tag:blogger.com,1999:blog-63279474782041371982024-03-05T21:41:03.627-08:00Angry AliceAlice Cookhttp://www.blogger.com/profile/05753570123987780947noreply@blogger.comBlogger40125tag:blogger.com,1999:blog-6327947478204137198.post-52591194347512523742008-09-21T10:42:00.001-07:002008-09-21T10:42:53.086-07:00Foreigners pulling their cash out of the UK<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi8FO-e_CSzoZNmuZ2UFzebkrcHGq_ioomF6khgfdEXagx-J5G5xDKGtYX5hMOMPx3V30GdOrs4p5iEujOFV0SVWHOKzF6n0OM1uOVI-SBXZgBZYuREJ0g0VV6Kn7bWZgVKth_DWZCN7-2h/s1600-h/external-liabilities.gif"><img id="BLOGGER_PHOTO_ID_5244097414215100386" style="DISPLAY: block; MARGIN: 0px auto 10px; CURSOR: hand; TEXT-ALIGN: center" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi8FO-e_CSzoZNmuZ2UFzebkrcHGq_ioomF6khgfdEXagx-J5G5xDKGtYX5hMOMPx3V30GdOrs4p5iEujOFV0SVWHOKzF6n0OM1uOVI-SBXZgBZYuREJ0g0VV6Kn7bWZgVKth_DWZCN7-2h/s400/external-liabilities.gif" border="0" /></a>It is amazing how the main stream media miss the really big financial stories.<br /><br />Last week, the BoE published data on the external liabilities of UK banks. At the risk of over-simplifying things, this number measures bank deposits of foreigners held here in the UK. What did this number show? Foreigners are pulling out their cash.<br /><br />UK based banks hold huge amounts of external liabilities. In March 2008, the number peaked at almost ₤8 trillion. That is about 5 times UK GDP. However, between March and June, external liabilities fell by ₤740 billion. That represents about a 9 percent fall. As the chart above illustrates, this is not something that has happened recently.<br /><br />As external liabilities were falling, UK banks were reducing their assets. In other words, they were selling off their positions in order to finance their withdrawals. <br /><br />Here is a question - why do you think foreigners are pulling their cash out of the UK?Alice Cookhttp://www.blogger.com/profile/05753570123987780947noreply@blogger.com6tag:blogger.com,1999:blog-6327947478204137198.post-79200095994535680762008-09-21T10:40:00.000-07:002008-09-21T10:41:33.341-07:00Credit card write-offs<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjmjCoe6HInx5DJdwDtKM6JjJFSj9rxY2x6unkzbP297zQ4gRPcwz_P3FlOJtZU-y44a74SHzzPXgLth8p0-1Ga9WQjc5WS1qTIzpkWIabGPLo4LVxjcs7EVix4Y9LiThlqwCU2MSCL4k58/s1600-h/credit-card-write-offs.gif"><img id="BLOGGER_PHOTO_ID_5244401339668134642" style="DISPLAY: block; MARGIN: 0px auto 10px; CURSOR: hand; TEXT-ALIGN: center" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjmjCoe6HInx5DJdwDtKM6JjJFSj9rxY2x6unkzbP297zQ4gRPcwz_P3FlOJtZU-y44a74SHzzPXgLth8p0-1Ga9WQjc5WS1qTIzpkWIabGPLo4LVxjcs7EVix4Y9LiThlqwCU2MSCL4k58/s400/credit-card-write-offs.gif" border="0" /></a>In the third quarter of this year, UK banks wrote off ₤875 million worth of credit card debt. During the last five and a half years, about ₤13 billion had to be written off.<br /><br />Household debt distress has been around for quite a while, yet the Banks kept on lending. The profits from those who paid their credit card debts outweighted the losses from those who didn't.Alice Cookhttp://www.blogger.com/profile/05753570123987780947noreply@blogger.com0tag:blogger.com,1999:blog-6327947478204137198.post-34756543856402791362008-09-21T10:39:00.000-07:002008-09-21T10:40:46.104-07:00Jim Cramer and the equity advice from hell<object width="425" height="344"><param name="movie" value="http://www.youtube.com/v/bL4SFCe1rzA&hl=en&fs=1"></param><param name="allowFullScreen" value="true"></param><embed src="http://www.youtube.com/v/bL4SFCe1rzA&hl=en&fs=1" type="application/x-shockwave-flash" allowfullscreen="true" width="425" height="344"></embed></object><br /><br />This is youtube at its best. US stock picker, Jim Cramer, exposed for his dangerous financial advice.Alice Cookhttp://www.blogger.com/profile/05753570123987780947noreply@blogger.com1tag:blogger.com,1999:blog-6327947478204137198.post-52084666551860714122008-08-09T01:49:00.000-07:002008-08-09T01:51:06.371-07:00No more savings any more<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEip3YklysnF_BakuyMO3D7LgnJUoFiiBHe8jeGxAcndD9RphQeoUZVzkaKlS_96q3JDHmy1P-JYVuTCuyolFNZPOe-jIRQW15R_1mZ-JrlYvcR6r2rLuq5FVVPKJ1296JY_bC9USj_Sj3E5/s1600-h/uk-savings-rate.gif"><img id="BLOGGER_PHOTO_ID_5216814495839795186" style="DISPLAY: block; MARGIN: 0px auto 10px; CURSOR: hand; TEXT-ALIGN: center" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEip3YklysnF_BakuyMO3D7LgnJUoFiiBHe8jeGxAcndD9RphQeoUZVzkaKlS_96q3JDHmy1P-JYVuTCuyolFNZPOe-jIRQW15R_1mZ-JrlYvcR6r2rLuq5FVVPKJ1296JY_bC9USj_Sj3E5/s400/uk-savings-rate.gif" border="0" /></a>UK savings have virtually evaporated. Too much consumption, too much debt and far too much reliance on housing equity.Alice Cookhttp://www.blogger.com/profile/05753570123987780947noreply@blogger.com2tag:blogger.com,1999:blog-6327947478204137198.post-47788468068835896132008-08-09T01:47:00.000-07:002008-08-09T01:49:11.097-07:00Stealth tax<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjC-daIb2psHhoOZ9vJNsmcdduRL7TMA0KuxWGmN5uiJCe6rIuQHKXr6KZedmuHwYYW_s_fWl34pfdUVRP9zIAVXrqBEm9MjroWwF0bm3jUWAKcsayLbSp638uZVSHrlSeZUvkY2zTqPwQJ/s1600-h/higher-rate-tax.gif"><img id="BLOGGER_PHOTO_ID_5219601583998689058" style="DISPLAY: block; MARGIN: 0px auto 10px; CURSOR: hand; TEXT-ALIGN: center" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjC-daIb2psHhoOZ9vJNsmcdduRL7TMA0KuxWGmN5uiJCe6rIuQHKXr6KZedmuHwYYW_s_fWl34pfdUVRP9zIAVXrqBEm9MjroWwF0bm3jUWAKcsayLbSp638uZVSHrlSeZUvkY2zTqPwQJ/s400/higher-rate-tax.gif" border="0" /></a>With each passing year, more people are falling into the higher tax band. Currently, almost 4 million tax payers are regarded as high income earners. That is about one taxpayer in eight.