unfunded tax cuts are brilliant.
Wednesday, 12 November 2008
PMQs 12th November 2008
First Clip
Gordon Brown has his worst day at PMQs when he accuses Cameron on playing politics with the death of Baby P. The exchange hots up around 3.30 minutes into the clip.
Second Clip
Gordon can't answer the question of what economic theory was behind his claims of no more boom and bust
Third and final clip
Jon Cruddas, Andrew Neil and Charles Kennedy respond in the Daily Politics studio
Gordon Brown has his worst day at PMQs when he accuses Cameron on playing politics with the death of Baby P. The exchange hots up around 3.30 minutes into the clip.
Second Clip
Gordon can't answer the question of what economic theory was behind his claims of no more boom and bust
Third and final clip
Jon Cruddas, Andrew Neil and Charles Kennedy respond in the Daily Politics studio
Tuesday, 11 November 2008
Tory Boy McNulty
The likeness has always been there, but now that McN is a convert to the tax cutting agenda (a long way from his socialist roots) the similarity is all the more striking.
Friday, 7 November 2008
Grumpy Tony McNulty on the daily Politics
I think poor old Tony has maybe had too many beers last night to celebrate Labour's dramatic hold of one of their safest seats in the Glenrothes by-election.
Watch his grumpiness here
Watch his grumpiness here
Thursday, 6 November 2008
get ready for BOE rate cut at midday
Likely is a 0.5% cut. I'm still going for a 1% cut.
Lenders will normally pass this cut to tracker mortgages by the next month.
There is one lender who takes 2 months to pass this on.
Any idea?
Yes you got it - it is Gordon Brown's bank Northern Rock
Lenders will normally pass this cut to tracker mortgages by the next month.
There is one lender who takes 2 months to pass this on.
Any idea?
Yes you got it - it is Gordon Brown's bank Northern Rock
Time to buy index for October 2008
In October the index stands at 329 unadjusted(U) and 414 adjusted(A)
This gives a guide that house prices are around 32% over valued and that market sentiment pushes that to 41% over valued. DO NOT BUY
That is not to say that house prices will fall by either, but it gives an idea of the direction.
House prices have fallen this month which has reduced the index. Residential rates and buy to let rates have remained level for new borrowers despite rate cuts.
The price to average earnings ratio has also fallen this month and is still indicating house prices are 20% above trend on this indicator.
Many buy to let deals have been withdrawn this month as well as last month and those that remain have seen a lowering of the Loan to Value needed. Credit remains tight.
The unadjusted index is now down from it's peak of 645 in July 2007
PREDICTION
House prices to continue falling with the Halifax index bottoming at £140,000 in Q4 2009.
In my opinion mortgage lending criteria has pretty much returned to normal even though lenders are still lending above average multipliers and mortgage rates have again returned to a longer term normal level.
The end of irresponsible lending means that lenders will never be returning to the days of lending with no deposit or waiving income checks.
House prices are still suspended about 20% above the level of finance that the banks are willing to give out.
Buy to let as one of the key drivers of house prices still does not makes economic sense at current rates. This sector will most likely never return to the heady days of 2007 as the age of irresponsible lending is over.
First time buyers are the main driver of the bottom of the housing market. First time buyers have rightly taken the view that it is best to wait out this drop before entering the market.
This gives a guide that house prices are around 32% over valued and that market sentiment pushes that to 41% over valued. DO NOT BUY
That is not to say that house prices will fall by either, but it gives an idea of the direction.
House prices have fallen this month which has reduced the index. Residential rates and buy to let rates have remained level for new borrowers despite rate cuts.
The price to average earnings ratio has also fallen this month and is still indicating house prices are 20% above trend on this indicator.
Many buy to let deals have been withdrawn this month as well as last month and those that remain have seen a lowering of the Loan to Value needed. Credit remains tight.
The unadjusted index is now down from it's peak of 645 in July 2007
PREDICTION
House prices to continue falling with the Halifax index bottoming at £140,000 in Q4 2009.
In my opinion mortgage lending criteria has pretty much returned to normal even though lenders are still lending above average multipliers and mortgage rates have again returned to a longer term normal level.
The end of irresponsible lending means that lenders will never be returning to the days of lending with no deposit or waiving income checks.
House prices are still suspended about 20% above the level of finance that the banks are willing to give out.
Buy to let as one of the key drivers of house prices still does not makes economic sense at current rates. This sector will most likely never return to the heady days of 2007 as the age of irresponsible lending is over.
First time buyers are the main driver of the bottom of the housing market. First time buyers have rightly taken the view that it is best to wait out this drop before entering the market.
Halifax data out for October 2008
Month on month house prices are down 2.2%. The Halifax report house prices down 13.7% annually, but they calculate this using this quarter against the quarter a year ago.
The true yearly drop is 14.6% on a seasonally adjusted basis. August 2007 average house price was £199,612 against £168,176 for October 2008. A drop of £31,436.
The last 12 months has seen the biggest falls ever from the Halifax. The previous biggest 12 month fall was in October 1992 of -8.5%
House prices have fallen 15.8% from the peak in August 2007 14 months ago. It took from May 1989 to July 1995 for house price to fall 13.21% that is 74 months and the bottom of the last housing slump.
This housing crash is now worse than the 89-95 housing crash and we have only just got going.
The last time house prices were at this level was October 2005 at £168,031.
Crown prediction is still house prices to continue falling with the Halifax index bottoming at £140,000 in Q4 2009. A fall of 30% or £59,600 from the peak in August 2007. That would be house prices returning to levels last seen in Q4 2003.
The true yearly drop is 14.6% on a seasonally adjusted basis. August 2007 average house price was £199,612 against £168,176 for October 2008. A drop of £31,436.
The last 12 months has seen the biggest falls ever from the Halifax. The previous biggest 12 month fall was in October 1992 of -8.5%
House prices have fallen 15.8% from the peak in August 2007 14 months ago. It took from May 1989 to July 1995 for house price to fall 13.21% that is 74 months and the bottom of the last housing slump.
This housing crash is now worse than the 89-95 housing crash and we have only just got going.
The last time house prices were at this level was October 2005 at £168,031.
Crown prediction is still house prices to continue falling with the Halifax index bottoming at £140,000 in Q4 2009. A fall of 30% or £59,600 from the peak in August 2007. That would be house prices returning to levels last seen in Q4 2003.
Wednesday, 5 November 2008
Factory production falls are as bad as in 1980
Factory production fell by 0.8% in August the seventh month in a row.
