Financial Crisis

[Abrak]

You are over-focussing on higher values. Higher property values will come from the next stages of the economic cycle. Values in 5 years time are likely to be higher than now and 5 years later they are likely to be higher still. I hope that any annual rises will be contained to a sensible level.

You make a value call on house prices as though you know something that we dont. Future house prices are tradeable and the current forecast is that the average house prices in the UK will be nearly 20% lower than they are now in 5 years time. Now I know absolutely nothing about house prices in the UK, so I am not saying you are wrong, merely that to the extent that you are right, you can make some money (or the data is out of date.)

http://www.golf.tradition.com/tfs-news-sto...eleaseApril.htm

[neil324]

midas, I think that you are missing a few fundamentals. People buy property for a host of reasons. Mainly because they want to own their own home. Some will buy for investment, some will buy for pure speculation - no different to many other markets.

You refer to the following:-

1. Increasing unemployment

2. Stagnant wage growth

3. More conservative lending standards by institutions

4. Increase in home repossessions

5. Expectations that interest rates will go up

1 and 2 are inevitable consequences of this stage of the cycle and are expected AND factored in.

3 I never saw lending multiples of the level you described, I think there were a couple 5x salary multipliers for 'professionals' schemes. Many lenders actually work on an affordability model rather than an archaic multiple of income (what about existing outgoings ?). However, there is no doubt that lending criteria became too 'hot' and needed to correct itself. As usual it was too late, a knee-jerk reaction and a boom-bust effect in terms of Credit appetite.

I have said before that I used to be a senior bank manager (senior - not done for effect, just to suggest that I worked at a strategic level that involved me analysing various market factors. I am not a guru but I have experience). I have seen at first hand what happens when the pendulum swings from 'lend it as fast as you can' to 'we are open for business, but we don't really want to lend and I am not putting my neck on the block for anyone'. This in my view is unhealthy, gives credibility to the accusation of banks being fair-weather friends (taking the umbrella back when it starts to rain) and makes a mockery of the governments assertion that they are encouraging/instructing the banks to lend.

There has to be a loosening of credit policy. There are very decent people who are struggling to find a mortgage for a variety of reasons. Not everyone can fit into a black and white tick sheet. I am not advocating a return to the pre-recession attitudes but please don't quote 7x salary multiples as a norm - these are the sort of extremes that are too-readily quoted on forums like this. Extremes exist but life usually goes on in the middle ground. One size fits all rarely fits anyone properly.

4. Repossessions will inevitably rise. This is also no surprise but remember that many people are enjoying the lowest interest rates ever seen and this will increase survivability. Unfortunately, those who find themselves in those unemployment numbers may also fall into the risk area for repossessions - many won't, they will have insurance to cover unemployment or may find alternative income sources. In my area these repossessions have not materially impacted on the market. In the county town some 12 miles away they have, but there was already a ridiculus surplus of over-priced flats.

Remember that not all Northern Rock loans will go bad. They had a flawed business model (in terms of funding) and the 120% Together mortgage product was inappropriate. However, even where repossessions might occur they may only suffer, say, a 20% shortfall. I would suggest that this already in the budget at a higher level.

Repo's will not be given away. There is a competitive demand for these properties and remember that, from an investment perspective, a rented property will yield 5.5% to 7.5% (excluding any growth factor in value) and this is significantly higher than stagnating bank deposits. Many of customers are now buying for this reason.

Also, watch for churchill's comments about demand. Before the recession there was a pent-up demand for housing, Fact. The government were promoting the need for 1m additional new houses in the south east over and above the natural level of supply. Fact.

People will not use an estate agent or mortgage broker to DECIDE whether to buy. Their decision is usually made by the time they get to those people. If they base a decision of the likes housepricedrop.com etc then "up to them".

You are over-focussing on higher values. Higher property values will come from the next stages of the economic cycle. Values in 5 years time are likely to be higher than now and 5 years later they are likely to be higher still. I hope that any annual rises will be contained to a sensible level.

In my view (and experience) churchill is right. 'Values' have probably bottomed in many/most areas - don't bother to look too hard because I can also find the exception that proves the rule. Values are not relevant to retail sales - activity is. Values remain a consequence of supply and demand.