<br /><br />Back in 1990, a little over one million tax payers found themselves paying the higher 40 percent tax rate. Every year since then, the threshold has trapped progressively more taxpayers. Currently, the threshold is set at just £36,000 after personal allowances. It is comfortable wage, but hardly a fortune.<br /><br />The 40 percent band captured these additional taxpayers during a period of high growth. Today, the economy is slowing, and the treasury will be looking for new sources of revenues. With a little higher inflation, limited increases of the 40 percent threshold provides an ideal way of filling up those tax shortfalls.<br /><br />Just wait, it will not be long before a majority of taxpayers will be labeled as "high earners".Alice Cookhttp://www.blogger.com/profile/05753570123987780947noreply@blogger.com0tag:blogger.com,1999:blog-6327947478204137198.post-69100556195885309432008-07-06T03:06:00.000-07:002008-07-06T03:09:12.580-07:00Iranian inflation hits 26 percentIran are pushing ahead with building a nuclear bomb, but can not keep a lid on inflation.<br /><br /><blockquote><span style="color:#6600cc;"><a href="http://news.yahoo.com/s/afp/20080705/wl_mideast_afp/iraneconomyinflation_080705070537http://">TEHRAN (AFP) </a>- Iran's inflation rate, which has provoked intense criticism of the government, topped 26 percent in June, according to a central bank statement published in the press on Saturday. "During the Iranian month of Kordad (to June 20) inflation reached 26.4 percent compared with the same month a year ago," according to the statement published in the economic newspaper Sarmayeh.The previous month, annual inflation was running at 25.3 percent.<br /><br />President Mahmoud Ahmadinejad has been blamed by many economists for directly fuelling the price rises by ploughing huge amounts of cash into the economy to fund local infrastructure projects.</span></blockquote>Alice Cookhttp://www.blogger.com/profile/05753570123987780947noreply@blogger.com1tag:blogger.com,1999:blog-6327947478204137198.post-78510271662636391792008-06-30T08:32:00.002-07:002008-06-30T08:36:03.108-07:00More shocking inflation numbers from the eurozoneSooner or later, central banks will have to raise rates. The <a href="http://news.yahoo.com/s/ap/20080630/ap_on_bi_ge/eu_economy_4">latest inflation shock comes from the eurozone area - 4 percent and rising</a>.<br /><br /><blockquote><span style="color:#333399;">Yearly inflation in euro nations hit a record 4 percent in June, the EU statistics agency Eurostat said Monday, adding pressure on the European Central Bank to raise borrowing costs even as the economy slows.<br /><br />ECB officials have signaled they may hike their key interest rate on Thursday from 4 percent to 4.25 percent to try to cool prices — although that would raise costs for home buyers and companies seeking credit, further slowing the economy.<br /><br />It may also weaken the dollar by encouraging investors to seek higher returns by<br />placing funds in higher-interest euro currency accounts. That could send oil<br />prices, which hit a record above $143 per barrel Monday, higher as well.<br /><br />ECB President Jean-Claude Trichet has insisted that keeping prices<br />stable is his main task and the bank doesn't face a trade-off against economic<br />growth or job creation. That way of thinking does not fit this current wave of<br />inflation, he said last month.<br /><br />Instead of indicating an overheating economy, inflation — now running at the highest level in 16 years — seems to be acting as a brake on Europe's economy as shoppers steer clear of major purchases.</span><br /></blockquote>Alice Cookhttp://www.blogger.com/profile/05753570123987780947noreply@blogger.com0tag:blogger.com,1999:blog-6327947478204137198.post-69800794675304268052008-06-30T08:32:00.001-07:002008-06-30T08:32:38.597-07:00It is the same everywhereIt is funny how the headlines are the same all over the world; house prices down, inflation rising, growth slowing and central banks that don't know what to do. <a href="http://www.theaustralian.news.com.au/story/0,25197,23949823-20501,00.html">There is a sample from Australia</a>.<br /><br /><blockquote><span style="color:#6600cc;">HOME lending growth has suffered its biggest decline since the 1991 recession<br />while inflation continues to soar, confronting the Reserve Bank with the dilemma<br />of a slowing economy and simultaneously rising prices as it meets today to set<br />interest rates.<br /><br />Inflation, according to the series, has been at or above 4 per cent for the past five months - and above the Reserve Bank's 2-3 per cent comfort band since September.