The last time factory production fell 7 straight months was in 1980 under Thatcher's recession. Gordon Brown was probably campaigning then against factory closures.
this time he can actually do something about it, but instead decides to put up the rate of tax that small business pay.
The last time factory production fell 7 straight months was in 1980 under Thatcher's recession. Gordon Brown was probably campaigning then against factory closures.
this time he can actually do something about it, but instead decides to put up the rate of tax that small business pay.
Tuesday, 4 November 2008
Ask the PM on the economy
Gordon is teasing us again with a request to ask him a question via video clip, we can then vote on which one he should answer and he will then answer whatever question he thinks should have been asked.
go to
http://uk.youtube.com/user/downingst?ob=4
click on the vote tab
favourites so far
stevex1969
guidofawkes
put the user name into the search for video box and click go
watch the clip - if you like it click on the thumbs up
go to
http://uk.youtube.com/user/downingst?ob=4
click on the vote tab
favourites so far
stevex1969
guidofawkes
put the user name into the search for video box and click go
watch the clip - if you like it click on the thumbs up
Thursday, 30 October 2008
Watch what they do, not what they say.(2)
Darling pledges business support
http://news.bbc.co.uk/1/hi/uk_politics/7699259.stm
Gordon Brown puts up small business corporation tax by 16% from 19% to 22%
http://www.guardian.co.uk/business/2007/mar/22/budget2007.politics5
W@nkers
http://news.bbc.co.uk/1/hi/uk_politics/7699259.stm
Gordon Brown puts up small business corporation tax by 16% from 19% to 22%
http://www.guardian.co.uk/business/2007/mar/22/budget2007.politics5
W@nkers
Nationwide October data out today
Nationwide have released their October data report today here.
The data shows a drop of 1.4% for the month with an annual change of -14.64%. House prices are now down from their peak in October 2007 of £186,044 by over £27,000 or -14.6%.
Good news for first time buyers looking to enter the market as house prices become more affordable. Not so good news for those who overstretched themselves and jumped on the property bandwagon in the last few years.
Dreadful news for all those property speculators who bought second and third properties. Tough. Serves them right for taking property off the market and forcing up prices for first time buyers. With almost 90% of buy to let mortgages being withdrawn from the market place and the government consulting on new landlord rules, now is not the time to be a property speculator.
Maybe Gordon Brown will now pay attention to speculative bubbles and act sooner to prevent them expanding rather than dithering around watching them BOOM and then BUST.
The data shows a drop of 1.4% for the month with an annual change of -14.64%. House prices are now down from their peak in October 2007 of £186,044 by over £27,000 or -14.6%.
Good news for first time buyers looking to enter the market as house prices become more affordable. Not so good news for those who overstretched themselves and jumped on the property bandwagon in the last few years.
Dreadful news for all those property speculators who bought second and third properties. Tough. Serves them right for taking property off the market and forcing up prices for first time buyers. With almost 90% of buy to let mortgages being withdrawn from the market place and the government consulting on new landlord rules, now is not the time to be a property speculator.
Maybe Gordon Brown will now pay attention to speculative bubbles and act sooner to prevent them expanding rather than dithering around watching them BOOM and then BUST.
Fionnuala Earley on SKY 30th October 2008
At last Fionnuala Earley from Nationwide has confirmed what I said back in April 2008 here.
She has drawn the 'Treating Customers Fairly' joker.
Lending has been restricted over the last year, but not because of a lack of credit to lend. It has been restricted because lenders are fearful of being hung out to dry under TCF. They have lent too much to borrowers and now that house prices are falling are trying to reign that back in.
Watch her here
This is what I said back in April
4 - TCF or Treating Customers Fairly. TCF is a key principle and a practice any business should follow. However in the last year the regulator has majored on this as part of it's principles based regime. Basically TCF can be used to say to any mortgage adviser or lender - 'You have not treated your customer fairly by allowing such borrowing. You should compensate your customer' all done with hindsight. TCF is basically a principle that can be used to solve any of the regulator's problems, when they get around to noticing the problems.
So the withdrawal of 100% mortgages and the tightening of credit criteria is not to do with the credit crunch, but more to do with TCF in a falling housing market. Lenders know that they have lent too much money on a falling asset without checking incomes and are fearful of being hung out to dry.
We have now got to a point where it does not matter how much money is put into the market, the credit tightening will not relax.
And let us not forget that most of the credit tightening is only tightening the relaxed credit conditions of the last 6 years.
She has drawn the 'Treating Customers Fairly' joker.
Lending has been restricted over the last year, but not because of a lack of credit to lend. It has been restricted because lenders are fearful of being hung out to dry under TCF. They have lent too much to borrowers and now that house prices are falling are trying to reign that back in.
Watch her here
This is what I said back in April
4 - TCF or Treating Customers Fairly. TCF is a key principle and a practice any business should follow. However in the last year the regulator has majored on this as part of it's principles based regime. Basically TCF can be used to say to any mortgage adviser or lender - 'You have not treated your customer fairly by allowing such borrowing. You should compensate your customer' all done with hindsight. TCF is basically a principle that can be used to solve any of the regulator's problems, when they get around to noticing the problems.
So the withdrawal of 100% mortgages and the tightening of credit criteria is not to do with the credit crunch, but more to do with TCF in a falling housing market. Lenders know that they have lent too much money on a falling asset without checking incomes and are fearful of being hung out to dry.
We have now got to a point where it does not matter how much money is put into the market, the credit tightening will not relax.
And let us not forget that most of the credit tightening is only tightening the relaxed credit conditions of the last 6 years.
Wednesday, 29 October 2008
Bank of England mortgage approvals October 2008.
New data out for September 2008 here.
The usual commentary really.
Mortgage approvals for house purchase were 33,000 for September 2008 compared to 101,000 in September 2007 down 67%.
These are 1000 higher than August 2008 and must now signify the bottom of the approvals for home purchase.
EDIT - actually having thought about it a bit more this approval figure was before the recent banking crisis. I don't know anybody or any client who is now considering buying. So I predict that approvals will bottom at 20,000 in January 2009 and quickly recover to 35000 ish by April 2009, before a recovery to 80000 by October 2009.
Just goes to show how reckless the lending was. Gordon Brown was not the only irresponsible one here. Lenders have now adopted their old lending practices which include such crazy rules like-
checking incomes (barking mad)
capping borrowing at 4 times income (crazy tightness)
requiring a deposit (whatever next)
wanting to know how you intend repaying the mortgage (who thought that one up!)
If Gordon Brown wants lenders to lend again maybe he should mark all property down by another 20% and we can get on with sensible lending (see the 4 points above) on sensibly priced property.
