Monday, 30 March 2009

Bank of England mortgage approvals March 2009

New data out for February 2009 here.

Mortgage approvals for house purchase were 37,937 for February 2009 compared to 67,000 in February 2008 and 116,000 in February 2007.

These have been bumping along a range around 30,000 since June 2008 which signified the bottom of the approvals for home purchase. There has been a jump up this month which is a move towards the 80,000 monthly transactions that is widely assumed to be needed for a normal healthy housing market.

A healthy market tends to have approvals in the range 80,000 - 100,000 averaged over the year, so we are currently around a third of the transactions.

I expect these approvals to move upwards now until February 2010, when I expect the approvals to be around 80,000 a month and a normal, healthy housing market to be restored.

As the housing market continues to fall, house prices will continue to become more affordable. I still stand by my prediction for the market to bottom in Q4 2009 although my £140,000 bottom (Halifax data) is looking like it might be challenged.

Sunday, 29 March 2009

Taxpayer pays for Home Secretary's porn

And I thought it could not get any funnier. Sky are reporting that Jaqui Smith has been claiming for the porn that her husband has been viewing.

Apparently while JS has been staying at her main residence (the room at her sister's house), her husband has been pulling himself off over adult films at her second home (where her kids go to school).

The bill has been charged to the taxpayer 'by accident'

Saturday, 28 March 2009

Can Gordon Brown embarrass us anymore?

Sky report that the photo opp with Gordon Brown's South American chums was delayed because he was having a dump.

Can we sink any lower?

Dunfermline Building Society collapses

Scotland's largest building society is to be broken up and sold. The BBC reports here.

Savers will be protected so no panic is expected.

Isn't this based in Gordon's back yard?


Oh dear. Looks like the BOE might be starting to see the error of their ways.

Friday, 27 March 2009

Brown gets lectured in Chile

Too funny for words, so I'll link to the Spectator Blog.

Gordon Brown gets lectured by a South American country on fiscal prudence.

Love it!!

Thursday, 26 March 2009

Guido Fawkes AKA Paul Staines vs Derek 'the Dark One' Draper

Highlights - Staines and his Berkeley shirt, Neil and his 'shut up' to Draper, Draper and his nonsense.

Watch Round 1 below

Round 2

Wednesday, 25 March 2009

The failure of today's Gilt Auction suggests Mervyn is right.

The Latest Gilt auction has failed today. This suggest Mervyn King was right about the scale of our problems.

This does not bode well for Gordon Brown's future debt raising strategy.

There is a buyback this afternoon - we'll see what happens then.




Another great Daily Mash offering

BRITAIN has run out of money, the man who prints it said last night.

Bank of England governor Mervyn King urged everyone to take his word for it and that if they didn't believe him he could show them the big room where he keeps it all.

Mr King's comments have put him on a collision course with prime minister Gordon Brown who last night insisted the Great Money Forest of Hampshire would soon be in bloom, promising a bumper harvest of ripe, crisp tenners.

But Mr King told a committee of MPs yesterday: "If anyone is still inclined to agree with the prime minister's magical Hampshire forest theory, I would advise you to open your wallet, get out a ten pound note and read it.

"You will notice that across the top, in large, capital letters, it says 'Bank of England'. Well, I'm the boss of that.

"And if I can draw your attention to the bottom left hand corner, you will see that it's signed by someone called the 'Chief Cashier'. That's right, you've guessed it, he works for me.

"If you then turn it over you will see there is also a portrait of the eminent scientist Charles Darwin, who, if he was alive today, would undoubtedly agree with my assessment, what with him not being a complete bloody idiot."

Mr King added: "I might be persuaded to print a little bit more money later in the year so that RBS can give Sir Fred Goodwin enough cash to finally buy his own volcano, but that is absolutely it."

A Downing Street spokesman said: "Everyone in the world agrees with the prime minister that we need to keep spending loads more money - except the Conservatives. And the Bank of England. And the CBI. And the French and the Germans and the European Central bank. Look just fuck off, alright?"

The darkness is coming

The Oracle spoke.

The darkness is coming.

The rule of law has broken down.

Gordon Brown's plan is almost complete.

Tuesday, 24 March 2009

Watch the devalued Gordon Brown get both barrels

Daniel Hannan gives Gordon Brown both barrels in the European Parliament.