<br /></span></blockquote>Alice Cookhttp://www.blogger.com/profile/05753570123987780947noreply@blogger.com0tag:blogger.com,1999:blog-6327947478204137198.post-21019452243378704212008-06-29T03:16:00.000-07:002008-06-29T05:16:58.226-07:00It is getting harder to ramp up propertyBarrow on Furness; <a href="http://property.timesonline.co.uk/tol/life_and_style/property/article4217678.ece">the times must be getting desperate</a>. Is this the only town in the UK still enjoying the bubble?<br /><br /><blockquote><span style="color:#333399;">Barrow-in-Furness, in prime position on Cumbria's “Energy Coast”, is definitely having a moment. The buzz is coming from its proximity to Sellafield, the transformation of its former industrial port into “the Waterfront”, a £200million marina, business park and housing scheme, and its MP, John Hutton, Secretary of State for Business and Enterprise, who is well-placed to talk the town up.<br /><br />Now comes the news that BAE Systems, a local employer, has won the contract to build two super aircraft carriers, creating at least 900 jobs. This is a prime example of the unusual regeneration process in “Barrow”. The comeback of the town is not happening through cappuccino bars and “lifestyle” hype, but with hard economic investment. Millions of pounds are being poured into the town; at BAE Systems, for example, a £40million “ship-building hall” will be created.<br /><br />“Barrow is bucking the trend,” says Stuart Klosinski, industrial development manager at Furness Enterprise, which promotes and supports Barrow businesses. “What we have seen recently is a buoyant housing market affected by large-scale recruitment into the area. As well as BAE Systems and Sellafield up the road, we also have major companies such as Kimberly Clark based here and other firms that require technical, managerial and professional staff.”<br /><br />Year-on-year, house prices in Barrow have risen 11 per cent, and are now on average £111,588; the national average is £183,626 (Land Registry). Terraced houses have had the most significant price rise at 33 per cent, but over the past year, the volume of sales across all properties has dropped by more than 50 per cent.<br /><br /><br /></span></blockquote>Alice Cookhttp://www.blogger.com/profile/05753570123987780947noreply@blogger.com0tag:blogger.com,1999:blog-6327947478204137198.post-27804456470357370502008-06-28T23:37:00.000-07:002008-06-29T05:17:16.821-07:00CEOs giving up bonusesSeems unlikely; but this is <a href="http://www.portfolio.com/news-markets/top-5/2008/06/27/Lehman-CEO-to-Forgo-Bonus?rss=true">what portfolio.com </a>are reporting.<br /><br /><blockquote><span style="color:#3333ff;">In the wake of losses sustained in the credit crunch, John Mack of Morgan Stanley gave up his 2007 bonus, as did top executives of Bear Stearns and Merrill Lynch. Lately, Lehman Brothers has been the Street's problem child, and Yalman Onaran of Bloomberg News reports that its C.E.O., Richard Fuld, and its president, Herbert (Bart) McDade, told the firm's managing directors this week that they will forgo 2008 bonuses.<br /><br />The bonus is typically the majority of a Wall Street professional's annual compensation. But these are hard times, with credit markets mired and with deals and offerings chilled. "I'd be surprised if other C.E.O.'s didn't give up their bonuses this year," Jeanne Branthover, the New York-based head of the financial-services practice at Boyden Global Executive Search, told Bloomberg.</span></blockquote>Alice Cookhttp://www.blogger.com/profile/05753570123987780947noreply@blogger.com0tag:blogger.com,1999:blog-6327947478204137198.post-80487807485321478662008-06-28T23:32:00.000-07:002008-06-28T23:36:07.642-07:00Feedling the lie<a href="http://business.timesonline.co.uk/tol/business/money/investment/article4231058.ece?openComment=true">The times are again</a> feeding the lie that rents are skyrocketing.<br /><br /><blockquote><span style="color:#6633ff;">Paragon Mortgages, which as a specialist buy-to-let lender has a huge interest in keeping landlords sweet, says that rents across Britain have risen by an average 11.7% in the past year.<br /><br />As ever, the villains are the banks. Higher rates and stiffer deposit requirements are preventing tenants from breaking into home ownership, driving more people into renting and trapping those already there.<br /><br />Letting agencies are apparently crying crocodile tears at queues of homeless couples begging to rent and being gazumped into even higher rents by landlords overwhelmed by demand but eager to help.<br /><br />And yet an auction at London’s Café Royal last week was reportedly littered with former buy-to-let properties that had been repossessed by banks because the sums no longer added up for the cash-strapped owners.<br /><br />Can both pictures be accurate? Yes, but they show how fragile the housing market has become. Paragon’s 11.7% rental increase disguises large disparities across the UK. Rents on houses have jumped by a third, while those on flats are, well, flat.