If you are a first time buyer, your time is coming. Keep saving for your 5% deposit, because these deals will return in the later part of 2009. House prices will be down another 15%, mortgage deals will be equivalent to rent and the housing market will start a steady climb from Q4 2009.
Good luck.
The usual commentary really.
Mortgage approvals for house purchase were 33,000 for September 2008 compared to 101,000 in September 2007 down 67%.
These are 1000 higher than August 2008 and must now signify the bottom of the approvals for home purchase.
EDIT - actually having thought about it a bit more this approval figure was before the recent banking crisis. I don't know anybody or any client who is now considering buying. So I predict that approvals will bottom at 20,000 in January 2009 and quickly recover to 35000 ish by April 2009, before a recovery to 80000 by October 2009.
Just goes to show how reckless the lending was. Gordon Brown was not the only irresponsible one here. Lenders have now adopted their old lending practices which include such crazy rules like-
checking incomes (barking mad)
capping borrowing at 4 times income (crazy tightness)
requiring a deposit (whatever next)
wanting to know how you intend repaying the mortgage (who thought that one up!)
If Gordon Brown wants lenders to lend again maybe he should mark all property down by another 20% and we can get on with sensible lending (see the 4 points above) on sensibly priced property.
If you are a first time buyer, your time is coming. Keep saving for your 5% deposit, because these deals will return in the later part of 2009. House prices will be down another 15%, mortgage deals will be equivalent to rent and the housing market will start a steady climb from Q4 2009.
Good luck.
Tuesday, 28 October 2008
Negative equity woes
There are reports today from the Bank of England that as many as 1.2 million homeowners face negative equity.
Having listened to SKY reporting this today, it is clear that SKY do not fully understand this.
SKY is reporting that negative equity is only a problem if you are trying to sell. This is not the case.
I'll use Abbey as an example of the problems of negative equity.
Let's say a borrower took out a fixed rate mortgage 2/3 years ago at around 5%. At the time the borrower put down a deposit of 5%.
Today your deal ends and Abbey look to put you on the Standard Variable rate of 7.09% an increase of almost 50% on your mortgage payments. If you are now in negative equity Abbey have no new deals for you and as you are in negative equity it is not possible to remortgage elsewhere.
So negative equity can cause problems even though the borrower may not be selling.
Having listened to SKY reporting this today, it is clear that SKY do not fully understand this.
SKY is reporting that negative equity is only a problem if you are trying to sell. This is not the case.
I'll use Abbey as an example of the problems of negative equity.
Let's say a borrower took out a fixed rate mortgage 2/3 years ago at around 5%. At the time the borrower put down a deposit of 5%.
Today your deal ends and Abbey look to put you on the Standard Variable rate of 7.09% an increase of almost 50% on your mortgage payments. If you are now in negative equity Abbey have no new deals for you and as you are in negative equity it is not possible to remortgage elsewhere.
So negative equity can cause problems even though the borrower may not be selling.
Land registry monthly data - October 2008
Latest data out today here showing another monthly fall of 2.2% with an annual fall of 8.0% now.
The graphs on page 12 show the full horror of house sales after a decade of Gordon Brown's debt binge.
To be honest this data is expected to show negative growth now as the data lags the Halifax and Nationwide data by between 3-6 months.
This data series will still be showing monthly falls 3 months or more after the Halifax starts publishing rising monthly prices again. that is not expected until Q4 2009.
1 year to go.
The graphs on page 12 show the full horror of house sales after a decade of Gordon Brown's debt binge.
To be honest this data is expected to show negative growth now as the data lags the Halifax and Nationwide data by between 3-6 months.
This data series will still be showing monthly falls 3 months or more after the Halifax starts publishing rising monthly prices again. that is not expected until Q4 2009.
1 year to go.
Monday, 27 October 2008
Gordon Brown campaigns in Glenrothes - well sort of
There are reports over the weekend that Gordon has braved the campaign trail in this decisive by-election.
You may remember that last week his wife went door knocking in a bid to boost the Labour vote, so it will come as no surprise that she has trumped him again.
It would appear that Gordon does not even have the bottle to knock on the doors of Labour voters so he has met voters as described in the Guardian article.
I still can't believe that he is our leader.
You may remember that last week his wife went door knocking in a bid to boost the Labour vote, so it will come as no surprise that she has trumped him again.
It would appear that Gordon does not even have the bottle to knock on the doors of Labour voters so he has met voters as described in the Guardian article.
The prime minister met six hand-picked Labour voters in a cafe owned by a party supporter next door to Labour's campaign headquarters in a tightly controlled encounter with voters ahead of the 6 November ballot.
I still can't believe that he is our leader.
Sunday, 26 October 2008
Gordon Brown joke
A driver is sat in a traffic jam on the motorway when another motorist comes down the queue and knocks on his window.
"What is the hold up" asks the driver
"Terrorists have captured Gordon Brown and Alastair Darling and are demanding a ransom of £10 million or they will douse them in petrol and set light to them. Some of the other motorists have suggested we start a collection, do you want to give?" comes the reply.
"How much are the others contributing?" asks the driver.
"About a gallon each" comes the reply.
"What is the hold up" asks the driver
"Terrorists have captured Gordon Brown and Alastair Darling and are demanding a ransom of £10 million or they will douse them in petrol and set light to them. Some of the other motorists have suggested we start a collection, do you want to give?" comes the reply.
"How much are the others contributing?" asks the driver.
"About a gallon each" comes the reply.
Friday, 24 October 2008
On the brink
Third quarter GDP is in today and shows a fall of 0.5%. The previous quarter was flat at 0%.
Technically a recession is 2 consecutive quarters of negative growth, so we are not in a technical recession yet.
Most people on the street know that we are in a downturn. It does not matter if it is called a recession or not.
What is not in doubt is that the fourth quarter will show another fall and a technical recession.
Technically a recession is 2 consecutive quarters of negative growth, so we are not in a technical recession yet.
Most people on the street know that we are in a downturn. It does not matter if it is called a recession or not.
What is not in doubt is that the fourth quarter will show another fall and a technical recession.
Thursday, 23 October 2008
Skinner vs Osbourne
In case you missed the electricity between these two - I hope you enjoy this clip!!
Wednesday, 22 October 2008
Yvette Cooper gets grilled by Andrew Neil on UK debt
I think this must be Yvette Cooper's worst interview yet. AN corners her on household debt and she has no escape other than to trot out her usual well worn phrases.
Now I know she is not going to answer the question and of course she doesn't, but I think the problem is that the government believe their own spin that debt is not a problem.
