I had a most revelatory phone call this morning. This is not verbatim, but it's the gist.
" Is that Mr. Lear? This is Central Mortgages."
" Yes"
" You applied for a mortgage and I'm going to take you through security and your application."
" No I didn't"
"Didn't what?"
" Apply for a mortgage"
" Oh, must have been a personal loan then."
" No, I didn't. Where did you get my 'phone number?"
" Er da-di-da says here customer servicies 5033"
" What does that mean?"
" It means you applied for a loan"
" No, I did NOT!"
" Well you must have done, I've got your details here."
" I'm only going to say this once more - I did not apply for any kind of loan."
" Well, Mr. Lear, let me just say that as a preferred customer, we can give you £5000 immediately, provided you qualify.."
" How can I be a preferred customer if I've never heard of you, never asked for a loan, nor, I may say, given you my phone number?"
"That's as may be sir, but I can assure you we have £5000 just waiting for you.. let me put you through to the lady who will actually give you the money.." click.
" Hello? Hello?"
Click. " Hello, Mr. Lear, this is Sandra here. I'm terribly sorry you are quite correct, you are not a customer of ours so we can only give you £50 to £500 as a new customer....."
" But I don't want a loan."
"... and the APR is a very reasonable 222.5% made up of ..
" WHAT? 225%? Are you mad? Even credit cards aren't any more than about 30 odd%!"
".. and for your security and protection this conversation is being recorded.."
I put the phone down at that point.
But I'm willing to bet that there must be people who take up this sort of offer.
But how did they get my phone number?
After digging around a bit, I discovered that there is a company that collates mobile numbers. Obviously, not pay as you go, but those that are on contract can be " tagged" with a name.
And they sell this information to whoever wants it.
Makes you wish for 1984.
Tuesday, October 28, 2008
Friday, October 24, 2008
Ah, now things are beginning to make a bit of sense...
"Russia's richest man is having money troubles, and the country's largest nickel producer could change hands as a result. Forecasting firm Global Insight reports that Oleg Deripaska isrunning out of time and money to pay back the USD 4.5 billion he borrowed from a group of foreign financial institutions in April 2008 to purchase a 25% share in Norilsk Nickel. Deripaska used the shares in the nickel producer as collateral, but their value has since plummeted to the point that they no longer cover the money he owes; Deripaska now needs USD 1.8 billion to refinance the loan, according to the report.Deripaska's creditors have granted him an extension until the end of the month, but it is unlikely they will be so generous again. The oligarch has already sold his assets in Canadian automotive parts maker Magna andGerman construction company Hochtief, but these deals still have not produced enough funds to pay off the debt, the report states. Having exhausted every other possibility, Deripaska is now seeking help from the state."
PR Newswire 23 October 2008
Remember when Brown tried to con the meedja about the election that wasn't, about the troops coming home and they turned on him?
The same is about to happen to Mandelson.
PS
And for those of us who think Mandelson is a lying toad, I think his letter to the Times today amply proves our point.
PPS
Oh, and, of course, the News of the World's Exclusive
PR Newswire 23 October 2008
Remember when Brown tried to con the meedja about the election that wasn't, about the troops coming home and they turned on him?
The same is about to happen to Mandelson.
PS
And for those of us who think Mandelson is a lying toad, I think his letter to the Times today amply proves our point.
PPS
Oh, and, of course, the News of the World's Exclusive
The US leads the way
"The spectacular dollar rebound has geostrategic implications. Heady talk earlier this year that dollar hegemony was coming to an end - or indeed that the US was losing its status as a financial superpower - now seems very wide of the mark."
It always was. I have repeatedly said, the US economy is so flexible that it will recover before anyone else. Every TV channel in the US is reporting an upturn in every State of house sales and so is the Times. Yes they are much cheaper than they were. Yes it's hard to get the mortgage. Yes it's bloody for those who have lost their houses. I sincerely wish the UK only had to fall another 9% to get better.
But it's got much more to go, and by the time US house prices start rising again, we will still be looking for the bottom.
It always was. I have repeatedly said, the US economy is so flexible that it will recover before anyone else. Every TV channel in the US is reporting an upturn in every State of house sales and so is the Times. Yes they are much cheaper than they were. Yes it's hard to get the mortgage. Yes it's bloody for those who have lost their houses. I sincerely wish the UK only had to fall another 9% to get better.
But it's got much more to go, and by the time US house prices start rising again, we will still be looking for the bottom.
Why was Mandelson so much with Mr.Deripaska?
I've just read the full statement from George Osborne here :http://jamescleverly.blogspot.com/2008/10/osborne-and-mandelson.html
Two things strike me. Only once in all the meetings was Mandelson not with Deripaska.
If anything, it looks very much as if Mandelson is in Deripaska's pocket.
Secondly, I can't help but feel Mr. Rothschild - who handles Mr.Deripaska's money, or some of it at least - has an ulterior motive.
Who knows?
They may all be as innocent as GO himself....
Two things strike me. Only once in all the meetings was Mandelson not with Deripaska.
If anything, it looks very much as if Mandelson is in Deripaska's pocket.
Secondly, I can't help but feel Mr. Rothschild - who handles Mr.Deripaska's money, or some of it at least - has an ulterior motive.
Who knows?
They may all be as innocent as GO himself....