</span> </blockquote><br />The ONS rental data says otherwiseAlice Cookhttp://www.blogger.com/profile/05753570123987780947noreply@blogger.com1tag:blogger.com,1999:blog-6327947478204137198.post-91855862140036259412008-06-28T23:26:00.000-07:002008-06-29T05:19:00.465-07:00Bank against bankWhat do Fleck, Fortis, RBS and Barclays have in common? An interesting obsversation <a href="http://mrmortgage.ml-implode.com/2008/06/28/what-do-fleck-fortis-rbs-and-barclays-have-in-common/">from ML-implode;</a> the banks are getting gloomy about banking sector prospects.<br /><br /><blockquote><span style="color:#333399;">"What they have in common is all have recently predicted a massive unraveling of the US financial 'system' within a few weeks. It is not as if this prediction or being on the verge of a meltdown is something new. The financial system has come apart several times in the past year but the Fed has always stepped in with something that has caused the markets to calm down (on the surface) and stocks to rally. Bonds, however, have never responded quite in the manner of stock market participants ..."</span> </blockquote>Alice Cookhttp://www.blogger.com/profile/05753570123987780947noreply@blogger.com0tag:blogger.com,1999:blog-6327947478204137198.post-70521124158899680412008-05-13T09:38:00.000-07:002008-05-13T11:09:10.617-07:00Disappointment and understandingI just loved <a href="http://www.cml.org.uk/cml/media/press/1625">this paragraph from last week's press release </a>from the Council of Mortgage lenders:<br /><br /><em>“We understand the conflict between slowing economic growth and rising inflationary pressures, and the uncertainty over some of the data reflected in the split views of MPC members last month. However, the MPC had an opportunity to act to anticipate the worsening economic environment today, and it is disappointing that there has been no change. "</em><br /><br />Despite feigning understanding about inflationary pressures, the CML remain disappointed that the Bank of England didn't cut rates. The worsening economic environment would be made much worse by a cut in interest rates. Inflation is rising extremely fast right now. A cut in interest rates would exacerbate price expectations and lead to further difficulties down the road.<br /><br />Disappointed! Whatever!Alice Cookhttp://www.blogger.com/profile/05753570123987780947noreply@blogger.com2tag:blogger.com,1999:blog-6327947478204137198.post-91945224121738156592008-05-06T08:34:00.000-07:002008-05-06T08:41:38.032-07:00The estate agent bubble is crashing<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjdD45cNduTNNzlCvzPSgOfsKkAtWIF81g046QlJ5FNG8zwUDEhDIRMAuPwKt8Z-uVXoSM0RVm6yc98ai9ofA26I6HyIvVa9n5SxnM-qNxZmQIfwrSrZV8RrtCGBMgCEvAg-SLSspdRBNc8/s1600-h/nose+dive+on+the+city.jpg"><img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjdD45cNduTNNzlCvzPSgOfsKkAtWIF81g046QlJ5FNG8zwUDEhDIRMAuPwKt8Z-uVXoSM0RVm6yc98ai9ofA26I6HyIvVa9n5SxnM-qNxZmQIfwrSrZV8RrtCGBMgCEvAg-SLSspdRBNc8/s400/nose+dive+on+the+city.jpg" border="0" alt=""id="BLOGGER_PHOTO_ID_5197290419172091106" /></a><br /><a href="http://news.bbc.co.uk/2/hi/uk_news/7385195.stm">The BBC reports</a>:<br /><br />"About 150 estate agents' branches are now closing every week in the UK, according to research. Business monitor Debtwire said the number of branches had fallen from 13,000 to 12,000 so far this year."<br /><br />I could never understand how all those estate agents could survive. In London, they popped up like a plague. Every High Street seemed to have four or five. Now that the market nose-diving, it is hardly suprising that it is taking down 150 estate agents a week.Alice Cookhttp://www.blogger.com/profile/05753570123987780947noreply@blogger.com2tag:blogger.com,1999:blog-6327947478204137198.post-59782397487609708212008-05-04T05:15:00.000-07:002008-05-04T05:18:12.159-07:00Fat cat rescue<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh7WJAJVBdk0JO-q7izeUcixrqjf1jlLBdDHXVFRjBKMeVprmLFwKeOucCz9l0d-u7aEY2dNvkEiIN8eLLAN7JPeKtKLpSZfiZo0iKSXmMBeXx5AgMgCuKaITUzfEvtk9WCjyX_oyHwgnng/s1600-h/fat+cat.gif"><img id="BLOGGER_PHOTO_ID_5196495214567171202" style="DISPLAY: block; MARGIN: 0px auto 10px; CURSOR: hand; TEXT-ALIGN: center" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh7WJAJVBdk0JO-q7izeUcixrqjf1jlLBdDHXVFRjBKMeVprmLFwKeOucCz9l0d-u7aEY2dNvkEiIN8eLLAN7JPeKtKLpSZfiZo0iKSXmMBeXx5AgMgCuKaITUzfEvtk9WCjyX_oyHwgnng/s400/fat+cat.gif" border="0" /></a> A cartoon that says it all.<br /><br />(picked up from <a href="http://housingpanic.blogspot.com/"><u><span style="color:#0000ff;">housing panic)</span></u><br /></a><div></div>Alice Cookhttp://www.blogger.com/profile/05753570123987780947noreply@blogger.com0tag:blogger.com,1999:blog-6327947478204137198.post-83177658467089514972008-05-03T00:38:00.000-07:002008-05-03T00:47:38.050-07:00Building societies begin to shrink<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgK2-xGvReVKM_yO6pjp8BGnPuOCQU1Ga26c7LxGOYRM1N3GDd7WgyrmPVaXiq8TOLH6n7V3rPJFGiq7niFleFrl90I1V_T9ZruOiSEJbYvoyekfruUm9VlRZMtAlLc_17m1G3T5RfufNIN/s1600-h/shrink.gif"><img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgK2-xGvReVKM_yO6pjp8BGnPuOCQU1Ga26c7LxGOYRM1N3GDd7WgyrmPVaXiq8TOLH6n7V3rPJFGiq7niFleFrl90I1V_T9ZruOiSEJbYvoyekfruUm9VlRZMtAlLc_17m1G3T5RfufNIN/s400/shrink.gif" border="0" alt=""id="BLOGGER_PHOTO_ID_5196054873045148754" /></a><br />Today, <a href="http://www.guardian.co.uk/money/2008/may/03/mortgages.banking?gusrc=rss&feed=business">the guardian</a> reported:<br /><br /><em>Mortgage lending by the UK's building societies has slumped by more than £1bn, according to new home-loans data. Building societies advanced net loans of just £580m in March, down from £1.8bn in the same month last year. <br /><br />The 68% decline means that building societies are scaling back lending as a result of the credit crunch even more severely than major mortgage bank rivals, such as Halifax and Cheltenham & Gloucester.