If the government do not realise that household debt is a problem, then there is no hope for them to be able to steer us out of this recession.
Watch it here
Now I know she is not going to answer the question and of course she doesn't, but I think the problem is that the government believe their own spin that debt is not a problem.
If the government do not realise that household debt is a problem, then there is no hope for them to be able to steer us out of this recession.
Watch it here
You have to admire the political skills of Brown and Mandelson
Mandelson as EU trade commissioner mixes with a Russian aluminium tycoon and subsequently EU aluminium tarrifs are reduced.
George Osbourne mixes with same tycoon and comes away with no donation, having asked for no donation apparently.
Yet today the press are camped outside George Osbourne's house wanting more clarification on whether he asked for a donation or not.
Gordon Brown leaves the UK with an enormous debt mountain, a plummeting pound and a recession, yet the BBC business editor Robert Peston asks more question on the Osbourne/Ruskie story.
How do they do it?
George Osbourne mixes with same tycoon and comes away with no donation, having asked for no donation apparently.
Yet today the press are camped outside George Osbourne's house wanting more clarification on whether he asked for a donation or not.
Gordon Brown leaves the UK with an enormous debt mountain, a plummeting pound and a recession, yet the BBC business editor Robert Peston asks more question on the Osbourne/Ruskie story.
How do they do it?
Tuesday, 21 October 2008
Gordon Brown Creates New Measure For Debt
reported here by Fraser Nelson, Gordon Brown has created a new measure for debt that hides the Northern Rock debt off balance sheet and allows him to claim he is still meeting his debt targets.
Are we surprised? Is there any figures that this PM will not fiddle?
Are we surprised? Is there any figures that this PM will not fiddle?
Monday, 20 October 2008
Can Gordon Brown end early election speculation?
Trevor Kavanagh writing in the SUN today stokes the new early election speculation further, much to the annoyance of those at Labour Home.
If Labour supporters are keen to kill off any unnecessary speculation they should have a word with their leader.
Here is a clip of Gordon being asked a question last week about an early election. Note his inability to answer even this most simple of questions and leaving the viewer in no doubt that he is considering an early election. (again) Note the welcome return of the 'I'm getting on with the job' reply.
If Labour supporters are keen to kill off any unnecessary speculation they should have a word with their leader.
Here is a clip of Gordon being asked a question last week about an early election. Note his inability to answer even this most simple of questions and leaving the viewer in no doubt that he is considering an early election. (again) Note the welcome return of the 'I'm getting on with the job' reply.
Homeowners to get support
The government have said that homeowners will get support to make sure they are not repossessed.
news.bbc.co.uk/1/hi/uk_politics/
A feeling of deja vu came over me as I started to write this post. Ah here it is a post from the 23rd April 2008 saying the same thing.
So maybe this is an announcement every 6 months that homeowners should be given support, not spelling the support out and leaving it there.
The government knows that if they do not allow lenders to repossess as per the terms and conditions of the mortgage account, then the lenders will increase the risk rating of the mortgage lending and reduce even further the acceptable number of borrowers for mortgage lending.
If the government wants to help, they should allocate money to allow the housing associations first refusal on repossessions and allow the homeowners to become tenants. At what cost? Does it really matter any more? The government is spending money from budgets years ahead and borrowing the rest.
After all the biggest repo bank is Gordon Brown's Northern Rock.
news.bbc.co.uk/1/hi/uk_politics/
A feeling of deja vu came over me as I started to write this post. Ah here it is a post from the 23rd April 2008 saying the same thing.
So maybe this is an announcement every 6 months that homeowners should be given support, not spelling the support out and leaving it there.
The government knows that if they do not allow lenders to repossess as per the terms and conditions of the mortgage account, then the lenders will increase the risk rating of the mortgage lending and reduce even further the acceptable number of borrowers for mortgage lending.
If the government wants to help, they should allocate money to allow the housing associations first refusal on repossessions and allow the homeowners to become tenants. At what cost? Does it really matter any more? The government is spending money from budgets years ahead and borrowing the rest.
After all the biggest repo bank is Gordon Brown's Northern Rock.
Thursday, 16 October 2008
Tuesday, 14 October 2008
Nationwide withdraw mortgage products
Nationwide have confirmed more credit tightening
Mortgage brokers - all products at 85% Loan to Value (LTV) or less
In branch or direct
First time buyers - maximum 90% LTV 2 deals available
Remortgage, homemovers - maximum 85% LTV
existing customers moving home - SVR at 95% LTV, 2 deals at 90% LTV
Must e-mail SKY to persuade them to ask Fionnuala Earley of Nationwide how this affects mortgage availability.
Mortgage brokers - all products at 85% Loan to Value (LTV) or less
In branch or direct
First time buyers - maximum 90% LTV 2 deals available
Remortgage, homemovers - maximum 85% LTV
existing customers moving home - SVR at 95% LTV, 2 deals at 90% LTV
Must e-mail SKY to persuade them to ask Fionnuala Earley of Nationwide how this affects mortgage availability.
Watch what they do, not what they say.
Last Wednesday the Bank of England cut the bank rate by 0.5% and Gordon Brown and Darling called on lenders to pass the rate cut on to borrowers.
Halifax, Woolwich, Lloyds TSB and Cheltenham & Gloucester all cut their Standard Variable Rate by the full 0.5% to 6.5%
What has Gordon Brown's Northern Rock done? Cut their Standard Variable Rate by a measly 0.19% to 7.34%. Almost a full percentage point higher than other lenders.
This will mostly affect those borrowers who are stuck with Northern Rock in negative equity, on the Standard Variable Rate and unable to remortgage away from them.
This government is all about putting out the right message and very rarely actually delivering.
Halifax, Woolwich, Lloyds TSB and Cheltenham & Gloucester all cut their Standard Variable Rate by the full 0.5% to 6.5%
What has Gordon Brown's Northern Rock done? Cut their Standard Variable Rate by a measly 0.19% to 7.34%. Almost a full percentage point higher than other lenders.
This will mostly affect those borrowers who are stuck with Northern Rock in negative equity, on the Standard Variable Rate and unable to remortgage away from them.
This government is all about putting out the right message and very rarely actually delivering.
Monday, 13 October 2008
Gordon Brown at his best will lead to his downfall
Gordon Brown is back to his best, striding confidently around the world stage his hand firmly on the steering wheel.
He is doing what he does best, taxing the country and spending the money. Although this time the money is being spent not on hospitals and schools but on banks.
Recapitalising the banks in this way has to work, it must work, the government will do all that is needed to make it work.