5. Interest rates will most certainly rise. They have to. UK base rates are at an unprecedented low of 0.5% and are manipulated by the MPC on behalf of the government to stimulate activity and ease the cost of borrowing. My mortgage payment has dropped from £870 p.m. to £103 p.m. - thank you.

However, Base Rates are unlikely to rise in the short-term. If and when they rise, economic conditions and confidence will be such that any increases will not be an issue.

Mortgage rates sub 5% for a decent proposal, we even saw a sub 4% in one case - but, we also a 7% case on a 90% loan to value and 90% mortgages are as rare as rocking horse sh!t.

All in all there is a long way to go with more setbacks along that rocky path. I simply report what I am seeing now.

http://newsvote.bbc.co.uk/1/hi/business/8047383.stm

[churchill]

You are over-focussing on higher values. Higher property values will come from the next stages of the economic cycle. Values in 5 years time are likely to be higher than now and 5 years later they are likely to be higher still. I hope that any annual rises will be contained to a sensible level.

You make a value call on house prices as though you know something that we dont. Future house prices are tradeable and the current forecast is that the average house prices in the UK will be nearly 20% lower than they are now in 5 years time. Now I know absolutely nothing about house prices in the UK, so I am not saying you are wrong, merely that to the extent that you are right, you can make some money (or the data is out of date.)

http://www.golf.tradition.com/tfs-news-sto...eleaseApril.htm

"Our indices still show future house price values below the current index level for a decade to come and with rising unemployment and poor mortgage availability, it is still too soon to call the bottom of the physical housing market. But look... future house price expectations HAVE risen and maybe more importantly sentiment HAS moved. The City may be sending a signal that the over-pessimistic phase of the cycle has passed."

So their view is that prices are close to bottoming ? As is always wait too long to invest and you miss the boat >

[Chaimai]

http://newsvote.bbc.co.uk/1/hi/business/8047383.stm

Many valid points in here but also some focus on the extremes.

I am concerned about the FSA. They are having their arse kicked for being tooth-less in the wake of RBS, Northern Rock et al... they are now starting to lash out in all directions as part of a hindsight review - ironic when they have been totally lacking in foresight (or 'now'-sight).

People (lenders, and those linked with lenders) play by the rules of the day. The FSA were instrumental in structuring those rules so any witch-hunt should include a bit of self assessment.

Lessons are not always learned from history - very often the same mistakes are repeated, often they are not recognised as mistakes until the point of no return has passed.

Don't tell me that we will not see someone lending 6x salary in the future because it WILL happen. Greed, or the drive for market-share will turn competitiveness into 'irresponsibility' once again. However, this is not widespread and many of the repossessions are good people, in decent jobs who perhaps took on a 90% mortgage. Lose one of the incomes and risk increases that the owner has to sell. When the marked has dropped by, say, 18% they are immediately into negative equity and the lender faces a shortfall.

By way of contrast, in a 'normal' climate a lender will probably provide 0.3% of it's total mortgage book for bad debts. Prudent loan to value lending rarely sees any losses.

Edited May 30, 2009 by Chaimai

[midas]

midas, I think that you are missing a few fundamentals. People buy property for a host of reasons. Mainly because they want to own their own home. Some will buy for investment, some will buy for pure speculation - no different to many other markets.

Chaimai thanks for an interesting and informative reply.

We will simply have toagree to disagree because I cannot in any way shape or form see how the economic fundamentals

in UK will be strong enough even to maintain existing levels without even mentioning possible increases in value

I'm not disputing that many people in the UK want to own their home but what I'm questioning

is how many of them will be able to afford to do so if economic conditions in England continue to deteriorate.

I just read about young graduates that not only are unable to find work which means they are excluded from

the housing market but they can't even find a way to pay off their student loans.

[Chaimai]

You make a value call on house prices as though you know something that we dont. Future house prices are tradeable and the current forecast is that the average house prices in the UK will be nearly 20% lower than they are now in 5 years time.

My crystal ball is certainly no better than anyone else !