</em><br /><br />An unsurprising story; building societies were always more susceptible to the credit crunch since they had a smaller depositor base and a greater dependence on wholesale financing. <br /><br />For the same reasons, building societies are the weakest link in the UK banking system. Although the BoE have never stated this publicly, the Special Liquidity Scheme was almost certainly designed with them in mind.<br /><br /><a href="http://www.guardian.co.uk/money/2008/may/03/mortgages.banking?gusrc=rss&feed=business"></a>Alice Cookhttp://www.blogger.com/profile/05753570123987780947noreply@blogger.com0tag:blogger.com,1999:blog-6327947478204137198.post-72867407076224215672008-04-13T07:03:00.000-07:002008-04-13T07:24:32.674-07:00Debtland - living upside down in AustraliaHere is an excellent programme on personal debt in Australia. Start at the top and work your way down.<br /><br /><object width="425" height="355"><param name="movie" value="http://www.youtube.com/v/bCKzSNZ6TP4&hl=en"></param><param name="wmode" value="transparent"></param><embed src="http://www.youtube.com/v/bCKzSNZ6TP4&hl=en" type="application/x-shockwave-flash" wmode="transparent" width="425" height="355"></embed></object><br /><br /><object width="425" height="355"><param name="movie" value="http://www.youtube.com/v/WLxF2jKq2vw&hl=en"></param><param name="wmode" value="transparent"></param><embed src="http://www.youtube.com/v/WLxF2jKq2vw&hl=en" type="application/x-shockwave-flash" wmode="transparent" width="425" height="355"></embed></object><br /><br /><object width="425" height="355"><param name="movie" value="http://www.youtube.com/v/d6UqgrN4T4E&hl=en"></param><param name="wmode" value="transparent"></param><embed src="http://www.youtube.com/v/d6UqgrN4T4E&hl=en" type="application/x-shockwave-flash" wmode="transparent" width="425" height="355"></embed></object><br /><br /><object width="425" height="355"><param name="movie" value="http://www.youtube.com/v/3iR3blNjesY&hl=en"></param><param name="wmode" value="transparent"></param><embed src="http://www.youtube.com/v/3iR3blNjesY&hl=en" type="application/x-shockwave-flash" wmode="transparent" width="425" height="355"></embed></object><br /><br /><object width="425" height="355"><param name="movie" value="http://www.youtube.com/v/2gTC7b6ndIQ&hl=en"></param><param name="wmode" value="transparent"></param><embed src="http://www.youtube.com/v/2gTC7b6ndIQ&hl=en" type="application/x-shockwave-flash" wmode="transparent" width="425" height="355"></embed></object>Alice Cookhttp://www.blogger.com/profile/05753570123987780947noreply@blogger.com3tag:blogger.com,1999:blog-6327947478204137198.post-13611048623578114352008-04-04T23:12:00.000-07:002008-04-04T23:13:16.153-07:00The UK economy<object width="425" height="355"><param name="movie" value="http://www.youtube.com/v/Nyph3XhFaoA&hl=en"></param><param name="wmode" value="transparent"></param><embed src="http://www.youtube.com/v/Nyph3XhFaoA&hl=en" type="application/x-shockwave-flash" wmode="transparent" width="425" height="355"></embed></object>Alice Cookhttp://www.blogger.com/profile/05753570123987780947noreply@blogger.com0tag:blogger.com,1999:blog-6327947478204137198.post-36841568542045448182008-04-04T23:10:00.001-07:002008-04-04T23:10:44.539-07:00BTL - the madness continuesI checked out a buy to let website - <a href="http://www.niceinvestment.co.uk/minreturn.php">Nice <span class="blsp-spelling-corrected" id="SPELLING_ERROR_0">Investments</span> </a>- today. I picked up a few quotes.<br /><br /><em>"New turn key service means high returns no longer demand huge resources."</em><br /><br /><em>"Multi-Let Residential: "This solution is uncompromisingly the best in the market for gaining the highest rental yields and equity growth."</em><br /><br /><em>"Example: Canada Water 4-bedroom property; Purchase price is £400K; Re-developed to provide 6 bedrooms: Monthly interest mortgage payment c£2K: Rental income c£4K: Property re-valued at £600K, freeing up cash to buy the next property."<br /><br />Example: 1 Bedroom Flat in SE1: Market Value 205K: Negotiated purchase price 155K: Full re-furbishment and high rental fit out for 15k: Pre development rental £650 pm: Post development rental £1,050 pm: Revaluation after development £210k: Equity gain after 6 weeks of development £47K. Surplus cash funding next portfolio purchase.<br /><br />Our unique approach enables us to double standard market rental yields.<br /><br />So if any project in which you participate fails to return a profit by the end of the stated period, <span class="blsp-spelling-corrected" id="SPELLING_ERROR_1">nice investment</span> will return your original sum plus a return of 10% per year for the duration of your investment (not compounded).