A bit of sense
OSLO, Oct 24 (Reuters) - Norway's biggest banking group DnB NOR said onFriday that it would reverse write-downs worth 2.59 billion Norwegian crowns($369 million) on its liquidity portfolio due to new accounting rules. The move follows new regulations announced by Norway's finance ministryon Oct. 16, that allowed the reclassification of trading portfolios to"held-to-maturity investments". DnB NOR said its liquidity portfolio would fitinto this category. "After the reclassification, the accumulated write-downs will be reversedover the residual maturity of the portfolio, which averages 3.25 years, and willbe recorded under net interest income," DnB NOR said in a statement. "There have been no actual losses or events of default in the portfoliosince the start of the financial crisis, and the portfolio is still of superiorquality," Dnb NOR added. "If no reclassification had been made, the group would alternatively havecharged 1.199 billion crowns to the 2008 third quarter accounts due a furtherwidening in margins." (Reporting by Aasa Christine Stoltz)
What this means is, instead of the mark to market that has decimated the banks, in Norway, they can spread the "mark to market" value over the life of the loans.
So, for example, instead of writing off $369 million TODAY, they only have to write off just over $100million today. But if NEXT year the mark to market is not $269 million loss but say only $100million, they still have 2.25 years to final maturity and would only need to write off $45million. And of course the write down helps their tax position too.
Good thinking.
What this means is, instead of the mark to market that has decimated the banks, in Norway, they can spread the "mark to market" value over the life of the loans.
So, for example, instead of writing off $369 million TODAY, they only have to write off just over $100million today. But if NEXT year the mark to market is not $269 million loss but say only $100million, they still have 2.25 years to final maturity and would only need to write off $45million. And of course the write down helps their tax position too.
Good thinking.
Getting worse?
With the £ crashing, the FTSE crashing, the Banks sitting on their hands and the office having run out of tea bags, things are pretty bleak.
But I remain convinced now is a time to buy.
For a start, if the £ is well down, that will make exporters very happy. Because of oil's precipitous fall, inflation overall, will, I suspect, be muted, and I would be willing to bet we see interest rates of 3% or lower from the BofE within 6-8 months. All these should produce higher profits ( or lower losses) as time goes on. Quite a few seriously good businesses are now sitting on PEs of less than 4 - and yielding 11% plus. Of course they will retrench, but two in particular I like have never been on less than a PE of 10 and a yield of 3% - which probably means they are about to go bust if I like them
The other point is it's much easier to buy as a share drops than when it is going up.
We have a long way to go, and if you feel you would like to wait feel free.
But I maintain my view that 3800 on the FTSE, give or take a few points, will be it.
My left palm has been seriously itchy for a few days......
PS
Not everyone thinks left hand itchy is money coming in. My Granny always said it was and that's good enough for me.
But I remain convinced now is a time to buy.
For a start, if the £ is well down, that will make exporters very happy. Because of oil's precipitous fall, inflation overall, will, I suspect, be muted, and I would be willing to bet we see interest rates of 3% or lower from the BofE within 6-8 months. All these should produce higher profits ( or lower losses) as time goes on. Quite a few seriously good businesses are now sitting on PEs of less than 4 - and yielding 11% plus. Of course they will retrench, but two in particular I like have never been on less than a PE of 10 and a yield of 3% - which probably means they are about to go bust if I like them
The other point is it's much easier to buy as a share drops than when it is going up.
We have a long way to go, and if you feel you would like to wait feel free.
But I maintain my view that 3800 on the FTSE, give or take a few points, will be it.
My left palm has been seriously itchy for a few days......
PS
Not everyone thinks left hand itchy is money coming in. My Granny always said it was and that's good enough for me.
Thursday, October 23, 2008
How to lose friends and alienate people
Gordon Brown
1) Uses anti-terror law to steal Iceland's money ( see Guido and We are not Terrorists)
2) Force the Icelanders to take money from Russia ( they might want the abandoned American airforce base)
3) Lend them money to use to pay us back - er ...without releasing the frozen money.
As they now say in History lessons " And how do you think they feel about all that?
Just in case you've forgotten, the Icelanders won the various Cod Wars.....
1) Uses anti-terror law to steal Iceland's money ( see Guido and We are not Terrorists)
2) Force the Icelanders to take money from Russia ( they might want the abandoned American airforce base)
3) Lend them money to use to pay us back - er ...without releasing the frozen money.
As they now say in History lessons " And how do you think they feel about all that?
Just in case you've forgotten, the Icelanders won the various Cod Wars.....
Tuesday, October 21, 2008
The art show
One of the reasons I was in Romania this last week was for an art show by Ion Constantinescu. His show was in Medias in the Cultural Museum, and the great and good from round about were invited - and me.
Best known for his paintings, his works on woodblock and other gravure methods are what set him apart from his contemporaries.He uses both lime and chestnut,using the different textures of the woods to give different effects, and create other meanings to his work. His imaginations is clearly thrown forward from his soul, and many of his works display allegorical and semi-mystical themes. For only a few Lei you can have something that speaks to your mind.
We were invited for lunch on Sunday before departure for the overnight train back to Budapest. You might think the juxtaposition of " lunch" and "overnight" sounds strange, but not in Romania. We had excellent salad soup, made with lashings of cream, eggs, bacon and garlic - clearly to keep the vampires at bay - followed by sarmale, pork chops, roasted vegetables and boiled potatoes of such excellence that everyone had third helpings of them. The grand finale was a cake, made with intermingled sponges of different kinds. His own wine was decanted from wax-sealed bottles, and the tuica was made from pears rather than the more usual plums. The lunch was in his studio, surrounded by paintings, castings, wood blocks and catalogues of past and present exhibitions.
You may ask what all this has to do with doing business in Romania, and the answer is very little really. But he is a member of the Romania Artists Union, a prestigious self-help association that requires exacting standards of excellence. One of their objects is to find and promote new young talent. To this end, our company has donated a prize for the best young artist of 2009, and as a thank you, Ion intends to present a picture at the ceremony on November 4th 2008, commemorating 10 years since Prince Charles visited Mosna.
It's not business as we know it, but it's the way things get done in Romania.