Let us assume that it does work. The Tories have jumped on board this train and can rightly claim to have supported Gordon Brown and his decisions to save the banking system.
Gordon will claim success, but so will the Tories. Experience was needed and we got that experience from both political sides. Unlike Northern Rock, Gordon will not be able to claim any political points.
So now that the banking crisis is solved and the dust settles we will see the true state of the UK economy compared to the rest of the world. Leaving America aside, we will compare badly.
We are the most indebted nation out there. I'm not talking about the government, however scary that is. The credit cards, personal loans and mortgage debt we have as a nation is huge. The taxpayer will not be able to spend the economy out of this mess.
All the time the global crisis is there, our true problems are hidden. Now that oil prices are back to year lows and assuming the banking crisis is resolved, Brown will not be able to hide amongst these global problems.
I have long thought that this whole Gordon Brown era was like the Emperor's new clothes. During the summer of 2008 the commentators started to realise he was naked, but have now had their heads turned again. It will not be long until we see the realisation again.
He is doing what he does best, taxing the country and spending the money. Although this time the money is being spent not on hospitals and schools but on banks.
Recapitalising the banks in this way has to work, it must work, the government will do all that is needed to make it work.
Let us assume that it does work. The Tories have jumped on board this train and can rightly claim to have supported Gordon Brown and his decisions to save the banking system.
Gordon will claim success, but so will the Tories. Experience was needed and we got that experience from both political sides. Unlike Northern Rock, Gordon will not be able to claim any political points.
So now that the banking crisis is solved and the dust settles we will see the true state of the UK economy compared to the rest of the world. Leaving America aside, we will compare badly.
We are the most indebted nation out there. I'm not talking about the government, however scary that is. The credit cards, personal loans and mortgage debt we have as a nation is huge. The taxpayer will not be able to spend the economy out of this mess.
All the time the global crisis is there, our true problems are hidden. Now that oil prices are back to year lows and assuming the banking crisis is resolved, Brown will not be able to hide amongst these global problems.
I have long thought that this whole Gordon Brown era was like the Emperor's new clothes. During the summer of 2008 the commentators started to realise he was naked, but have now had their heads turned again. It will not be long until we see the realisation again.
Sunday, 12 October 2008
48 hours until the government figures out the mortgage lending problem
In the press today there is speculation that the government will take stakes in various high street lenders in return for the lenders, lending to small business and house buyers.
Now I have blogged before on why mortgage lending is shot to pieces at the moment in this post, but to summarise
Gordon Brown presided over a mortgage industry that went from lending 3 times provable income with a 5% deposit to an industry that was lending 6 times income, not asking for proof of that income and lending 125% of the property value. A significant loosening of criteria. This pushed up property prices way above their true value.
With the FSA investigating, lenders have gone back to more sensible lending criteria.
The banks will take our tax payer money, the government will demand mortgage lending and the banks will say 'no problem - give us some borrowers with a 5% deposit and property at 4 times their provable income and we will lend'. Only then will the government figure out the problem.
Property prices are suspended at about 20% above where the lenders are lending, falling rapidly and will meet the demand later next year.
The government needs some ideas for how to help the property price and the finance meet quicker if it wants lending to resume sooner.
Now I have blogged before on why mortgage lending is shot to pieces at the moment in this post, but to summarise
Gordon Brown presided over a mortgage industry that went from lending 3 times provable income with a 5% deposit to an industry that was lending 6 times income, not asking for proof of that income and lending 125% of the property value. A significant loosening of criteria. This pushed up property prices way above their true value.
With the FSA investigating, lenders have gone back to more sensible lending criteria.
The banks will take our tax payer money, the government will demand mortgage lending and the banks will say 'no problem - give us some borrowers with a 5% deposit and property at 4 times their provable income and we will lend'. Only then will the government figure out the problem.
Property prices are suspended at about 20% above where the lenders are lending, falling rapidly and will meet the demand later next year.
The government needs some ideas for how to help the property price and the finance meet quicker if it wants lending to resume sooner.
Time to buy index for September 2008
In September the index stands at 361 unadjusted(U) and 457 adjusted(A)
This gives a guide that house prices are around 36% over valued and that market sentiment pushes that to 45% over valued. DO NOT BUY
That is not to say that house prices will fall by either, but it gives an idea of the direction.
House prices have fallen this month which initially reduced the index. But residential fixed rates increased and buy to let rates increased significantly, which pushed the index up for the first time since June 2008.
With many buy to let deals being withdrawn this month and those that remain seeing large increases to the rates, the demand for property from this market is dropping fast.
The unadjusted index is now down from it's peak of 645 in July 2007
PREDICTION
House prices to continue falling with the Halifax index bottoming at £140,000 in Q4 2009.
In my opinion mortgage lending criteria has pretty much returned to normal even though lenders are still lending above average multipliers and mortgage rates have again returned to a longer term normal level.
The ongoing financial crisis may lead to a collapse of the banking system and society as we know it. Assuming this does not happen, then lenders will never be returning to the days of lending with no deposit or income checks.
House prices are still suspended about 20% above the level of finance that the banks are willing to give out.
Buy to let as one of the key drivers of house prices still does not makes economic sense at current rates. This sector will most likely never return to the heady days of 2007 as the age of irresponsible lending is over.
This gives a guide that house prices are around 36% over valued and that market sentiment pushes that to 45% over valued. DO NOT BUY
That is not to say that house prices will fall by either, but it gives an idea of the direction.
House prices have fallen this month which initially reduced the index. But residential fixed rates increased and buy to let rates increased significantly, which pushed the index up for the first time since June 2008.
With many buy to let deals being withdrawn this month and those that remain seeing large increases to the rates, the demand for property from this market is dropping fast.
The unadjusted index is now down from it's peak of 645 in July 2007
PREDICTION
House prices to continue falling with the Halifax index bottoming at £140,000 in Q4 2009.
In my opinion mortgage lending criteria has pretty much returned to normal even though lenders are still lending above average multipliers and mortgage rates have again returned to a longer term normal level.
The ongoing financial crisis may lead to a collapse of the banking system and society as we know it. Assuming this does not happen, then lenders will never be returning to the days of lending with no deposit or income checks.
House prices are still suspended about 20% above the level of finance that the banks are willing to give out.
Buy to let as one of the key drivers of house prices still does not makes economic sense at current rates. This sector will most likely never return to the heady days of 2007 as the age of irresponsible lending is over.
Friday, 10 October 2008
Daily politics confirms Gordon Brown is psychologically flawed.