Well said.

Inflation crisis - Brown creates the perfect storm

With the experts predicted inflation would be plummeting at this stage. The same experts that got us into this mess. Gordon Brown, the BOE, the FSA they all said that deflation would be a problem.

Deflation may well be a problem in the future, but cutting rates so low so quickly never gave the rate cuts a chance to work, before clobbering all the savers.

I blogged on the inflation rate last week here. I would not be surprised if inflation was still above target in the months to come, the currency being weakened and interest rates being increased.

The crisis in the UK

Inflation is rising, Interest rates are rock bottom, the BOE is printing money, jobs are being cut, the government is incompetent, confidence has been lost in the city, the UK is being turned into a police state.

If Gordon Brown is the answer, what is the question?

Monday, 23 March 2009

Diane Abbott - a lesson in left wing snobbery

Diane Abbott appearing on This Week with Jodie Marsh displays her usual snobbish behaviour towards the women guests.

I think she's great though.

Watch the clip here

Sunday, 22 March 2009

McNulty taking the piss out of us now.

FFS McNulty claiming a second home allowance for living with his mum and dad! At his age? He's more and more like Tory boy everyday.

Friday, 20 March 2009

Stop Press - Another government failure

.Reports today that Northern Rock continued to lend their risky mortgages after Gordon Brown bought it on our behalf.

He installed the non-dom Sandler as the new boss and stood back and ignored the lending practices that got the Rock into this mess.

It really does wind me up that our government cannot sort out mess. They just nationalise the mess so that it is the taxpayer's problem and they look so shocked and outraged when they discover months later what has been going on.

Gordon Brown and his bunch of muppets are some of the only people in the country who are in a position to sort out the mess, yet all they do is throw our money at the problem.

Roll on June 2010

Thursday, 19 March 2009

Wednesday, 18 March 2009

Day of Reckoning for the mortgage market is postponed

Decision postponed until Q3 apparently. That should give time for house prices to fall down to the level required.

Day of Reckoning for the mortgage market

Today is the day when some bloke called Turner who lunches at the FSA announces new proposals for rules governing banks.

Much discussed is the rumour that a cap on mortgage lending to individuals is to be introduced. A cap of 3 times being applied to income and a maximum 95% LTV.

If this is true I will also post on how the mortgage lenders intend to get around the new rules.

More here later.

Tuesday, 17 March 2009

Is Gordon implementing the 1983 manifesto?

With the news today that our great leader is pushing for nuclear disarmament it seems that he is keen to implement the 1983 manifesto rather than the 2005 one.

I can't be bothered to dig my way through the 1983 manifesto but creating a national bank was in there. He is doing that by nationalising all our banks one by one at the moment.

Moving towards a world free of nuclear weapons was in there. That is what he is hoping for in today's speech.

In contrast he has broken his 2005 pledge on the economy and denied us a vote on the Lisbon treaty.

Now what else was in that 1983 manifesto.

New Labour currency slang

£100 = a Ton
£1000 = a Grand
£50 billion = a Rock
£250 billion = an RBS
£1 Trillion = a Gordon

Can it go any higher?


Another great Daily Mash here. As always it ends on the best line.

GORDON Brown today apologised for not being even more intelligent than he so obviously is.

The prime minister said that while he had been amazingly clever and much cleverer than anyone else, he could have prevented the financial crisis by being even cleverer than that.

Mr Brown told the Guardian: "I'm so clever I know what you're going to say even before you say it. I'm so clever I can read two books at the same time. The one in the toilet and the one next to my bed.

"But if only I had been clever enough to realise that capitalism involves some risk and that maybe something could be done to minimise that risk such as rules that stopped banks from lending money to people who couldn't afford to pay it back.

"But that would have taken a super-human degree of intelligence. Not even ET or one of those big, scary computers that can play chess could have worked that one out."

The prime minister also said the era of laissez faire capitalism was over but insisted it would not be replaced by so-called 'big government', adding: "I don't know what we'll actually call it. Maybe 'fat government', or 'chunky government'.

"My personal favourite is 'so-powerful-you-won't-be-able-to-go-for-a-piss-without-my-permission government."

Mr Brown's critics are now expected to spend the next two weeks debating whether an apology for not being even cleverer amounts to an actual apology.