Best known for his paintings, his works on woodblock and other gravure methods are what set him apart from his contemporaries.He uses both lime and chestnut,using the different textures of the woods to give different effects, and create other meanings to his work. His imaginations is clearly thrown forward from his soul, and many of his works display allegorical and semi-mystical themes. For only a few Lei you can have something that speaks to your mind.
We were invited for lunch on Sunday before departure for the overnight train back to Budapest. You might think the juxtaposition of " lunch" and "overnight" sounds strange, but not in Romania. We had excellent salad soup, made with lashings of cream, eggs, bacon and garlic - clearly to keep the vampires at bay - followed by sarmale, pork chops, roasted vegetables and boiled potatoes of such excellence that everyone had third helpings of them. The grand finale was a cake, made with intermingled sponges of different kinds. His own wine was decanted from wax-sealed bottles, and the tuica was made from pears rather than the more usual plums. The lunch was in his studio, surrounded by paintings, castings, wood blocks and catalogues of past and present exhibitions.
You may ask what all this has to do with doing business in Romania, and the answer is very little really. But he is a member of the Romania Artists Union, a prestigious self-help association that requires exacting standards of excellence. One of their objects is to find and promote new young talent. To this end, our company has donated a prize for the best young artist of 2009, and as a thank you, Ion intends to present a picture at the ceremony on November 4th 2008, commemorating 10 years since Prince Charles visited Mosna.
It's not business as we know it, but it's the way things get done in Romania.
Saturday, October 18, 2008
A Man's World
I'm back in Romania having swung through Balaton,Vizvar and Pecs in Hungary.
Balaton I could hardly see as it was so foggy, and the overnight stay was really quite spookey. Siofok is a summer resort town where everything clearly shuts before the end of September. I had great difficulty getting anything to eat, but ended up with an above average meal in the last restaurant that was still open.
It took forever to get toVizvar through the fog. I had thought that it might be good to own a cottage there but was a bit disappointed. If you lived in Pecs or Budapest, it would be fine for weekends and holidays, but there was really nothing there - and it's a long way from anything apart from the Croatian border. Good for smugglers I suppose.
Pecs was delightful - very Austro-Hungarian empire. I stayed the night in a hotel that still rang of hussars in beautiful uniforms clanking up the stairs. Next morning the sun decided to shine, so I was able to have a quick look round before heading back to Budapest to get the train. The lovers locks were quite extraordinary and strangely moving. I wondered if anyone ever went back to remove their padlock when a love affair cooled. I was delighted to see that Capitalism flourished here - there was a shop within a few meters that offered all kinds and sizes of locks. Weirdly, they all came with three keys. One for each lover - and the third? I have no idea.
Sighisoara had put her best clothes on for my arrival - it was warm and sunny.
Everything here is seldom to be taken at face value. For example, why would two men in their early 40s buy two pieces of land beside each other within a village at a vastly inflated price - and then ask to buy some of ours? I didn't give much credence to the story that they wanted to have a house each and they needed the extra land for a swimming pool or place for their children to play. I think it much more likely that they are planning a rather large hotel as the land has superb views to one of the most attractive fortified churches, with hills beyond. Property prices worldwide may not be looking healthy, but here in Romania something that could be bought for Eur 10-15,000 a year ago is now virtually unobtainable at Eur 30,000.
If all else fails at least that will be something to fall back on.....
Balaton I could hardly see as it was so foggy, and the overnight stay was really quite spookey. Siofok is a summer resort town where everything clearly shuts before the end of September. I had great difficulty getting anything to eat, but ended up with an above average meal in the last restaurant that was still open.
It took forever to get toVizvar through the fog. I had thought that it might be good to own a cottage there but was a bit disappointed. If you lived in Pecs or Budapest, it would be fine for weekends and holidays, but there was really nothing there - and it's a long way from anything apart from the Croatian border. Good for smugglers I suppose.
Pecs was delightful - very Austro-Hungarian empire. I stayed the night in a hotel that still rang of hussars in beautiful uniforms clanking up the stairs. Next morning the sun decided to shine, so I was able to have a quick look round before heading back to Budapest to get the train. The lovers locks were quite extraordinary and strangely moving. I wondered if anyone ever went back to remove their padlock when a love affair cooled. I was delighted to see that Capitalism flourished here - there was a shop within a few meters that offered all kinds and sizes of locks. Weirdly, they all came with three keys. One for each lover - and the third? I have no idea.
Sighisoara had put her best clothes on for my arrival - it was warm and sunny.
Everything here is seldom to be taken at face value. For example, why would two men in their early 40s buy two pieces of land beside each other within a village at a vastly inflated price - and then ask to buy some of ours? I didn't give much credence to the story that they wanted to have a house each and they needed the extra land for a swimming pool or place for their children to play. I think it much more likely that they are planning a rather large hotel as the land has superb views to one of the most attractive fortified churches, with hills beyond. Property prices worldwide may not be looking healthy, but here in Romania something that could be bought for Eur 10-15,000 a year ago is now virtually unobtainable at Eur 30,000.
If all else fails at least that will be something to fall back on.....
Sunday, October 12, 2008
A true trader
"Nightmare times with huge selling pressure, a vicious downward vortex, badly advised politicians, massive regulation to come and a backward step for innovation and enterprise.
Let's hope we can do well out of this"
This is the message I got from a money manager.
Has to be the right attitude. I will repeat, this could be the once in a lifetime opportunity for us all - those with a bit of cash and what used to be called " bottom"*.
* = fundamental character; staying power .
BUY
Let's hope we can do well out of this"
This is the message I got from a money manager.
Has to be the right attitude. I will repeat, this could be the once in a lifetime opportunity for us all - those with a bit of cash and what used to be called " bottom"*.
* = fundamental character; staying power .
BUY
Saturday, October 11, 2008
Sou'side Bloggers
Apparently, somehow, the local community newspaper has managed to pick up on this blog.