I am a 'repeatest'. By that I mean that I believe (i.e. just my view, not gospel) everything is cyclical and the cycles of the past (i.e. previous recessions) will repeat themselves.

I would also reiterate the point about demand. Just because we have had a severe recession does not mean that the demand for housing has gone away. That demand will feed back in eventually.

My crystal ball is certainly no better than anyone else !

However, the "current forecast" is just that - a forecast by one person or group. E.g:-

"Long Run Forecast for UK House Prices.

It is quite feasible that average UK house prices could reach £300,000 in the next 10 years. Such a prediction is bound to inflame those with an emotive attachment to the idea of a massive house price crash. One sometimes feels like a heretic for not agreeing wholeheartedly with the doom mongers. But, in 1992 with house prices having fallen 15% in a year, who would have predicted average house prices would rise to 200% in the next decade?"

[AlexLah]

But what will the value be of £300.000 in 10 years time?

[midas]

My crystal ball is certainly no better than anyone else !

I am a 'repeatest'. By that I mean that I believe (i.e. just my view, not gospel) everything is cyclical and the cycles of the past (i.e. previous recessions) will repeat themselves.

I would also reiterate the point about demand. Just because we have had a severe recession does not mean that the demand for housing has gone away. That demand will feed back in eventually.

My crystal ball is certainly no better than anyone else !

However, the "current forecast" is just that - a forecast by one person or group. E.g:-

" I believe (i.e. just my view, not gospel) everything is cyclical and the cycles of the past (i.e. previous recessions) will repeat themselves."

Aha ! but with all due respect I consider this is one of the most potentially dangerous traps.

It's not a normal recession because it was only October 2008 eight months ago the U.S. Secretary of the Treasury

was warned that the world financial system was facing total meltdown. It cant be described as " cyclical ".

And no one knows for sure even today how effective the bailout will be.

And in previous recessions, we didn't have anywhere the degree of mobility of labour and

resources as we do now in this globalised world.

In the example you quoted i.e. world conditions in 1992, both China and India had only just

opened their doors for business and the Internet was very much in its infancy. These economic

forces I believe will have a permanent dampening effect on future economic activity UK because let's face it,

what is so attractive about business activity in the UK now when it can be done just as easily and cheaper somewhere else?

[Abrak]

I am a 'repeatest'. By that I mean that I believe (i.e. just my view, not gospel) everything is cyclical and the cycles of the past (i.e. previous recessions) will repeat themselves.

Actually I am very much a 'repeatist' a bit like you even though I know that history does not always repeat.

If we look at history we see over time a very tight correlation between house prices and income. Robert Shiller is best known for his work on US house prices and income which goes back to 1875 or so (and the Case Shiller index) but his analysis of Amsterdam prices which goes back over 450 years is even more detailed.

If you look at the UK no such detailed data exists but over the past 50 years or so prices have oscillated around a mean of 4x income (average post tax household from memory) never dropping below 3x and never rising above 7x (a rather remarkable feat achieved in the last bull run.) Now what is remarkable is that in every correction, prices have not only corrected to mean but have surpassed mean by an average of about 10%. On that basis, (and on the basis (again from memory) that the relevent income is currently c.GBP33,000) average house prices should correct from the current GBP157k to an absolute minimum of GBP100k (levels virtually unseen before) or more likely to a more normalised GBP120-135k which is in fact what the futures prices are suggesting.

To get from there to GBP300k within 10 years would be quite a feat but then again I am not really factoring in any inflation which could be substantial. House prices have grown in real terms 2.9% per annum over the last 35 years and although I suspect growth will be less over the next due to the high starting point and poor demographics, any 'real' effect could get dwarfed by the nominal factor.

[AlexLah]

Average income for a UK Male in 2008 was 521 a week which gives 104 a day

You have on average 223 days of work per year which gives: 23192 annually

Calculating max average mortgage would give:

23192 times 3 is= 69576

23192 times 4 is= 92768

23192 times 5 is= 115960

23192 times 6 is= 139152

23192 times 7 is= 162344

From the high of 187687 down 60% would give around 75000 which is in line with above calculations that banks normally should use.