<br /><br />Single-Let: The focus here is to achieve payback for an investor within months of purchase.<br /><br /></em>The promises here are extraordinary; high returns without "resources" (presumably this means investments without any <span class="blsp-spelling-corrected" id="SPELLING_ERROR_2">down payments</span>); the highest rental yields, equity growth, and a guarantee of a 10 percent return plus original investment.<br /><br />However, I failed to find a single warning on this website that said that the value of an investment can go down; that leveraging multiplies the risk of loss, and that there is some risk with property speculation. Check the website out, and see if you can do better than me.Alice Cookhttp://www.blogger.com/profile/05753570123987780947noreply@blogger.com0tag:blogger.com,1999:blog-6327947478204137198.post-48887184060445958162008-04-04T23:07:00.001-07:002008-04-04T23:07:57.066-07:00The UK housing crash is here<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh-SIlPsJqvaHlhZlMwBhklWbal4MvJkil53FogGozlJVPCVcyPZs9XeHbJ3-fUlt-Lmj5ArwtJk8UU89wOlAyDkm2qw-DzeSenn7KRWeBmIxOnb8Ft2THr9JfJlAX_p-hzkzjn-vaetT0A/s1600-h/nationwide-house-prices.gif"><img id="BLOGGER_PHOTO_ID_5182806513703464098" style="DISPLAY: block; MARGIN: 0px auto 10px; CURSOR: hand; TEXT-ALIGN: center" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh-SIlPsJqvaHlhZlMwBhklWbal4MvJkil53FogGozlJVPCVcyPZs9XeHbJ3-fUlt-Lmj5ArwtJk8UU89wOlAyDkm2qw-DzeSenn7KRWeBmIxOnb8Ft2THr9JfJlAX_p-hzkzjn-vaetT0A/s400/nationwide-house-prices.gif" border="0" /></a> (click on the chart for a sharper image)<br /><br />If you want to understand what is happening to house prices, you must look at a chart. Today, the Nationwide produced their monthly survey of house prices. Unfortunately, the media reported this data by producing a battery of misleading percentage growth numbers.<br /><br />The plan facts are that the Nationwide data shows a substantial nominal price drop since October, when prices peaked. In percentage terms, prices are down almost 4 percent lower than the peak.<br /><br />If prices continue to fall at the rate we have seen over the last five months, then we are likely to see an 8.7 percent annualized nominal fall in prices.<br /><br />Assuming that the RPI inflation rate remains at 4 percent a year - a reasonable assumption since it has been at that level for around two years - then in 12 months time, the real value of housing is likely to be about 13 percent lower than today.<br /><br />The crash is here.Alice Cookhttp://www.blogger.com/profile/05753570123987780947noreply@blogger.com0tag:blogger.com,1999:blog-6327947478204137198.post-52968674874677395752008-03-13T11:22:00.000-07:002008-03-13T11:41:40.383-07:00Unbelievable numbersThe numbers behind Carlyle capital - the hedge fund that is currently on the verge of insolvency - are just incredible.<br /><br /><li> The fund was started in 2006, but it attracted $670 million in equity. <br /><li> It used that equity to build up assets amounting to $21.7 billion. It built up these assets by borrowing around $21 billion.<br /><li> Most of its assets were mortgage-backed securities, primarily AAA-rated bonds guaranteed by Fannie Mae and Freddie Mac. As we have seen,these MBS haven't looked too good recently, what with all those foreclosures in the US. <br /><li> It was leveraged 32 times, giving it an capital ratio of 3.2 percent of its assets.<br /><li>According to the WSJ, it has defaulted on about $16.6 billion of its loans, and expects to default on the rest.<br /><li> The stock has lost around 83% since the company first disclosed its funding problems last week. So the shareholders are pretty much wiped out.<br /><br />How does this kind of hedge fund ever get past a financial regulator?Alice Cookhttp://www.blogger.com/profile/05753570123987780947noreply@blogger.com2tag:blogger.com,1999:blog-6327947478204137198.post-19467242147015022312008-03-11T08:07:00.000-07:002008-03-11T08:08:57.923-07:00UK housing - waiting for a bail outThe UK housing market frightens everyone. Homeowners fear that prices will fall, wiping out billions of pounds of undeserved home equity gains. Renters fear that prices will not fall, thus locking them out of the opportunity to own a home. Banks are petrified that a housing correction will expose their balance sheets to unbearable losses. Meanwhile, the government is equally terrified. A housing slowdown threatens to push the economy into a recession, reduce tax revenues and generate a banking crisis that can only be resolved with a taxpayer-financed bail out.<br /><br />How did the UK housing market become such a fearful monster? In my view, the answer is straightforward; our collective misery is the product of a grotesque union between unfettered finance and suffocating state control, which has distorted the UK economy into a mangled mess. Despite its dreadful nature, this desperately malfunctioning market is rarely described in such terms. Instead, demand, supply and above all a shortage of housing are believed to be the primary causes of our housing-induced anxiety.