So here's the link.
So here's the link.
An interesting exercise
We are having some people for dinner tonight and as always there was the debate about what to give them.
Mrs. Lear - now working hard on her eco-land management degree - came up with a brilliant idea.
There is a farm shop on the campus ( as its an agricultural college covering over 2000 acres they have lots of stuff for sale all year round). So why not source the entire meal from the shop?
Starter : Melted goats cheese on salad
Main course : venison stew with onions and carrots, accompanied by mashed potatoes and cabbage.
Dessert: Tarte tatin
Cheese.
Dinner for 6 for £37 and it all came from the shop and it is all organic and looks seriously good.
Apart from the lumps of earth on anything that grows that always seem to accompany such produce.
Adds to the weight you pay for of course.
Mrs. Lear - now working hard on her eco-land management degree - came up with a brilliant idea.
There is a farm shop on the campus ( as its an agricultural college covering over 2000 acres they have lots of stuff for sale all year round). So why not source the entire meal from the shop?
Starter : Melted goats cheese on salad
Main course : venison stew with onions and carrots, accompanied by mashed potatoes and cabbage.
Dessert: Tarte tatin
Cheese.
Dinner for 6 for £37 and it all came from the shop and it is all organic and looks seriously good.
Apart from the lumps of earth on anything that grows that always seem to accompany such produce.
Adds to the weight you pay for of course.
Friday, October 10, 2008
Volatility & Volume
If today on Wall Street is anything to go by, I'm right about the bottom. OK its marginally lower than I thought but the Dow traded in a range of 1100 points, at one point over 700 points down then up nearly 400, with the third highest number of shares ever traded.
Typically, huge volume churns with wild swings up and down have marked the bottom - or very close to it. The volatility index is at its highest ever - but very similar to when the bottom was reached in 2002.
I'm not for one second suggesting it will be back at 14000 anytime soom - but it WILL get back there. If you care to have a look at the chart and the notes, the really spooky thing is the October 9th Date ( I know todays the 10th but hey)
2002 - Dow post 9/11 low at 7286
2007 - Dow highest ever 14164
2008 - Dow returns to 1998 levels.
And I won't mention 1987 because that was October 19th - biggest percentage one day fall ever of 23%. But the biggest one day points fall was 30th September 2008 - 778
Keep your rabbits foot handy in future between the end of September and beginning of November.
PS
Actually its not that easy to buy stock. The MMs got rid of theirs long ago and are effectively short - so if you want to buy, up goes the price - which is roughly what happened in the States with the huge swing.
PPS
Someone has suggested to me that the reason for keeping the rabbit's foot handy is that if things get much worse we might need to eat it.
Typically, huge volume churns with wild swings up and down have marked the bottom - or very close to it. The volatility index is at its highest ever - but very similar to when the bottom was reached in 2002.
I'm not for one second suggesting it will be back at 14000 anytime soom - but it WILL get back there. If you care to have a look at the chart and the notes, the really spooky thing is the October 9th Date ( I know todays the 10th but hey)
2002 - Dow post 9/11 low at 7286
2007 - Dow highest ever 14164
2008 - Dow returns to 1998 levels.
And I won't mention 1987 because that was October 19th - biggest percentage one day fall ever of 23%. But the biggest one day points fall was 30th September 2008 - 778
Keep your rabbits foot handy in future between the end of September and beginning of November.
PS
Actually its not that easy to buy stock. The MMs got rid of theirs long ago and are effectively short - so if you want to buy, up goes the price - which is roughly what happened in the States with the huge swing.
PPS
Someone has suggested to me that the reason for keeping the rabbit's foot handy is that if things get much worse we might need to eat it.
Lehman's CDs Part 2
OUCH! The settlement just cost approx. $367 BILLION.
That means that collectively the people who insured these have to pay this money to those who bought the insurance.
Now in fact, in aggregate, this is a zero sum game - those who bought insurance get the cash and those who sold it lose the cash.
The problem, of course, is where someone doesn't have the oh lets say about $1billion, so they go bankrupt - which means their counterparty is down $1billion which might put them into liquidation. And so on.
What's quite sure is no bank is going to lend any other bank or counterparty any money until the reverberations have died down in a few weeks.
They really need a clearing house so these things can be offset.
Otherwise we really are in the Ice Age.
PS
That just reminds me of the book of the same name by Margaret Drabble. It harks back to the 1974/5 debacle. A beleaguered property developer can't sell anything and the bank won't help ( so what's new?) his marriage falls apart etc etc etc. One of the sites they owned, a gasometer, attracts him strangely with its brooding bulk and silence. He feels most attached to it.
At the very nadir of events, he is suddenly offered a price for the site, and he takes a long last sad look at it.
But the gasometer has befriended him and looked after him, and pulled him through. Excellent story, excellently written.
That means that collectively the people who insured these have to pay this money to those who bought the insurance.
Now in fact, in aggregate, this is a zero sum game - those who bought insurance get the cash and those who sold it lose the cash.
The problem, of course, is where someone doesn't have the oh lets say about $1billion, so they go bankrupt - which means their counterparty is down $1billion which might put them into liquidation. And so on.
What's quite sure is no bank is going to lend any other bank or counterparty any money until the reverberations have died down in a few weeks.
They really need a clearing house so these things can be offset.
Otherwise we really are in the Ice Age.
PS
That just reminds me of the book of the same name by Margaret Drabble. It harks back to the 1974/5 debacle. A beleaguered property developer can't sell anything and the bank won't help ( so what's new?) his marriage falls apart etc etc etc. One of the sites they owned, a gasometer, attracts him strangely with its brooding bulk and silence. He feels most attached to it.
At the very nadir of events, he is suddenly offered a price for the site, and he takes a long last sad look at it.