[Chaimai]

" I believe (i.e. just my view, not gospel) everything is cyclical and the cycles of the past (i.e. previous recessions) will repeat themselves."

Aha ! but with all due respect I consider this is one of the most potentially dangerous traps.

It's not a normal recession because it was only October 2008 eight months ago the U.S. Secretary of the Treasury

was warned that the world financial system was facing total meltdown. It cant be described as " cyclical ".

And no one knows for sure even today how effective the bailout will be.

And in previous recessions, we didn't have anywhere the degree of mobility of labour and

resources as we do now in this globalised world.

In the example you quoted i.e. world conditions in 1992, both China and India had only just

opened their doors for business and the Internet was very much in its infancy. These economic

forces I believe will have a permanent dampening effect on future economic activity UK because let's face it,

what is so attractive about business activity in the UK now when it can be done just as easily and cheaper somewhere else?

I understand and accept the argument that this recession is deeper than any in recent history and therefore it's impact will be more severe. Nevertheless, I believe that history will influence and provide pointers to where we are on this particular cycle of recovery.

Attractiveness of 'business' in the UK is immaterial. The UK has not 'made' anything for decades. The economy is built around 'services' at 76% and activity in the services sector is required to stimulate any recovery. Nevertheless, at £2.13 trillion the UK GDP is a sizeable wedge to throw at the world order.

Edited May 30, 2009 by Chaimai

[midas]

I understand and accept the argument that this recession is deeper than any in recent history and therefore it's impact will be more severe. Nevertheless, I believe that history will influence and provide pointers to where we are on this particular cycle of recovery.

Attractiveness of 'business' in the UK is immaterial. The UK has not 'made' anything for decades. The economy is built around 'services' at 76% and activity in the services sector is required to stimulate any recovery. ?

" The UK has not 'made' anything for decades "

that's what worries me

and I wonder how much of that £2.13 trillion was based on trading worthless financial instruments which have evaporated for a long time?

[midas]

I guess Chai is one of the lucky as the approval rate for mortgages seems to have dropped by 60% if you look at the graph and stats on the site I mentioned

Total mortgage lending falls back

Still no obvious recovery say lenders

The total amount of mortgage lending fell back again in April, the Council of Mortgage Lenders (CML) said.

The amount lent by its members stood at £10.4bn, down from £11.4bn in March, and was 60% lower than in April 2008.

The lenders organisation played down recent suggestions that the housing market may be about to pick up.

An apparent bounce in activity may have come to an end, with completed sales flattening out in the past two months.

Prices

Despite the recent pick up in activity, house prices are still falling, according to surveys from lenders such as the Nationwide.

About two-thirds of all mortgage deals currently on offer specify a downpayment of at least 25%, although there has been a slight relaxation by lenders recently.

"Although some innovative new mortgage products have been launched recently, the fate of the property market is still very much in the hands of the lenders," said Andrew Montlake of mortgage brokers Coreco.

http://news.bbc.co.uk/1/hi/business/8060872.stm

Edited May 31, 2009 by midas

[midas]

I would also reiterate the point about demand. Just because we have had a severe recession does not mean that the demand for housing has gone away. That demand will feed back in eventually.

It would be interesting to know how many would be buyers could come up with a 25% deposit ?

[Abrak]

Average income for a UK Male in 2008 was 521 a week which gives 104 a day

You have on average 223 days of work per year which gives: 23192 annually

Calculating max average mortgage would give:

23192 times 3 is= 69576

23192 times 4 is= 92768

23192 times 5 is= 115960

23192 times 6 is= 139152

23192 times 7 is= 162344

From the high of 187687 down 60% would give around 75000 which is in line with above calculations that banks normally should use.

As I say I think the data uses average household income which includes more often than not a working woman or probably some 40 -50% of a working woman. In any case average per household income is higher than an individuals. To be honest I dont know what the data is based on pre-tax, after tax, household, single earner etc but I do remember it was based on a household income of about of GBP33k. Obviously you could rebase the numbers based on a single earner in a houshold or a home and the figures would look different but I seem to remember they used some vaguely sensible statistic. (I dont think it is fair to question the data simply because I havent properly backed up every figure - that is my fault not theirs.)