<br /><br />Let us start by dismissing the notion that there is a housing shortage in the UK. Although rrices are a product of highly regulated supply and credit driven demand, the market "clears" at a price that equates demand with supply. In this sense, there is no "shortage" of housing.<br /><br />There are, of course, millions of people who would like to buy a house but do not have the resources to purchase one at the prevailing price. There are also other people can buy, but only after taking out mortgages that diverts a huge proportion of their disposable income to debt servicing.<br /><br />Over the last decade, banks mercilessly worked over this latter group. Banks have made available billions of pounds for mortgages. With a mixture of fear and greed, many first time buyers have signed away a lifetime of income in order to own a home. Today, personal sector debt has reached breathtaking levels. It is now highly doubtful that much of it can be paid back, and for the first time since the 1720 south sea bubble, the UK is on the brink of a systemic financial sector meltdown.<br /><br />Housing supply is perhaps the most misunderstood part of the market. First, in terms of physical supply of dwellings, the UK has rather a lot of housing. In fact, it currently has around 26 million dwellings. There are around 60 million people living in the UK at the moment, which means that there is one dwelling for approximately every two people.<br /><br /><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEigZ8XASHDIu9EKNLJHr92v9kefVBnywrTqr5zjGkRgpXTJQVYJJD-6iT6ynqCzihCrrxux0KaX8tqIDgdGsX5RInJSydBHCnksV0zpDMqxyBkykY6cwoJFeKs-ajhOPXPSfVkh9NCJeMy3/s1600-h/UK-total-number-of-dwelling.gif"><img id="BLOGGER_PHOTO_ID_5174304614561330434" style="DISPLAY: block; MARGIN: 0px auto 10px; CURSOR: hand; TEXT-ALIGN: center" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEigZ8XASHDIu9EKNLJHr92v9kefVBnywrTqr5zjGkRgpXTJQVYJJD-6iT6ynqCzihCrrxux0KaX8tqIDgdGsX5RInJSydBHCnksV0zpDMqxyBkykY6cwoJFeKs-ajhOPXPSfVkh9NCJeMy3/s400/UK-total-number-of-dwelling.gif" border="0" /></a><br />Furthermore, the number of dwellings is increasing. Back in 1991, there were about 23.5 million homes, so we are up almost 2.5 million homes in about 17 years. Unfortunately, housing construction is also the most regulated activity in the UK. A person may own a piece of land, but she can do nothing with it without the permission of the state. For the last twenty years, the state has used draconian planning procedures to limit the number of new homes to about 200,000 each year. Why it should be so is a mystery, but the quantity restriction is impervious to demographics, income growth or household size.<br /><br /><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg3C-VYnf4ppdhSAGQVV1qI3WSt9coXqxowH-7KcQf3I3XxHjsn-Rokmq7Jy2ArXZiYIUtRiiaCwACwqgFWurJqgeK4sU-WZ06ubw1nZ892R2fk4rZW9Al_x89aybqnsStKEQ3EY4xjs8cj/s1600-h/new-dwellings.gif"><img id="BLOGGER_PHOTO_ID_5174305872986748178" style="DISPLAY: block; MARGIN: 0px auto 10px; CURSOR: hand; TEXT-ALIGN: center" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg3C-VYnf4ppdhSAGQVV1qI3WSt9coXqxowH-7KcQf3I3XxHjsn-Rokmq7Jy2ArXZiYIUtRiiaCwACwqgFWurJqgeK4sU-WZ06ubw1nZ892R2fk4rZW9Al_x89aybqnsStKEQ3EY4xjs8cj/s400/new-dwellings.gif" border="0" /></a><br />Recent construction activity has focused on flat conversions or multi-occupancy dwellings. There is a sad irony here. The vast majority of Brits would prefer to live in a house, rather than an apartment. However, people’s true preferences rarely figure in madhouse we call the UK housing market. Planning restrictions creates a nest of perverse incentives that pushes the construction industry into building what the state will permit rather than what people want.<br /><br />The consequences of this socialistic control of supply and extravagant credit have been appalling. It has generated enormous wealth for older homeowners, while placing a generation of younger homeowners into a lifetime of crippling debt.<br /><br />The housing market has also distorted the economy. It has promoted the financial sector, and crippled manufacturing. Instead of developing productive capacity, credit has been channeled into financing housing transactions, which has left some people richer than they should be, while leaving others with more debt than they can pay off.<br /><br />Today, around one worker in five works in the financial sector while just one person in ten works in manufacturing. So far, the UK has got away with this lop-sided economic structure by financing today's consumption with tomorrow's expected income. However, it cannot go on for much longer. People simply cannot absorb any more debt.<br /><br /><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj-ffcBqLX6mjNg8ptO7wiGo0h4d7LMAN1qUPkW2rNJ2GH3s0-97UVLAAk17QUifobtFZCKGEmi8WiiWRc4Xk8f1dv8_9kEelSW8e3KWHwLW7d35eMguJPh9mOdNd1yHoLDraNkRuAFONFJ/s1600-h/employment.gif"><img id="BLOGGER_PHOTO_ID_5174310116414436642" style="DISPLAY: block; MARGIN: 0px auto 10px; CURSOR: hand; TEXT-ALIGN: center" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj-ffcBqLX6mjNg8ptO7wiGo0h4d7LMAN1qUPkW2rNJ2GH3s0-97UVLAAk17QUifobtFZCKGEmi8WiiWRc4Xk8f1dv8_9kEelSW8e3KWHwLW7d35eMguJPh9mOdNd1yHoLDraNkRuAFONFJ/s400/employment.gif" border="0" /></a><br />It also created a new class of naive property speculators who believe that these distortions can be exploited to generate huge capital gains. In the past, this belief was vindicated. However, the UK housing market is treacherous terrain. The banks, which have driven up demand with easy credit, are now pulling away. Housing prices can not grow infinitely, and a reversal is under way, threatening to impoverish many buy-to-let investors.