But the gasometer has befriended him and looked after him, and pulled him through. Excellent story, excellently written.
Icelandic Banks again
I just spotted this about Icelandic Banks. In essence, Government Ministers were asked about deposit guarantees months ago, and even state that Icelandic Banks are safe.
Shows how much they know.
Shows how much they know.
British Government cited for Fraud
Just had a call from Barclaycard, wanting to verify a card transaction.
It was for companies house for online filing.
The most polite young lady took me through all the security, then said :
" Ve are suspecting this transaction - it saysCompanies House UK Gov."
Clearly snake oil sellers.
It was for companies house for online filing.
The most polite young lady took me through all the security, then said :
" Ve are suspecting this transaction - it saysCompanies House UK Gov."
Clearly snake oil sellers.
Doing what comes naturally.
I just love this story. Two monkeys, both sad and lonely, start to bond.
Then things progress and hey presto! baby monkeys.
I do like a happy ending.
Then things progress and hey presto! baby monkeys.
I do like a happy ending.
Lehman's CDs
Guido has a good bit on this. He is soooo right.
The banks need all their cash to cover this one. It looks as is the pain will be broadly distributed - but if you're retiring soon, forget the last projections you saw for your pension.They will be down about 40% next time you look.
On the other hand, in theory it should all balance out and if Fannie and Freddie are anything to go by it might go without too many hitches.
Maybe.
The banks need all their cash to cover this one. It looks as is the pain will be broadly distributed - but if you're retiring soon, forget the last projections you saw for your pension.They will be down about 40% next time you look.
On the other hand, in theory it should all balance out and if Fannie and Freddie are anything to go by it might go without too many hitches.
Maybe.
Got it slightly wrong
I apologise for the mistake - the bottom wasn't 4250, it was about 3800 but now at 10am its about 4100.
I still say this is a superb opportunity for those with a little cash and guts.
Mrs. Lear asked me this morning what I was doing about it.
I replied that as I was offically now a senior citizen, I was retired.
Somewhat.
I still say this is a superb opportunity for those with a little cash and guts.
Mrs. Lear asked me this morning what I was doing about it.
I replied that as I was offically now a senior citizen, I was retired.
Somewhat.
Wednesday, October 08, 2008
This is perhaps the most disgraceful thing about this Government
Icelandic banks have been taking wodges of cash from UK citizens for years.
Now it transpires that - in total contradiction to International Banking protocols -
the Icelandic Government & Central Bank won't cover them. And , er, it transpires our own FSA hasn't checked any of it because er, its part of an EU piggyback. And , er, the EU isn't coughing up either.
In other words, if you have money in eg Icesave, a) you can't get it out and b) you will need to claim compensation from that nice Mr. Darling - which may take some time. Unless ING simply hand it out willy-nilly.
I suspect you won't get the interest you thought you were going to get and I'm willing to bet that - as always with these sort of things - the records are in a bit of a mess, so I'm really really sorry but you will have to wait.
Jonah's really done it this time hasn't he?
PS
And Councils and Transport for London have given them money as well! Are they collectively mad?
Now it transpires that - in total contradiction to International Banking protocols -
the Icelandic Government & Central Bank won't cover them. And , er, it transpires our own FSA hasn't checked any of it because er, its part of an EU piggyback. And , er, the EU isn't coughing up either.
In other words, if you have money in eg Icesave, a) you can't get it out and b) you will need to claim compensation from that nice Mr. Darling - which may take some time. Unless ING simply hand it out willy-nilly.
I suspect you won't get the interest you thought you were going to get and I'm willing to bet that - as always with these sort of things - the records are in a bit of a mess, so I'm really really sorry but you will have to wait.
Jonah's really done it this time hasn't he?
PS
And Councils and Transport for London have given them money as well! Are they collectively mad?
Bottoming out.
Just in from Nasdaq.com:"Just reported, August pending home sales rose 7.4% month-over-month on a seasonally adjusted annual rate, compared to the expected decline of 1.3%. Pending home sales were down 2.7% in July. Pending sales are up 8.8% compared to last year. The pending home sales report is released by the National Association of Realtors and is based on signed real estate contracts for existing single family homes, condos and co-ops."
In other words people in the US are now seeing value in property, so it "should" be bottoming out.
In other words people in the US are now seeing value in property, so it "should" be bottoming out.
At last!
Finally, everyone has woken up to the fact that
a) They all have to pull in the same direction
b) Sticking plaster is no good when amputation is required
and c) it certainly isn't over yet.
This is, to paraphrase Churchill, not the beginning of the end, but it might just be the end of the beginning.
My own view is that the next year or so could be that once in a lifetime opportunity that we all long for.
I doubt assets will be able to be bought as cheaply in the years to come. My own chance was in 1974/5, but, of course, as a young married man I had no money and I was too busy with my own business to raise my eyes to the bigger picture. The difficulty will, as ever, be separating the wheat from the chaff, and in getting the money to make it work.
But it will happen.
Just don't hold your breath.
PS
It remains to be seen how on earth all this is actually going to be paid for. It certainly makes Brown's Golden Rule look utterly ridiculous.
a) They all have to pull in the same direction
b) Sticking plaster is no good when amputation is required
and c) it certainly isn't over yet.
This is, to paraphrase Churchill, not the beginning of the end, but it might just be the end of the beginning.
My own view is that the next year or so could be that once in a lifetime opportunity that we all long for.
I doubt assets will be able to be bought as cheaply in the years to come. My own chance was in 1974/5, but, of course, as a young married man I had no money and I was too busy with my own business to raise my eyes to the bigger picture. The difficulty will, as ever, be separating the wheat from the chaff, and in getting the money to make it work.
But it will happen.
Just don't hold your breath.
PS
It remains to be seen how on earth all this is actually going to be paid for. It certainly makes Brown's Golden Rule look utterly ridiculous.