It is rather like someone has questioned the Halifax price index as being inherently bias - this would seem a fair point. However the Land Registry has a very rigorous method of calculating home prices based on over 7 million data inputs and their result does not differ much. Whether this is just a coincidence at this point in time I cant tell you but it is hard to argue with the way the Land Registry is compiling its data.

(Incidentally using the banks as a back for any argument would seem a little feeble at this stage in the cycle.)

[badge]

The nationwide house price data in the UK shows that avg. house prices over the pat 50yrs usually overshoot - in both directions - the moving average. It also shows once a trajectory - in both directions - is established, it takes at least 3yrs to turn again.

Based on these back-of-fag-packet calculations, Id suggest avg. home prices in the UK will bottom at 110,000 - 130,000, in the next 3-5yrs.

This is a shorter term chart, but demonstrates the notion.

http://www.housepricecrash.co.uk/graphs-av...house-price.php

[badge]

In line with the unprecedented extremes we are currently witnessing, we could also see unprecedented falls in avg. home prices, below 100,000 perhaps. We could of course also see an unprecedented recovery. I favour the former however

[Abrak]

In marked contrast to the futures for UK house prices in general which are expected to drop by over 10% in the next 5 years, house prices in London (in the futures market) have pretty much forecast to have bottomed and are expected to rise over 10% in the next 5 years.

http://www.prnewswire.co.uk/cgi/news/release?id=187573

This, in itself, could explain the wildly differing views and experiences that some members are finding in the property market. Some are very London centric where the market appears to have stabilised while others are more in the woods where it looks as though prices have a lot further to fall.

[badge]

Indeed Abrak Fortunately for those of us who look to profit from financial markets, they are littered with mispricing and inefficiency. Financial markets failed to price correctly instruments from Subprime bonds to Bank pref shares to REITs and home building co's Equity... theres great opportunity out there

[midas]

jcon, this is what I meant about USA living above its means

Storms on the Horizon

" No combination of tax hikes and spending cuts, though, will change the total burden borne by current and future generations. For the existing unfunded liabilities to be covered in the end, someone must pay $99.2 trillion more or receive $99.2 trillion less than they have been currently promised. This is a cold, hard fact. The decision we must make is whether to shoulder a substantial portion of that burden today or compel future generations to bear its full weight."

Richard W. Fisher

President and CEO of the Federal Reserve Bank of Dallas.

http://online.wsj.com/article/SB124303024230548323.html

[Naam]

Indeed Abrak Fortunately for those of us who look to profit from financial markets, they are littered with mispricing and inefficiency. Financial markets failed to price correctly instruments from Subprime bonds to Bank pref shares to REITs and home building co's Equity... theres great opportunity out there...

...if the green shoots keep growing. however, i have the feeling that they are taking a breather.

[flying]

In marked contrast to the futures for UK house prices in general which are expected to drop by over 10% in the next 5 years, house prices in London (in the futures market) have pretty much forecast to have bottomed and are expected to rise over 10% in the next 5 years.

http://www.prnewswire.co.uk/cgi/news/release?id=187573

This, in itself, could explain the wildly differing views and experiences that some members are finding in the property market. Some are very London centric where the market appears to have stabilised while others are more in the woods where it looks as though prices have a lot further to fall.

I am not sure if it is the same on that side of the world but..........

On this side we really expect the housing market reports to be hot air.

On this side most of these types of forecasts are made by Brokers & Realtors.

Of course it would not behoove them to tell what the market is actually doing...

As it would just mean customers waiting for further drops in prices.

The best indicator here is what does the MLS show? The Multiple Listing Service will show actual sales & how long they were on the market.

Also will show asking price as well as actual sale price.

I did notice on the link you provide it said this.............