Today's Daily Politics was an absolute cracker with a psychologist describing Gordon Brown as deeply insecure and self harming by bringing Mandelson back.
watch the clip here
http://news.bbc.co.uk/1/hi/programmes/the_daily_politics/7663563.stm
Watch the stunned other guests as she describes him as a compulsive spender with money he does not have.
watch the clip here
http://news.bbc.co.uk/1/hi/programmes/the_daily_politics/7663563.stm
Watch the stunned other guests as she describes him as a compulsive spender with money he does not have.
Thursday, 9 October 2008
Why is Gordon Brown so happy at the moment?
Last night Gordon's speech is interrupted by a mobile phone ringing. At this time of national crisis, when investors are fearful of losing their life savings, Gordon thinks it is a good time for a joke.
What a disgrace.
Watch it here.
What a disgrace.
Watch it here.
Halifax data out for September 2008
Month on month house prices are down 1.3%. The Halifax report house prices down 12.4% annually, but they calculate this using this quarter against the quarter a year ago.
The true yearly drop is 13.2% on a seasonally adjusted basis. September 2007 average house price was £198,533 against £172,108 for September 2008. A drop of £26,425 in a year.
The last 12 months has seen the biggest falls ever from the Halifax. The previous biggest 12 month fall was in October 1992 of -8.5%
House prices have fallen 13.8% from the peak in August 2007 13 months ago. It took from May 1989 to July 1995 for house price to fall 13.21% that is 74 months and the bottom of the last housing slump.
This housing crash is now worse than the 89-95 housing crash and we have only just got going.
The last time house prices were at this level was February 2006 at £173,095.
Crown prediction is still house prices to continue falling with the Halifax index bottoming at £140,000 in Q4 2009. A fall of 30% or £59,600 from the peak in August 2007. That would be house prices returning to levels last seen in Q4 2003.
The true yearly drop is 13.2% on a seasonally adjusted basis. September 2007 average house price was £198,533 against £172,108 for September 2008. A drop of £26,425 in a year.
The last 12 months has seen the biggest falls ever from the Halifax. The previous biggest 12 month fall was in October 1992 of -8.5%
House prices have fallen 13.8% from the peak in August 2007 13 months ago. It took from May 1989 to July 1995 for house price to fall 13.21% that is 74 months and the bottom of the last housing slump.
This housing crash is now worse than the 89-95 housing crash and we have only just got going.
The last time house prices were at this level was February 2006 at £173,095.
Crown prediction is still house prices to continue falling with the Halifax index bottoming at £140,000 in Q4 2009. A fall of 30% or £59,600 from the peak in August 2007. That would be house prices returning to levels last seen in Q4 2003.
Wednesday, 8 October 2008
A shock 0.5% interest rate cut!
Well sort of a shock.
I was anticipating a 0.25% cut tomorrow and then another in November with several more next year.
The Australians cutting 1% this week made it seem more likely that we would get a 0.5% cut ourselves.
The cut gave the markets a temporary lift, before falling back again.
Hopefully the banks will not pass this on to savers, encouraging savers to help capitalise the banks.
What odds another 0.5% next month?
I was anticipating a 0.25% cut tomorrow and then another in November with several more next year.
The Australians cutting 1% this week made it seem more likely that we would get a 0.5% cut ourselves.
The cut gave the markets a temporary lift, before falling back again.
Hopefully the banks will not pass this on to savers, encouraging savers to help capitalise the banks.
What odds another 0.5% next month?
Joey Jones of SKY NEWS nails Gordon Brown
Watch the clip below. Joey nails Gordon Brown a beauty and as flustered as ever Gordon trips on his words and wants to create a better spanking system. Great!
Where has Gordon left us after 11 years?
Courtesy of the CIA have a look at the list of countries below with their current account balances listed.
China would be expected to be heading the list with their huge population and Iceland at number 157 are in difficulty.
Can you guess where Gordon Brown has left the UK after 11 years. I'll give you a clue, you have to scroll down a long, long, long way.
These figures are estimates from 2007, before Gordon bought all the banks.
China would be expected to be heading the list with their huge population and Iceland at number 157 are in difficulty.
Can you guess where Gordon Brown has left the UK after 11 years. I'll give you a clue, you have to scroll down a long, long, long way.
These figures are estimates from 2007, before Gordon bought all the banks.
| Rank | Country | Current account balance | Date of Information | |||||
| 1 | China | $ 371,800,000,000 | 2007 est. | |||||
| 2 | Germany | $ 254,500,000,000 | 2007 est. | |||||
| 3 | Japan | $ 210,500,000,000 | 2007 est. | |||||