Psychologist Dr Tom Logan, said: "I'm afraid this is closest you're going to get to an apology from someone who is now clearly in need of immediate hospitalisation."

Has the FSA ever been ahead of the game?

Pension mis-selling.
Millions were advised to either transfer their company pensions to persoanl pensions or advised not to join their company pensions, opting instead for a personal pension. Went on for about 10 years before the regulator (The PIA at the time I think) acted.

Endowment mis-selling
Taking an endowment policy to repay a mortgage and the adviser not explaining that there was a risk the maturity would not be sufficient to repay the mortgage. Went on for about 15 years before the FSA acted.

Split cap investments
These risky investments were branded as safe by companies with the FSA approval. Went on for around 5 years before the FSA acted.

Northern Rock
Approved Northern Rock's business plan shortly before the company failed, causing the first run on a bank in 150 years.

General banking markets
FSA looked the other way as UK banks took on liabilities greater than the economy before near collapsing and bringing down the UK economy.

Mortgages - split into 3 sections

Over lending
Borrowing more than 3 times your income in some cases up to 6 times your income. Allowed house prices to soar out of control. Went on for 9 years. Apparently FSA is acting now.

Liar Loans and SELF CERT
Borrowers encouraged to inflate their income to obtain a larger loan than would otherwise be available. Lenders do not check the income and encourage mortgage brokers to falsify the income to get business. Despite being warned in 2003 they have still not acted.

No mortgage repayment plan
Borrowers only pay the interest on the mortgage to make it more affordable and have no way of repaying the mortgage. FSA has not acted.

The FSA seems to follow the rule that says - let the problem raise it's head, let the problem develop, let the problem grow, announce a review and fine the providers and partially compensate those losing out. Unless it is the banks of course, then they get £1 trillion for their trouble.

Any other examples?

Upcoming change to my house price target

I am giving advance warning of a change to my expectations for the bottom of the housing market.

It is being reported that the FSA are going to impose a cap of 3 times income as an affordable loan. I happen to agree with them, but this should have been implemented before the housing boom.

Actually I don't agree with them! I agree that lending should be in the region of 3 times income, but I don't think legislation should be introduced to make it so.

Anyway I have had a target for the bottom of the housing slump of £140,000 average house price according to Halifax in Q4 2009 for several years now. I have based this timescale and figure on various factors, but one of them was a return to lending of 4 times joint income.

This 4 times figure was still higher than the 2.5 times figure used pre Gordon Brown 'debt is good' mantra, but higher than the suggested figure of 3 times.

This 3 times multiplier would have the effect of reducing my target from £140,000 to £100,000 and the bottom of the market would slightly move to Q1 2010.

I was leaning towards a Q1 bottom before this news but this makes it 100% clear.

So to clarify - if new lending is restricted to 3 times income, then my target for the bottom of the housing market is £100,000 in Q1 2010 according to the Halifax figures.

Saying sorry Gordon Brown style (2)

Can't figure out if Gordon Brown's comments this morning are an apology or an excuse.

It's like kind of like Rio Ferdinand scoring 3 own goals and the in the post match interview the interviewer asks

"Are you going to say sorry for those 3 mistakes"

and Rio says

"I wish the rest of the team had defended better and I wish I had scored another 4 goals at the other end"

first post here

Saying sorry Gordon Brown style

I see Gordon Brown is up to his usual tricks with this mealy mouth comment.

"I take full responsibility for all my actions, but I think we're dealing with a bigger problem that is global in nature, as well as national," he said.

"Perhaps 10 years ago after the Asian crisis when other countries thought these problems would go away, we should have been tougher... keeping and forcing these issues on to the agenda like we did on debt relief and other issues of international policy."

His words demonstrate his total lack of understanding of what has gone on.

Firstly this is no apology for his role in the crisis, this is a wish he had done more years ago.

He does not appreciate that his regulations were the cause of the problem as they allowed financial institutions to bend the rules as there was no financial teeth to those regulations.

He thinks his regulations were OK but the global crisis developed because there were no global regulations.

If he cannot recognise or apologise for past mistakes, how can he possibly find the way out of this mess.

Think for a minute - the root cause of the crisis was the availability of cheap credit and the ability by individuals, companies and the government to load up on this debt. The banks have now seen sense and restricted this access to debt. Gordon's solutions to the crisis is to force the banks to unload more debt on to everybody.