Founded in 1985, TFS is a market leader in the brokering of financial and non-financial products. With offices worldwide, the Company covers currency options, equity and property derivatives,

Edited May 31, 2009 by flying

[midas]

In marked contrast to the futures for UK house prices in general which are expected to drop by over 10% in the next 5 years, house prices in London (in the futures market) have pretty much forecast to have bottomed and are expected to rise over 10% in the next 5 years.

http://www.prnewswire.co.uk/cgi/news/release?id=187573

This, in itself, could explain the wildly differing views and experiences that some members are finding in the property market. Some are very London centric where the market appears to have stabilised while others are more in the woods where it looks as though prices have a lot further to fall.

I am not sure if it is the same on that side of the world but..........

On this side we really expect the housing market reports to be hot air.

On this side most of these types of forecasts are made by Brokers & Realtors.

Of course it would not behoove them to tell what the market is actually doing...

As it would just mean customers waiting for further drops in prices.

The best indicator here is what does the MLS show? The Multiple Listing Service will show actual sales & how long they were on the market.

Also will show asking price as well as actual sale price.

I did notice on the link you provide it said this.............

Founded in 1985, TFS is a market leader in the brokering of financial and non-financial products. With offices worldwide, the Company covers currency options, equity and property derivatives,

Maybe it's just my untrusting mind these days ( and who can blame me ? )

regarding anything to do with fancy financial products but when I first read about

TFS UK Future House Price Indices, my first reaction was just how genuinely transparent all of this could be ?

Surely somewhere along the line, investing in House Price indices would require input

based on property value " opinions " somewhere in the process which I don't like because how can the government regulators

possibly keep up with that to ensure there is never any conflict of interest involved ?

But when you see on the TFS web site that they're actually " in partnership "

with Strutt & Parker one of England's biggest estate agents, how can they possibly

ensure against the threat of manipulation, lack of transparency etc ? Sorry but

once you hear estate agents are involved you cannot possibly guarantee

a service which relies on truly impartial opinions?

Edited May 31, 2009 by midas

[AlexLah]

Indeed Abrak Fortunately for those of us who look to profit from financial markets, they are littered with mispricing and inefficiency. Financial markets failed to price correctly instruments from Subprime bonds to Bank pref shares to REITs and home building co's Equity... theres great opportunity out there...

...if the green shoots keep growing. however, i have the feeling that they are taking a breather.

Bah! What is it with you doom and gloomers, what about the very clear green shoots I see. hmmmmmm?

Another funny picture I found somewhere.

Hold on to your seats, I have a feeling coming week will bring some bad weather, on the other hand I could be wrong.......

[badge]

Indeed Abrak Fortunately for those of us who look to profit from financial markets, they are littered with mispricing and inefficiency. Financial markets failed to price correctly instruments from Subprime bonds to Bank pref shares to REITs and home building co's Equity... theres great opportunity out there...

...if the green shoots keep growing. however, i have the feeling that they are taking a breather.

...whos reliant on green shoots?

[12DrinkMore]

Bah! What is it with you doom and gloomers, what about the very clear green shoots I see. hmmmmmm?

Very pleased to see that you are investing in agriculture, an industry with a future, we will all need to eat something in the aftermath of this crisis.

I have been toying with the idea of a GSI "Green Shoots Index". But it all got a little difficult, because I there are so many factors involved. The media and politicians go on about

- House prices, yep, this tedious topic which I am fed up with.

- DJI, FTSE and the rest, which have IMO, for many years not reflected the current state of the economies, but are the combined result of market speculation about how a particular share will perform in the next five milliseconds. The combined market capitalisation of the FTSE is some £1,171 billion. (http://en.wikipedia.org/wiki/FTSE_100_Index). This index goes up and down during the course of a day by a percent or so. For every percent change 12,000,000,000 is added to or dropped from the combined shareholders' assets. Now normally, taking an analogy from the physical world, there would not be massive changes from something that is measured in trillions of kilos, there is a huge amount of inertia. But somehow, in the world of finance, the normal laws of physics do not apply. The FTSE is comprised of the biggest 100 companies in the UK. How the f%$ can this huge representative sample of all these companies across all facets of the UK economy resulting in the FTSE moving by single digit figures in a single day? Surely we should be looking at .01% changes? How, in 24 hours, can the whole lot move up in down in value by humongous amounts?

