March 9, 2009
The property peak
Story link: The property peak
The average house price has now settled around somewhere close to £140,000, which for some people, represents a huge loss compared with the capital gains they were sitting on just 12-18 months ago. House prices continue to fall, just like the stability of the futures of people who were depending on their value to retire.
House prices have tumbled a long way since their peak in the autumn of 2007 - by a fifth, in fact.
Much has been made of the fact that they are now roughly back in line with their long-term average, at around £148,000. But that is beside the point - house prices never rise in line with their long-term average: they either grow faster than it or slower, or simply fall - as is now happening.
March 5, 2009
Pump cash into the British Economy
Story link: Pump cash into the British Economy
As mentioned in a previous post, quantitative easing is one method of trying to stabilise an economy, but as history has proved, it is not a method that always has a positive outcome.
The combination of decisions from the Bank of England with the interest rate drops and now this could potentially stabilise the economy, or put it in further difficulty, only time will tell!
Pump cash into the British Economy
The financial crisis will enter a new phase today when the Bank of England announces that it will fight the economic downturn by pumping hundreds of billions of pounds into the economy.
The Bank is expected to confirm at lunchtime that it will embrace quantitative easing, the process of buying up government and corporate debt.
March 3, 2009
Net lending decreases
Story link: Net lending decreases
Lending has seen a massive decrease over the last few months, with net lendings from banks and building societies to households at around £1.1bn for January, which is about 50% down on the average for the last 6 months. The question is whether this is the choice of banks, or the choice of the individual.
http://www.ft.com/cms/s/0/c41ab1a2-0713-11de-9294-000077b07658.html
Lending by banks and building societies to households totalled £1.1bn in the first month of the year – less than half the average for the last six months – according to new data from the Bank of England.
Net lending to individuals, a measure of consumer purchasing activity, fell in January to £1.1bn, roughly half the level of December and the average for the previous six months.
Property is no longer suitable for long term savings
Story link: Property is no longer suitable for long term savings
With news releases suggesting that 100’s of people every week are loosing value on property, which they originally purchased as a method of long term saving, it is clear why many are steering clear, especially in the current climate.
At the moment, the best option is the likes of Cash ISA’s, although this year should represent a great year to get back on the ladder.
Property is no longer suitable for long term savings
According to Gordon Greig, head of savings and investments at Scottish Widows, there has been a decline in the number of people using property for their long-term savings, a move which he supports given the recent decline in the property market and house prices.
In the last 12 months, 8 per cent of people said they were using property for their long-term savings, compared with 38 per cent the year before. This is according to the findings of Scottish Widows savings and investment report 2009.
The stock struggle
Story link: The stock struggle
A lot of traders trade on the basis of what happened in a similar situation the day before, the week before, or even a decade before. They look for patterns in trading and some times trade based on history alone rather than using a mixture of technic
Investors don’t lack ways to measure the carnage on Wall Street. What they’re missing is a way to calculate when the losses will stop.
In falling markets, technical analysts look to stock market history for points where buyers might jump back into the game. These so-called support levels are places where, at least in theory, stock market momentum should slow or shift.
February 23, 2009
Economists fear the worst
Story link: Economists fear the worst
Figures may not be exactly what they seem on the surface. The recession has made a stable British Economy, into one that has seen its worst economic performance in its fourth quarter for nearly 30 years.
Economists said weak industrial production data is likely to trigger a downward revision to the initial estimate by the Office for National Statistics that gross domestic product fell by 1.5pc in the fourth quarter of 2008, the worst performance since the second quarter of 1980.
At the time ONS had factored in a 3.9pc decline in production over the period, whereas figures released since then revealed a 4.5pc fall. That would have dragged GDP down further, resulting overall in a 1.6pc drop in GDP, economists said.
February 17, 2009
Financial mess
Story link: Financial mess
The financial crisis is not the Government’s fault, neither is it Gordon Brown’s, although there have been questions raised as to whether they could have stopped the current recession being as bad as it is!
A LENDING bonanza, a credit bubble, a house price boom and now a slump: who was watching the bigger picture that allowed this catastrophe to unfold? We now have an answer: no-one.
That was the admission yesterday from Lord Adair Turner, head of the Financial Services Authority. He said the regulatory agency did not concentrate enough on the excessive risks taken by banks.
Deeper recession for the UK
Story link: Deeper recession for the UK
The hardest part about a recession, is turning things around and getting rid of it for good.
Business and public finance has slowly become unstable and it is only a matter of time before the UK economy falls into a deeper recession if the Government do not take drastic action soon.
The rapidly deteriorating global economy and the continued difficulties UK businesses are facing in accessing credit will push the economy deeper into recession in 2009, the CBI said today (Monday 16th February, 2009).
The CBI is publishing its latest economic forecast against a worsening international backdrop. Last month the International Monetary Fund revised its forecast for world economic growth sharply downwards, and recent economic data have dashed hopes that growth in the emerging economies would soften the impact of the global downturn.
February 9, 2009
Banks know no shame
Story link: Banks know no shame
The British Financial Industry is not doomed, but it may as well be. Tax payers are constantly footing the bill for a range of banks that are going bust, only to be shot down when they require credit.
Meanwhile, banks are trying to keep their costs low, by paying some around 20,000 of their employee’s huge bonuses, some stretching to six figures!?
The crass behaviour of Britain’s financial aristocracy rivals the last of the Bourbons. Marie Antoinette famously patronised the Parisian mob with her ‘let them eat cake’, while dining in luxury in the Tuileries.
The City bankers who ruined their banks but have been kept in employment by the taxpayer now demand we pay them their bonuses to maintain the aristocratic lifestyle to which they have become accustomed. They know no shame and take no blame. They are lucky the British have no guillotines in stock.
February 7, 2009
Workers to combat debt in Ireland
Story link: Workers to combat debt in Ireland
Workers will be now combating debts in a different way to simply paying them off when they think they have the spare cash.
Around 350,000 workers will have a percentage of their wage bill slashed in an effort to decrease the amount of deficit.
Workers to combat debt in Ireland
Lawmakers backed a government plan Thursday to begin deducting about 7 percent from the paychecks of 350,000 workers — Ireland’s most aggressive move yet to combat a swelling deficit.
Finance Minister Brian Lenihan told Dail Eireann, the Irish parliament, that the new charges were essential to help reverse Ireland’s debt crisis and reassure international markets that Ireland is not in danger of defaulting on loans.