| 4 | Saudi Arabia | $ 86,620,000,000 | 2007 est. | |||||
| 5 | Russia | $ 78,310,000,000 | 2007 est. | |||||
| 6 | Switzerland | $ 72,350,000,000 | 2007 est. | |||||
| 7 | Norway | $ 64,070,000,000 | 2007 est. | |||||
| 8 | Kuwait | $ 47,500,000,000 | 2007 est. | |||||
| 9 | Netherlands | $ 47,310,000,000 | 2007 est. | |||||
| 10 | Singapore | $ 46,390,000,000 | 2007 est. | |||||
| 11 | Sweden | $ 37,970,000,000 | 2007 est. | |||||
| 12 | United Arab Emirates | $ 34,530,000,000 | 2007 est. | |||||
| 13 | Taiwan | $ 32,880,000,000 | 2007 est. | |||||
| 14 | Algeria | $ 32,050,000,000 | 2007 est. | |||||
| 15 | Iran | $ 28,950,000,000 | 2007 est. | |||||
| 16 | Malaysia | $ 28,930,000,000 | 2007 est. | |||||
| 17 | Hong Kong | $ 28,040,000,000 | 2007 est. | |||||
| 18 | Libya | $ 26,380,000,000 | 2007 est. | |||||
| 19 | Venezuela | $ 20,000,000,000 | 2007 est. | |||||
| 20 | Thailand | $ 14,920,000,000 | 2007 est. | |||||
| 21 | Angola | $ 13,580,000,000 | 2007 est. | |||||
| 22 | Canada | $ 12,670,000,000 | 2007 est. | |||||
| 23 | Austria | $ 12,030,000,000 | 2007 est. | |||||
| 24 | Finland | $ 11,400,000,000 | 2007 est. | |||||
| 25 | Indonesia | $ 11,010,000,000 | 2007 est. | |||||
| 26 | Qatar | $ 10,410,000,000 | 2007 est. | |||||
| 27 | Azerbaijan | $ 9,019,000,000 | 2007 est. | |||||
| 28 | Argentina | $ 7,438,000,000 | 2007 est. | |||||
| 29 | Chile | $ 7,200,000,000 | 2007 est. | |||||
| 30 | Brunei | $ 7,101,000,000 | 2007 est. | |||||
| 31 | Philippines | $ 6,351,000,000 | 2007 est. | |||||
| 32 | Iraq | $ 6,025,000,000 | 2007 est. | |||||
| 33 | Korea, South | $ 5,954,000,000 | 2007 est. | |||||
| 34 | Trinidad and Tobago | $ 5,378,000,000 | 2007 est. | |||||
| 35 | Israel | $ 5,197,000,000 | 2007 est. | |||||
| 36 | Luxembourg | $ 4,921,000,000 | 2007 est. | |||||
| 37 | Oman | $ 4,866,000,000 | 2007 est. | |||||
| 38 | Uzbekistan | $ 4,615,000,000 | 2007 est. | |||||
| 39 | Denmark | $ 4,279,000,000 | 2007 est. | |||||
| 40 | Belgium | $ 3,282,000,000 | 2007 est. | |||||
| 41 | Bahrain | $ 2,907,000,000 | 2007 est. | |||||
| 42 | Nigeria | $ 2,514,000,000 | 2007 est. | |||||
| 43 | Botswana | $ 1,973,000,000 | 2007 est. | |||||
| 44 | Bolivia | $ 1,796,000,000 | 2007 est. | |||||
| 45 | Brazil | $ 1,712,000,000 | 2007 est. | |||||
| 46 | Turkmenistan | $ 1,705,000,000 | 2007 est. | |||||
| 47 | Gabon | $ 1,552,000,000 | 2007 est. | |||||
| 48 | Peru | $ 1,516,000,000 | 2007 est. | |||||
| 49 | Burma | $ 1,427,000,000 | 2007 est. | |||||
| 50 | Timor-Leste | $ 1,161,000,000 | 2007 est. | |||||
| 51 | Ecuador | $ 1,064,000,000 | 2007 est. | |||||
| 52 | Syria | $ 908,000,000 | 2007 est. | |||||
| 53 | Namibia | $ 805,200,000 | 2007 est. | |||||
| 54 | Bangladesh | $ 804,700,000 | 2007 est. | |||||
| 55 | Egypt | $ 500,900,000 | 2007 est. | |||||
| 56 | Equatorial Guinea | $ 415,000,000 | 2007 est. | |||||
| 57 | Cuba | $ 240,000,000 | 2007 est. | |||||
| 58 | British Virgin Islands | $ 134,300,000 | 1999 | |||||
| 59 | Papua New Guinea | $ 125,800,000 | 2007 est. | |||||
| 60 | Paraguay | $ 119,000,000 | 2007 est. | |||||
| 61 | Bhutan | $ 116,000,000 | 2007 est. | |||||
| 62 | Nepal | $ 58,000,000 | 2007 | |||||
| 63 | Lesotho | $ 49,000,000 | 2007 est. | |||||
| 64 | Cook Islands | $ 26,670,000 | 2005 | |||||
| 65 | Suriname | $ 24,000,000 | 2007 est. | |||||
| 66 | Palau | $ 15,090,000 | FY03/04 | |||||
| 67 | Comoros | $ 8,000,000 | 2007 est. | |||||
| 68 | Guinea-Bissau | $ -6,000,000 | 2007 est. | |||||
| 69 | Tuvalu | $ -11,680,000 | 2003 | |||||
| 70 | Kiribati | $ -21,000,000 | 2007 est. | |||||
| 71 | Mongolia | $ -23,000,000 | 2007 est. | |||||
| 72 | Tonga | $ -23,000,000 | 2007 est. | |||||
| 73 | Samoa | $ -24,000,000 | 2007 est. | |||||
| 74 | Swaziland | $ -24,000,000 | 2007 est. | |||||
| 75 | Micronesia, Federated States of | $ -34,300,000 | FY05 est. | |||||
| 76 | Anguilla | $ -42,870,000 | 2003 est. | |||||
| 77 | Belize | $ -43,000,000 | 2007 est. | |||||
| 78 | Sao Tome and Principe | $ -55,000,000 | 2007 est. | |||||
| 79 | Kosovo | $ -58,300,000 | 2007 | |||||
| 80 | Vanuatu | $ -60,000,000 | 2007 est. | |||||
| 81 | Sierra Leone | $ -63,000,000 | 2007 est. | |||||
| 82 | Gambia, The | $ -71,000,000 | 2007 est. | |||||
| 83 | Dominica | $ -72,000,000 | 2007 est. | |||||
| 84 | Central African Republic | $ -77,000,000 | 2007 est. | |||||
| 85 | Burundi | $ -101,000,000 | 2007 est. | |||||
| 86 | Cape Verde | $ -132,600,000 | 2007 est. | |||||
| 87 | Grenada | $ -138,000,000 | 2007 est. | |||||
| 88 | Solomon Islands | $ -143,000,000 | 2007 est. | |||||
| 89 | Cote d'Ivoire | $ -146,000,000 | 2007 est. | |||||
| 90 | Rwanda | $ -147,000,000 | 2007 est. | |||||
| 91 | Saint Vincent and the Grenadines | $ -149,000,000 | 2007 est. | |||||
| 92 | Guyana | $ -157,000,000 | 2007 est. | |||||
| 93 | Togo | $ -159,000,000 | 2007 est. | |||||
| 94 | Saint Kitts and Nevis | $ -163,000,000 | 2007 est. | |||||
| 95 | Chad | $ -171,000,000 | 2007 est. | |||||
| 96 | Mauritania | $ -184,000,000 | 2007 est. | |||||
| 97 | Uruguay | $ -185,600,000 | 2007 est. | |||||
| 98 | Saint Lucia | $ -199,000,000 | 2007 est. | |||||