Tuesday, October 07, 2008
Just a feeling
I have a twitch in my nose that tells me we are about at the bottom.
Not of the housing crash of course - that has a long way and a long time to go yet-but the banking and stockmarket turmoil may be close to achieving some kind of equilibrium.
As Guido has rightly pointed out banning short sales has actually made matters worse if anything.
It does slightly beg the question what all the hedge funds are going to do for an encore...
Not of the housing crash of course - that has a long way and a long time to go yet-but the banking and stockmarket turmoil may be close to achieving some kind of equilibrium.
As Guido has rightly pointed out banning short sales has actually made matters worse if anything.
It does slightly beg the question what all the hedge funds are going to do for an encore...
Country upgrades
Fitch ( a ratings agency) has upgraded the Republics of Komi & of Karelia. Komi is 70% forests and 15% swamps.Karelia is 85% forest and about 5% lakes/swamps/rivers.
I assume that wood and fresh water are becoming more valuable. Winchester Whisperer is very into water at the moment -perhaps an area for investigation?
I assume that wood and fresh water are becoming more valuable. Winchester Whisperer is very into water at the moment -perhaps an area for investigation?
Fannie's good
Actually, it's Fannie and Freddie - their swaps ( about $500 billion) went well yesterday.
Now if only the $400 odd billion of Lehman's go as well later in the week.......
IF..
Now if only the $400 odd billion of Lehman's go as well later in the week.......
IF..
Monday, October 06, 2008
Only another couple of percent...
..and the FTSE will be around the 4250 I suggested as a buying level. The same applies to the Dow to get to 9500. We're nearly there. Capitulation has started. Bolton and Buffett have both started buying ( they can afford to) so in a very short while it will stabilise - and hopefully move up thereafter.
I hope.
I hope.
Blame everyone - except me
You may have noticed that I have blamed both Bill Clinton and the EU for the present utter debacle.
In fact, everyone is running round blaming everyone else, and trying to exonerate themselves.
I think it's worth noting though, that despite being connected, Clinton and the EU bear different reponsibility.
Clinton's administration put in place the problem with the mortgages. In itself, even $1 trillion of mortages being in bother wouldn't normally be the end of the world. Just write off $500 billion ( which the banks have done) and you have something remaining which quite possibly might make you a fortune.
What has created the present disaster is the requirement to mark to market. So if you have say $10billion in mortgages in whatever guise, and the underlying assets are say 41% DOWN as they are in California in the last year, then in practice you have to write off $4billion odd.
The problem is these are unsellable at the moment - so their value is effectively zero. So instead of a $4billion write off you have a $10 billion write off.
Even very very big banks can't write off many billions without eroding their capital bases enormously. And they have to do it every day by close of business.
Unless there is a suspension of the mark to market requirement, not only won't there be any banking system left, there won't be any banks left.
Don't want to worry you or anything.....
In fact, everyone is running round blaming everyone else, and trying to exonerate themselves.
I think it's worth noting though, that despite being connected, Clinton and the EU bear different reponsibility.
Clinton's administration put in place the problem with the mortgages. In itself, even $1 trillion of mortages being in bother wouldn't normally be the end of the world. Just write off $500 billion ( which the banks have done) and you have something remaining which quite possibly might make you a fortune.
What has created the present disaster is the requirement to mark to market. So if you have say $10billion in mortgages in whatever guise, and the underlying assets are say 41% DOWN as they are in California in the last year, then in practice you have to write off $4billion odd.
The problem is these are unsellable at the moment - so their value is effectively zero. So instead of a $4billion write off you have a $10 billion write off.
Even very very big banks can't write off many billions without eroding their capital bases enormously. And they have to do it every day by close of business.
Unless there is a suspension of the mark to market requirement, not only won't there be any banking system left, there won't be any banks left.
Don't want to worry you or anything.....
Sunday, October 05, 2008
Blame the EU banking rules
Christopher Booker in today's Sunday Telegraph points out that the " mark to market" rules brought in under Basel 2 for banks have effectively destroyed every banks' assets. When there is no market, the value drops technically to zero.
What you have is solvent banks without any ability to borrow or lend - which is what we have at the moment. According to various sources, the German Government has guaranteed all private savings, and , as the sainted Robert Peston says on the BBC news, " If they really have done this then the UK will have to follow suit."
So much for EU members pulling together.
Maybe now our incredibly naive and stupid government will realise that our EU partners only implement the bits that suit them - unlike ourselves.
Unless there is some clarity before tomorrow morning, the markets will disappear through a hole in the floor. There is already talk of Barclays charging small businesses 15% for money - whether they already have it agreed or not - and just see how long a cheque now takes to clear fully into your account.
UPDATE.
FTSE opened approx 5% down
What you have is solvent banks without any ability to borrow or lend - which is what we have at the moment. According to various sources, the German Government has guaranteed all private savings, and , as the sainted Robert Peston says on the BBC news, " If they really have done this then the UK will have to follow suit."
So much for EU members pulling together.
Maybe now our incredibly naive and stupid government will realise that our EU partners only implement the bits that suit them - unlike ourselves.
Unless there is some clarity before tomorrow morning, the markets will disappear through a hole in the floor. There is already talk of Barclays charging small businesses 15% for money - whether they already have it agreed or not - and just see how long a cheque now takes to clear fully into your account.
UPDATE.
FTSE opened approx 5% down
Which psychic...
...dot com is a domain we own.
I have been fascinated to watch its traffic slowly increase over the last couple of weeks, as the credit crunch has bitten deeper and deeper.
Suddenly today, not only has the traffic jumped but so have the clickthroughs.
I can only suggest Ben and Hank, Alistair and Jean-Claude are trying to find the answers.....