So too much debt got us into the crisis and more debt will get us out?

Expect another year of this crisis before market confidence returns with the end of this failed Labour government.

Monday, 16 March 2009

My thoughts on pre-election polling

There have been several articles today on the possibility of a poll boost for the Government during an election campaign. has this and polling report has this.

As far as I can tell the data seems to suggest that Labour lose around 10 points during an election campaign. There is no boost for a governing party, just a boost for the Tories.

Check out the 2 websites mentioned for that data.

Sunday, 15 March 2009

Regime change is needed in the UK

Why does our current regime of the FSA, the BOE and the Labour Government think that they are the right people to get us out of this mess?

These are the 3 bodies who missed all of the warning signals in the run up to the financial crisis.

If they were in Alan Sugar's boardroom they would all be fired. Except for the fact that Sugar is in Labour's backpocket, but I digress.

Some bright spark thinks that deflation is stalking us and they must do 'all that it takes' to save us.

But wait for a moment.

CPI is still way above target. Sterling is weak - that is inflationary. Interest rates are 0.5% - that is inflationary.

So who did decide that it would be a good idea to start printing money? When most economists think that an interest rate cut takes a year to factor into the economy, why have we not waited?

QE or printing money is hugely inflationary. What odds that we will be sitting here in a year from now and discussing how the authorities missed the inflationary bubble they were creating. I bet they will still be saying that they are the best bunch to get us out of the new mess.

Are we not rushing full speed to catch the deflation rabbit, when the inflation precipice is in front of us. Is there any harm in slowing down a bit and figuring out why our banks will not lend.

Are the banks not lending because the banks have decided that they should be a little more thorough in their checking of who gets what money? Have they not decided that a provable income might be better than a made up income on a mortgage application? That 3 times your joint income is better than 6 times your joint income?

I fear that in his rush to get banks lending again Gordon Brown has missed the reason they have stopped lending and stoked up an inflation disaster for next year.

Saturday, 14 March 2009

Gordon Brown and Greenspan still don't get it

I read that Greenspan has been trying to cover his tracks in the same way that GB has tried.

Greenspan blags

There are at least two broad and competing explanations of the origins of this crisis. The first is that the "easy money" policies of the Federal Reserve produced the U.S. housing bubble that is at the core of today's financial mess.

The second, and far more credible, explanation agrees that it was indeed lower interest rates that spawned the speculative euphoria. However, the interest rate that mattered was not the federal-funds rate, but the rate on long-term, fixed-rate mortgages.

OK here we go again. Cheap money led to mortgages becoming more affordable. It does not matter how the cheap money came about, what matters is what decisions were taken to enable borrowers to borrow this cheap money.

During the housing boom, the financial regulations let the cheap money be lent to borrowers who had no provable income, no deposit, no way of repaying it. This happened in the US and it happened in the UK.

This meant that borrowers could borrow much greater multiples of their 'income' and push up the housing asset.

Now we have a situation where we have cheap money again, but the lenders are applying stricter criteria on who can borrow the money. This leads to a low level of borrowing, until house prices fall to within the income multiples or the borrower has saved the larger deposit.

To summarise

Financial regulations that ensure lenders are doing some sort of due diligence on how much is being borrowed will keep a lid on any housing asset bubble.

We do not need new tougher regulation, we just need regulation that works.

Friday, 13 March 2009

Gordon Brown says we should take exception to his bank bailouts

Speaking back in October Gordon Brown says that people would take exception 3 partial proposals for bank restructuring.

There have now been 3 attempts by Gordon and his band of merry muppets to restructure the banks and we are no further forward.

By restructuring the banks he means throwing our tax payer money at them and hoping that some will stick.

Watch our great leader here

Thursday, 12 March 2009

Gordon Brown's Sorry

A quick slide show of how Brown's Sorry should look.

Friday, 6 March 2009

Gordon Brown addresses Congress - mashup

A quick mashup of GB's Congress speech - what he should have said or what he says here when the Yanks are not listening

Mandy gets guacamoled

watch it here

Thursday, 5 March 2009

BOE decision

Cutting rates by 0.5% to 0.5%

£75 billion quantitative easing (buying assets or printing money-think Zimbabwe)

Analysts say - will have no effect

Time to buy index for February 2009

In January the index stands at 228 unadjusted(U) and 319 adjusted(A)

This gives a guide that house prices are around 22% over valued and that market sentiment pushes that to 31% 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.