| 99 | Eritrea | $ -205,000,000 | 2007 est. | |||||
| 100 | Antigua and Barbuda | $ -211,000,000 | 2007 est. | |||||
| 101 | Djibouti | $ -212,000,000 | 2007 est. | |||||
| 102 | Liberia | $ -224,000,000 | 2007 | |||||
| 103 | Zambia | $ -228,000,000 | 2007 est. | |||||
| 104 | Macedonia | $ -249,000,000 | 2007 est. | |||||
| 105 | Barbados | $ -254,000,000 | 2007 est. | |||||
| 106 | Kyrgyzstan | $ -267,900,000 | 2007 est. | |||||
| 107 | Seychelles | $ -272,000,000 | 2007 est. | |||||
| 108 | Laos | $ -285,000,000 | 2007 est. | |||||
| 109 | Malawi | $ -318,000,000 | 2007 est. | |||||
| 110 | Niger | $ -321,000,000 | 2007 est. | |||||
| 111 | Cameroon | $ -325,000,000 | 2007 est. | |||||
| 112 | Tajikistan | $ -351,000,000 | 2007 est. | |||||
| 113 | Yemen | $ -362,000,000 | 2007 est. | |||||
| 114 | Congo, Democratic Republic of the | $ -402,000,000 | 2007 est. | |||||
| 115 | Mauritius | $ -408,300,000 | 2007 est. | |||||
| 116 | Guinea | $ -424,000,000 | 2007 est. | |||||
| 117 | Malta | $ -424,500,000 | 2007 est. | |||||
| 118 | Benin | $ -441,000,000 | 2007 est. | |||||
| 119 | Mali | $ -446,000,000 | 2007 est. | |||||
| 120 | Haiti | $ -467,000,000 | 2007 est. | |||||
| 121 | Maldives | $ -472,000,000 | 2007 | |||||
| 122 | Cambodia | $ -506,300,000 | 2007 est. | |||||
| 123 | Fiji | $ -507,000,000 | 2007 est. | |||||
| 124 | Armenia | $ -571,400,000 | 2007 est. | |||||
| 125 | Zimbabwe | $ -649,000,000 | 2007 est. | |||||
| 126 | Moldova | $ -694,700,000 | 2007 est. | |||||
| 127 | Burkina Faso | $ -706,000,000 | 2007 est. | |||||
| 128 | Uganda | $ -744,700,000 | 2007 est. | |||||
| 129 | Mozambique | $ -795,100,000 | 2007 est. | |||||
| 130 | Ethiopia | $ -826,800,000 | 2007 est. | |||||
| 131 | Madagascar | $ -890,000,000 | 2007 est. | |||||
| 132 | Tunisia | $ -905,000,000 | 2007 est. | |||||
| 133 | Nicaragua | $ -1,001,000,000 | 2007 est. | |||||
| 134 | Sri Lanka | $ -1,019,000,000 | 2007 est. | |||||
| 135 | El Salvador | $ -1,119,000,000 | 2007 est. | |||||
| 136 | Kenya | $ -1,147,000,000 | 2007 est. | |||||
| 137 | Albania | $ -1,202,000,000 | 2007 est. | |||||
| 138 | Honduras | $ -1,225,000,000 | 2007 est. | |||||
| 139 | Bahamas, The | $ -1,442,000,000 | 2007 est. | |||||
| 140 | Senegal | $ -1,458,000,000 | 2007 est. | |||||
| 141 | Congo, Republic of the | $ -1,491,000,000 | 2007 est. | |||||
| 142 | Costa Rica | $ -1,499,000,000 | 2007 est. | |||||
| 143 | Ghana | $ -1,549,000,000 | 2007 est. | |||||
| 144 | Panama | $ -1,577,000,000 | 2007 est. | |||||
| 145 | Guatemala | $ -1,663,000,000 | 2007 est. | |||||
| 146 | Jamaica | $ -1,830,000,000 | 2007 est. | |||||
| 147 | Morocco | $ -1,834,000,000 | 2007 est. | |||||
| 148 | Tanzania | $ -1,856,000,000 | 2007 est. | |||||
| 149 | Bosnia and Herzegovina | $ -1,939,000,000 | 2007 est. | |||||
| 150 | Georgia | $ -2,044,000,000 | 2007 est. | |||||
| 151 | Lebanon | $ -2,046,000,000 | 2007 est. | |||||
| 152 | Cyprus | $ -2,144,000,000 | 2007 est. | |||||
| 153 | Slovenia | $ -2,181,000,000 | 2007 est. | |||||
| 154 | Dominican Republic | $ -2,231,000,000 | 2007 est. | |||||
| 155 | Jordan | $ -2,767,000,000 | 2007 est. | |||||
| 156 | Belarus | $ -2,876,000,000 | 2007 est. | |||||
| 157 | Iceland | $ -3,189,000,000 | 2007 est. | |||||
| 158 | Sudan | $ -3,447,000,000 | 2007 est. | |||||
| 159 | Estonia | $ -3,771,000,000 | 2007 est. | |||||
| 160 | Slovakia | $ -3,998,000,000 | 2007 est. | |||||
| 161 | Czech Republic | $ -4,534,000,000 | 2007 est. | |||||
| 162 | Croatia | $ -4,850,000,000 | 2007 est. | |||||
| 163 | Lithuania | $ -5,260,000,000 | 2007 est. | |||||
| 164 | Mexico | $ -5,525,000,000 | 2007 est. | |||||
| 165 | Colombia | $ -5,862,000,000 | 2007 est. | |||||
| 166 | Ukraine | $ -5,918,000,000 | 2007 est. | |||||
| 167 | Latvia | $ -6,231,000,000 | 2007 est. | |||||
| 168 | Serbia | $ -6,889,000,000 | 2007 est. | |||||
| 169 | Vietnam | $ -6,993,000,000 | 2007 est. | |||||
| 170 | Kazakhstan | $ -7,184,000,000 | 2007 est. | |||||
| 171 | Hungary | $ -8,018,000,000 | 2007 est. | |||||
| 172 | Pakistan | $ -8,255,000,000 | 2007 est. | |||||
| 173 | Bulgaria | $ -8,530,000,000 | 2007 est. | |||||
| 174 | New Zealand | $ -10,230,000,000 | 2007 est. | |||||
| 175 | India | $ -12,110,000,000 | 2007 est. | |||||
| 176 | Ireland | $ -14,120,000,000 | 2007 est. | |||||
| 177 | Poland | $ -15,910,000,000 | 2007 est. | |||||
| 178 | South Africa | $ -20,630,000,000 | 2007 est. | |||||
| 179 | Portugal | $ -21,750,000,000 | 2007 est. | |||||
| 180 | Romania | $ -23,020,000,000 | 2007 est. | |||||
| 181 | France | $ -31,250,000,000 | 2007 est. | |||||
| 182 | Turkey | $ -37,580,000,000 | 2007 est. | |||||
| 183 | Greece | $ -44,400,000,000 | 2007 est. | |||||
| 184 | Italy | $ -51,030,000,000 | 2007 est. | |||||
| 185 | Australia | $ -56,780,000,000 | 2007 est. | |||||
| 186 | United Kingdom | $ -119,200,000,000 | 2007 est. | |||||
| 187 | Spain | $ -145,300,000,000 | 2007 est. | |||||
| 188 | United States | $ -731,200,000,000 | 2007 est. |
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