I have been fascinated to watch its traffic slowly increase over the last couple of weeks, as the credit crunch has bitten deeper and deeper.
Suddenly today, not only has the traffic jumped but so have the clickthroughs.
I can only suggest Ben and Hank, Alistair and Jean-Claude are trying to find the answers.....
Tim Fortescue
I missed the obituary of Trevor Fortescue - always known as Tim. His school masters had always referred to him as Weary Tim and the name stuck.
I knew him best when he was working for Nestle in Vevey, and was a frequenter of their chaotic household, overseen by his first wife Marjorie, whose culinary skills were somewhat challenged. Her Garbage Soup was definitely an acquired taste, and her younger son, when in our house and offered scrambled egg, demanded to know where the black bits were.
Tim was the essence of the patrician English Gentleman. Polite and thinking in leaps and dives, he was always good company. That he was given substantial obits in three national newspapers ( The Guardian and The Times as well) merely emphasises his position.
It speaks volumes that he was the MP for Liverpool Garston, a Labour/Conservative marginal, and which is now firmly Labour. An extremely able and astute man, we lost touch after he divorced and remarried.
RIP
I knew him best when he was working for Nestle in Vevey, and was a frequenter of their chaotic household, overseen by his first wife Marjorie, whose culinary skills were somewhat challenged. Her Garbage Soup was definitely an acquired taste, and her younger son, when in our house and offered scrambled egg, demanded to know where the black bits were.
Tim was the essence of the patrician English Gentleman. Polite and thinking in leaps and dives, he was always good company. That he was given substantial obits in three national newspapers ( The Guardian and The Times as well) merely emphasises his position.
It speaks volumes that he was the MP for Liverpool Garston, a Labour/Conservative marginal, and which is now firmly Labour. An extremely able and astute man, we lost touch after he divorced and remarried.
RIP
Saturday, October 04, 2008
Blame Clinton for this mess.
I've just read a most illuminating article that I missed earlier in the week in Coffee House. Iain Dale drew it to my attention.
It is quite long, but the thrust of it is that because the Democrats in the shape of Bill Clinton came in in 1992, their positive racial discrimination led to lots of poor white, black and Hispanic people in the States getting mortgages. In effect, the new rules laid down meant not only 100% mortgages but significantly higher loan to earnings offers.
That was fine for a few years. Unfortunately, poor Americans are worse off now than they were then - their earnings have declined in relative terms. So, strapped for cash, they remortgaged say 7 years ago, and then again 2 or 3 years ago against the equity in the house. Unfortunately again, they were no longer remotely able to meet the payments - and the equity was gone, and now has become negative.
I have to say I had long wondered how it all became quite so dire, but this explains it. In effect, the Clinton Administration forced Banks and mortgage companies to abandon what might be described as prudent banking in pursuit of a chimera - everyone must own a house.
This is patently absurd. Most people can manage to make regular payments - but many can't. Whether we like it or not, Capitalism's way of dealing with a loan is to make regular payments.
So, as the article says, don't blame the Republicans. Blame the Democrats and their Politically Correct views that have now destroyed America's banking system.
As ever, Government interference destroys, rather than creates.
It is quite long, but the thrust of it is that because the Democrats in the shape of Bill Clinton came in in 1992, their positive racial discrimination led to lots of poor white, black and Hispanic people in the States getting mortgages. In effect, the new rules laid down meant not only 100% mortgages but significantly higher loan to earnings offers.
That was fine for a few years. Unfortunately, poor Americans are worse off now than they were then - their earnings have declined in relative terms. So, strapped for cash, they remortgaged say 7 years ago, and then again 2 or 3 years ago against the equity in the house. Unfortunately again, they were no longer remotely able to meet the payments - and the equity was gone, and now has become negative.
I have to say I had long wondered how it all became quite so dire, but this explains it. In effect, the Clinton Administration forced Banks and mortgage companies to abandon what might be described as prudent banking in pursuit of a chimera - everyone must own a house.
This is patently absurd. Most people can manage to make regular payments - but many can't. Whether we like it or not, Capitalism's way of dealing with a loan is to make regular payments.
So, as the article says, don't blame the Republicans. Blame the Democrats and their Politically Correct views that have now destroyed America's banking system.
As ever, Government interference destroys, rather than creates.
Friday, October 03, 2008
Mrs. Lear's first day at University
Mrs. Lear has gone back to Uni to study eco-land management.
She is doing this at a place called Auchincruive, from whence many years ago I used to buy all manner of vegetables and salad stuffs for the Fruit Market.
So today was enrollment, and off she toddled down the road to register.
I won't bore you with too many details, apart from the contents of the goody bag handed out to all students.
A diary and some sweeties.
A stress ball and a list of do's and don'ts for students.
A Tunnocks Caramel Wafer - an icon of Scotland's culinary firmament.
And finally, two condoms.
Of a brand I'd never heard.
Makes one almost long for those days again....
She is doing this at a place called Auchincruive, from whence many years ago I used to buy all manner of vegetables and salad stuffs for the Fruit Market.
So today was enrollment, and off she toddled down the road to register.
I won't bore you with too many details, apart from the contents of the goody bag handed out to all students.
A diary and some sweeties.
A stress ball and a list of do's and don'ts for students.
A Tunnocks Caramel Wafer - an icon of Scotland's culinary firmament.
And finally, two condoms.
Of a brand I'd never heard.
Makes one almost long for those days again....
Total despair
I cannot believe Mandelson is coming back. The epitome of lying conniving twisted politicians is being allowed to strut the stage once more.
Surely the British people are not SO stupid as to think this is clever or a good move?
UPDATE
I should have known. The Daily Record, Scotland's Daily Mirror, praised the appointment in its leader as " terrifying the Tory Toffs" or words to that effect, and praising Brown for leading the fight against world financial panic. I think they mean his statements that " Er, yes well, we will do everything necessary" Except he isn't.