Nope, this is not real, it is just another way the banks suck the money out of the pockets of the "real stuff" producing population.

- GDP, another vacuous statistic which is manipulated at will

And a few others, but surely what really counts is the unemployment figure? This is also a manipulated figure, but, in the end, it is only the productive and employed population that will result in a recovery. And as long as jobs are being lost at a vast rate, and unemployment forecasts dismal, the bottom has NOT been reached.

So I vote for the unemployment statistics, once these have stabilised over a few months then we have reached the bottom. But how quickly a recovery will come from there, I am at a loss.

Hold on to your seats, I have a feeling coming week will bring some bad weather, on the other hand I could be wrong.......

Alex, I am sure you will find a few sunny pictures to cheer us all up. I did not find the "green shoots" very inspiring, but certainly a few tanned curves will take our minds off the stormy weather.

[12DrinkMore]

Another two disturbing reports I have come across.

http://www.telegraph.co.uk/finance/newsbys...elds-spike.html

The US Federal Reserve may soon be forced to launch fresh blitz of quantitative easing whatever the consequences for the US dollar, or risk seeing economic recovery snuffed out by the latest surge in long-term borrowing costs

Surely what we are seeing is the reluctance to take on long term US debt at low interest rates because of the risk of the USD collapsing? And surely if the Fed increases the amont of QE then long term interest rates will rise even higher to reflect the increased risk?

Almost 6pc of "prime" borrowers are in arrears, showing how far the crisis has moved beyond the sub-prime. Most arrears are caused by job losses. The US unemployment rate has reached 8.1pc, and is even higher under older definitions, running at 15.8pc under Clinton-era metrics.

no comment, except that it's still looking gloomy.

And this has not been so widely reported

http://www.guardian.co.uk/business/2009/ma...nglo-irish-bank

The Irish government is injecting up to €4bn (£3.5bn) into the nationalised Anglo Irish Bank, which reported the worst loss in Irish history today and risked becoming a threat to the system.

In the first half of its financial year, it reported a €4.1bn loss, largely caused by impairment charges for loans that have turned sour of €3.7bn. The bank, which is heavily exposed to the deflating Irish property sector, warned its losses on loans could balloon to €7.5bn for the three years to the end of September 2011.

Is it a sign of the crisis that such a massive bailout no longer raises an eyebrow?

And they expect another TWO YEARS plus of losses in the property sector.

[AlexLah]

I Know there has not been a big down in the DJ as I expected, instead there was a big drop in the USD index.

Just unsure about what is going down coming week.

[12DrinkMore]

Jobless

Jobless and Worthless

Well, that is possibly how they feel.

http://www.bloomberg.com/apps/news?pid=206...&refer=home

The economy has lost 5.7 million jobs since the recession began in December 2007, the most of any economic slump in the post-World War II era.

That means 5,700,000 people have lost their jobs. With not much hope of a new job.

And now, just one more report

http://www.bloomberg.com/apps/news?pid=206...&refer=home

Germany Picks Magna to Buy Opel; 11,000 Jobs May Go

And the green shoots are reckoned, at least in the UK, as an increase in the number of inquiries by potential purchasers of houses?

Why are they giving us this BULLSHIT?

We need to see reports of "xyz.ltd" is expanding and looking for x,000 employees.

[midas]

b.

And the green shoots are reckoned, at least in the UK, as an increase in the number of inquiries by potential purchasers of houses?

Why are they giving us this BULLSHIT?

We need to see reports of "xyz.ltd" is expanding and looking for x,000 employees.

12, for a few minutes during the week flicked on to Bloomberg Channel

during an interview with this guy rabbiting on that he honestly believes

we're in a bull market which could go on for another year ! I just sat there in a trance………..

Just based on what you posted above today, how can the fundamentals

justify corporate earnings that would translate into a bull market?

And maybe the stock market will keep going up because they wet themselves so much bout positive

consumer sentiment reports and business sentiment reports even when on the very

same bulletin they announce another 600,000 jobs have been lost. Which data is more

important ……………….? Then its even more talk about green shoots

This is weird but as I recall didn’t the same thing

happen during the 1930’ depression where stocks went up?