Some weird data last month from Halifax did turn out to be a rogue month. Halifax are back with the trend now with a -2.3% fall.

Even though house prices have fallen this month, there was a big rise in the rate data I use to determine affordability. The rate rise has a bigger impact than the price falls and so the index has risen again this month making house prices less affordable.

Although Bank of England rates have fallen, new mortgage deals are being priced at pre-cut levels.

The price to average earnings ratio has also fallen slightly this month and is still indicating house prices are 10% above trend on this indicator.

Most buy to let deals have been withdrawn now and those that remain have seen a lowering of the Loan to Value needed. There exists only one 95% LTV first time buyer deal in the market and this requires a charge on the parents house, so a 90% LTV is the best on offer. Credit remains tight.

The unadjusted index is now down from it's peak of 645 in July 2007


House prices to continue falling with the Halifax index bottoming at £140,000 in Q4 2009.

In my opinion mortgage lending criteria has tightened more than usual with a larger deposit required than in the past, however lenders are still lending above average multipliers and mortgage rates have again fallen to below the 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. Interestingly the £xx billions in extra lending that RBS and Northern Rock have blagged to Gordon Brown is a total farce. The lenders have the money to lend but are applying their new stricter criteria to borrowers. The money will not be lent out any time soon, because many borrowers do not meet the criteria.

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.

Daily Mash - Another superb scoop

The Daily Mash has this

GORDON Brown yesterday told America that someone has been going around blaming them for the global economic collapse and using his name.

'Who the fuck is this guy?'In a keynote speech to the US Congress Mr Brown said he was 'shocked, shocked I tell you' to discover that a man claiming to be the British prime minister has used every possible opportunity over the last 12 months to lay the blame squarely at America's door.

The prime minister said: "He goes on television and says 'the economic crisis originated in America and then spread across the globe'. That's his catchphrase. But get this, right, the caption at the bottom of the screen says 'Gordon Brown, Prime Minister'.

"And I'm just sitting there watching it, thinking 'bloody cheek!'. And then I go into the office and everyone's saying 'good interview, prime minister' and I'm like, 'for fuck's sake, it wasn't me, okay?'.

"Granted, he does look a bit like me and the voice isn't bad, but the way you can spot the difference is that horrible, creepy smile. I don't smile like that. Look."

To a standing ovation Mr Brown added: "I like you. No, I mean I really like you. A lot.

"Sometimes I think about the two of us having dinner and we talk about all the stuff we have in common and then we move over to the sofa and I run my hand up the inside of your thigh and our eyes meet and we lean into each other and then all of a sudden we're just doing it.

"I need you. I need your hot breath on my neck. I want to lick every inch of you. I want to feel your urgent hands investing in my naked, heaving buttocks.

"And I want to video it."

Halifax data out for February 2009

Back to normal this month because Halifax have house prices falling by 2.3%!! No more fudging then.

They report house prices down 17.7% annually, but they calculate this using this quarter against the quarter a year ago.

The true yearly drop is 17.8% on a seasonally adjusted basis. House prices peaked in August 2007 at £199,612 against £160,327 for February 2009. A drop of £39,285.

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 19.7% from the peak in August 2007 18 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 are probably half way through now.

The last time house prices were at this level was July 2004.

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.

Monday, 2 March 2009

Downing street website spoof


Click image to enlarge

Bank of England mortgage approvals February 2009

New data out for January 2009 here.

The usual commentary really.

Mortgage approvals for house purchase were 31,000 for January 2009 compared to 70,000 in January 2008 and 119,000 in January 2007.

These are now bumping along a range around 30,000 and have been since June and must now signify the bottom of the approvals for home purchase.

A healthy market tends to have approvals in the range 80,000 - 100,000 averaged over the year, so we are currently around a third of the transactions.

As the housing market continues to fall, house prices will continue to become more affordable. I still stand by my prediction for the market to bottom in Q4 2009 although my £140,000 bottom (Halifax data) is looking like it might be challenged.

FTSE 100 - no more boom and bust?