Surely the British people are not SO stupid as to think this is clever or a good move?
UPDATE
I should have known. The Daily Record, Scotland's Daily Mirror, praised the appointment in its leader as " terrifying the Tory Toffs" or words to that effect, and praising Brown for leading the fight against world financial panic. I think they mean his statements that " Er, yes well, we will do everything necessary" Except he isn't.
Thursday, October 02, 2008
It's an ill wind...
The present credit crunch is having a most salutary effect, as far as I can see, on people's spending habits, and their saving habits too.
I had two people lined up to take up some property in Romania, and they both withdrew. I don't blame them. I probably would too if I hadn't been out there ( which neither of them have).
More interestingly, the drop in food sales hopefully presages a more commonsense approach to food ( don't throw so much away) and the news that Northern Rock has withdrawn some of its savings offers because they have been inundated with cash, says more about UK2008 than any survey.
I was in the Glasgow office of HSBC today. The reason I was there was because there have been lots of posters all around Glasgow, roughly saying that HSBC wants your business account - and is prepared to do quite a lot to get it.
The office was completely mobbed with people trying to fix up mortgages. They had extra staff on just screening out the no-hopers and handing out forms that needed completing before any interview could be granted.
Fortunately, I had an appointment with their business manager, who was not only affable, but also helpful.
I'm looking for development finance for the domain names business, with a view to developing a mega-site which will attract lots of people and earn lots of money. The problem is it will cost quite a lot to develop. I am a great advocate of Other People's Money making me rich and them a modest return.
Astonishingly, he was really enthusiastic as I showed him some of the things we do. It transpired that, as a Bank, they are largely funded by deposits and trading companies in the East ( Their real name of course is Hong Kong and Shanghai Bank Corporation and founded by a Scot) and are looking to spread their loans into different areas, not only of the globe, but of businesses). Their deposits have apparently rocketed in the past few weeks - so much so that they can't actually give a return on lots of them ( they won't lend huge chunks to other banks, so its down to getting lots of people like me on board. Mortgages? No problem - as long as you have 25% to put down ( as it always used to be. ) Oh, and no interest only - capital and interest only.
Sigh. How nice to talk to an old-fashioned banker.
Of course, their guiding light was a Scot, Willie Purves, who set in tablets of stone how HSBC would do business. No one has ever dared to question it - even though he retired 10 years ago.
I had two people lined up to take up some property in Romania, and they both withdrew. I don't blame them. I probably would too if I hadn't been out there ( which neither of them have).
More interestingly, the drop in food sales hopefully presages a more commonsense approach to food ( don't throw so much away) and the news that Northern Rock has withdrawn some of its savings offers because they have been inundated with cash, says more about UK2008 than any survey.
I was in the Glasgow office of HSBC today. The reason I was there was because there have been lots of posters all around Glasgow, roughly saying that HSBC wants your business account - and is prepared to do quite a lot to get it.
The office was completely mobbed with people trying to fix up mortgages. They had extra staff on just screening out the no-hopers and handing out forms that needed completing before any interview could be granted.
Fortunately, I had an appointment with their business manager, who was not only affable, but also helpful.
I'm looking for development finance for the domain names business, with a view to developing a mega-site which will attract lots of people and earn lots of money. The problem is it will cost quite a lot to develop. I am a great advocate of Other People's Money making me rich and them a modest return.
Astonishingly, he was really enthusiastic as I showed him some of the things we do. It transpired that, as a Bank, they are largely funded by deposits and trading companies in the East ( Their real name of course is Hong Kong and Shanghai Bank Corporation and founded by a Scot) and are looking to spread their loans into different areas, not only of the globe, but of businesses). Their deposits have apparently rocketed in the past few weeks - so much so that they can't actually give a return on lots of them ( they won't lend huge chunks to other banks, so its down to getting lots of people like me on board. Mortgages? No problem - as long as you have 25% to put down ( as it always used to be. ) Oh, and no interest only - capital and interest only.
Sigh. How nice to talk to an old-fashioned banker.
Of course, their guiding light was a Scot, Willie Purves, who set in tablets of stone how HSBC would do business. No one has ever dared to question it - even though he retired 10 years ago.
Wednesday, October 01, 2008
First catch your pig...
I've spent the last two days looking at some of the things that LAGs ( Leader action Groups) have done in Scotland. The idea was that I would be able to take some of their ideas back to Romania.
Unfortunately, the problems here are not the problems there.
I would mention three projects in particular.
The first was an inter-village bus service. They already exist in Romania - it's the only way for most people to travel about, so the buses are mostly full and are therefore cheap & frequent.
The second was a sort of pig experience. Not quite a city farm, money had been given so that children could find out about pigs. Romanians would laugh at this. Every family - even most of those that live in the city - have a pig stashed away somewhere.
Finally, one that just might get the nod. A project was put together to have horse riding trails marked out, with specified stops for overnight accommodation, both for riders and horses. Romania could do with this from a tourism point of view, but at the moment there are so many other things that need doing, I think it unlikely this will get done in the short term.
You never know, though.
Unfortunately, the problems here are not the problems there.
I would mention three projects in particular.
The first was an inter-village bus service. They already exist in Romania - it's the only way for most people to travel about, so the buses are mostly full and are therefore cheap & frequent.
The second was a sort of pig experience. Not quite a city farm, money had been given so that children could find out about pigs. Romanians would laugh at this. Every family - even most of those that live in the city - have a pig stashed away somewhere.
Finally, one that just might get the nod. A project was put together to have horse riding trails marked out, with specified stops for overnight accommodation, both for riders and horses. Romania could do with this from a tourism point of view, but at the moment there are so many other things that need doing, I think it unlikely this will get done in the short term.
You never know, though.
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