<br /><br />The collapse of Northern Rock signaled the end of the credit-financed housing boom. Mortgage approvals are now down by around 40 percent. House prices began falling in July last year. UK banks are experiencing increasing mortgage default rates, while write-offs for unsecured debt have skyrocketed. Unsurprisingly, the first sector to show signs of a slowdown was financial services, while the rest of the economy looks likely to move into recession sometime this year.<br /><br />Therefore, it is not hard to understand why people are so afraid. While the planning restrictions will survive, it alone will not prevent a dramatic reversal in prices. The unfolding housing market correction threatens to expose all the underlying weaknesses of the UK economy and all that fear will be replaced by pain and loss.<br /><br /><strong>Data sources:</strong><br /><br />The numbers on house dwellings come from <a href="http://www.communities.gov.uk/housing/housingresearch/housingstatistics/housingstatisticsby/stockincludingvacants/livetables/">table 101 </a>, which can be found on the misnamed Communities and Local Government website. Employment percentages were calculated using ONS data; LOMA for banking and finance and LOLO for manufacturing. <p></p>Alice Cookhttp://www.blogger.com/profile/05753570123987780947noreply@blogger.com0tag:blogger.com,1999:blog-6327947478204137198.post-18985095922185198962008-02-29T22:17:00.000-08:002008-02-29T22:32:05.039-08:00Clean up our hospitals<strong>MRSA deaths in the UK</strong><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj4rZy04wxT5FYOzYXSTP-v0y904pxhSrB2enhxTAWqddLZUe5V1SKeuPNo0a67twXYaYltej3DK2CzBW8rf04nn0sAwsP2HSlt2qTdWZMqpUacIpwb_FvoW0IGSYpCd1TAixmNnx_iOV8h/s1600-h/MRSA.gif"><img id="BLOGGER_PHOTO_ID_5172654122339026754" style="DISPLAY: block; MARGIN: 0px auto 10px; CURSOR: hand; TEXT-ALIGN: center" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj4rZy04wxT5FYOzYXSTP-v0y904pxhSrB2enhxTAWqddLZUe5V1SKeuPNo0a67twXYaYltej3DK2CzBW8rf04nn0sAwsP2HSlt2qTdWZMqpUacIpwb_FvoW0IGSYpCd1TAixmNnx_iOV8h/s400/MRSA.gif" border="0" /></a><br /><strong>Clostridium difficile deaths in the UK</strong><br /><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg9Q7gP-WptdennENViB2UMmICHlv_S_EwoymVk5R3I-NDVXBHpW11vzfTUlf8qAGBs4ES9DYL0CG_N0jHitpm2RD0e68S2Un85j64rx0zTI1Zj34BT79HgR3YXhQAqBuMvShe_Aq0-EMM-/s1600-h/Clostridium+difficile.gif"><img id="BLOGGER_PHOTO_ID_5172654040734648114" style="DISPLAY: block; MARGIN: 0px auto 10px; CURSOR: hand; TEXT-ALIGN: center" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg9Q7gP-WptdennENViB2UMmICHlv_S_EwoymVk5R3I-NDVXBHpW11vzfTUlf8qAGBs4ES9DYL0CG_N0jHitpm2RD0e68S2Un85j64rx0zTI1Zj34BT79HgR3YXhQAqBuMvShe_Aq0-EMM-/s400/Clostridium+difficile.gif" border="0" /></a><br />The complacency about clostridium difficile (c. difficile) and MRSA is nothing short of scandalous. Last year, c. difficile claimed 6,480 lives, while MRSA took lives 1,652.<br /><br />The reason for this shocking death toll is well understood by everyone; dirty hospitals and the fly-by-night contractors who are supposed to clean them. Every month last year, some 677 people died because of this misguided idea that hospital cleaning could be contracted out.<br /><br />It is time to end this epidemic. Ward cleaning should be reintegrated back into the mainstream management of hospitals. There should also be a nationwide campaign of re-establishing hygiene standards within the NHS. This will require extensive ward closures but it needs to be done if we are to stop the escalating death toll from these two bugs.Alice Cookhttp://www.blogger.com/profile/05753570123987780947noreply@blogger.com0tag:blogger.com,1999:blog-6327947478204137198.post-73696020409049391162008-02-18T12:45:00.001-08:002008-02-18T12:45:29.359-08:00Another piece on Northern Rock<object width="425" height="355"><param name="movie" value="http://www.youtube.com/v/1jdj6Ble6_I&rel=1"></param><param name="wmode" value="transparent"></param><embed src="http://www.youtube.com/v/1jdj6Ble6_I&rel=1" type="application/x-shockwave-flash" wmode="transparent" width="425" height="355"></embed></object>Alice Cookhttp://www.blogger.com/profile/05753570123987780947noreply@blogger.com0tag:blogger.com,1999:blog-6327947478204137198.post-59038792399373251102008-02-18T12:43:00.000-08:002008-02-18T12:44:21.276-08:00Darling - in his own words<object width="425" height="355"><param name="movie" value="http://www.youtube.com/v/f5h7Z1vHl8Y&rel=1"></param><param name="wmode" value="transparent"></param><embed src="http://www.youtube.com/v/f5h7Z1vHl8Y&rel=1" type="application/x-shockwave-flash" wmode="transparent" width="425" height="355"></embed></object><br /><br />.... well, perhaps I exaggerate....Alice Cookhttp://www.blogger.com/profile/05753570123987780947noreply@blogger.com0