Apparently, it is the Republican caucus, which is holding up the $700bn rescue package in the United States for the banks. I wonder what British independent financial advisers (IFAs) could recommend in these troubled times.
www.searchifa.co.uk
Frances Kemp of Knowlden Titlow Financial Services Ltd gives an excellent review of the collapse of U.S investment bank Lehman Brothers.
It is sad that HSBC is cutting jobs, especially back-office ones. They were'nt the ones responsible for investment decisions in areas such as mortgage-backed securities.
Friday 26 September 2008
Monday 22 September 2008
Alistair Blair reviews the Lehman affair in the Investors Chronicle.
The excellent financial commentator Alistair Blair takes a look at the collapse of U.S investment bank Lehman Brothers in the Investors Chronicle. He notes that the $22bn balance sheet was overwhelmed by "so much toxic rubbish being generated in the mortgage financing".
The shareholder funds of $22bn had to support assets of $670bn.
www.searchifa.co.uk
Blair also noted that the Lehman average pay per employee was $330,000 and totalled $9bn a year.
Ages ago I read a couple of books on American investor Warren Buffett, who emphasised the importance of investing in things you understand. I suppose the financial situation of U.S investment banks is not that clear. Buffett has for the past few years described derivatives as "financial weapons of mass destruction". The investor from Omaha (Nebraska) has made money by investing in stocks such as Coca-Cola and reinvesting the dividends over long periods and really benefitted from compound interest.
The shareholder funds of $22bn had to support assets of $670bn.
www.searchifa.co.uk
Blair also noted that the Lehman average pay per employee was $330,000 and totalled $9bn a year.
Ages ago I read a couple of books on American investor Warren Buffett, who emphasised the importance of investing in things you understand. I suppose the financial situation of U.S investment banks is not that clear. Buffett has for the past few years described derivatives as "financial weapons of mass destruction". The investor from Omaha (Nebraska) has made money by investing in stocks such as Coca-Cola and reinvesting the dividends over long periods and really benefitted from compound interest.
Wednesday 17 September 2008
Is Bank of England governor holding up recovery of mortgage market?
I wonder if central banker Mervyn King is holding up the recovery of the mortgage market in Britain. In August moneymarketing.co.uk reported that King's
"heavy-handed rejection of proposals to help the mortgage market floated by Sir James Crosby shows there is little consensus on what needs to be done in the homeloan sector".
The Bank of England governor does not want any type of guarantee as far as lending is concerned and thinks the UK mortgage market will recover on its own accord. However, this approach has been criticsed by Wave Lending chief executive Colin Snowdon, who describes the governor as an economist first, a banker second.
Linda Will, of West Country building society Stroud and Swindon, says the problem is the financial authorities are undecided on what to do and there are major divisions between themselves.
Sir James Crosby is the former boss of HBOS (Halifax Bank of Scotland), which could be swallowed up by Lloyds TSB. HBOS has 20 pct of the UK mortgage market but in terms of new lending institutions such as Banco Santander unit Abbey National have been growing fast.
The UK mortgage market will probably recover naturally and the lenders will start lending if the spectre of negative equity falls away. I think the government might have to give a helping hand to the housebuilders, whose share prices have been shot to pieces.
"heavy-handed rejection of proposals to help the mortgage market floated by Sir James Crosby shows there is little consensus on what needs to be done in the homeloan sector".
The Bank of England governor does not want any type of guarantee as far as lending is concerned and thinks the UK mortgage market will recover on its own accord. However, this approach has been criticsed by Wave Lending chief executive Colin Snowdon, who describes the governor as an economist first, a banker second.
Linda Will, of West Country building society Stroud and Swindon, says the problem is the financial authorities are undecided on what to do and there are major divisions between themselves.
Sir James Crosby is the former boss of HBOS (Halifax Bank of Scotland), which could be swallowed up by Lloyds TSB. HBOS has 20 pct of the UK mortgage market but in terms of new lending institutions such as Banco Santander unit Abbey National have been growing fast.
The UK mortgage market will probably recover naturally and the lenders will start lending if the spectre of negative equity falls away. I think the government might have to give a helping hand to the housebuilders, whose share prices have been shot to pieces.
Tuesday 16 September 2008
Bank of England governor - No pain, no gain.
The Bank of England governor, Mervyn King, has not said the phrase "no pain, no gain" but he is pretty adamant in his opposition to any plans by the UK government to prop up the mortgage market. I read in moneymarketing.co.uk one description of Mr King, which said the Aston Villa fan
was a purist and was not a pragmatic economist.
Some parts of the mortgage market continues to operate. If you are creditworthy, then you will still receive credit. However, it looks like there are real problems at the first-time buyer level, which obviously hits chains.
In recent memory building societies ran a cartel while rationing housing loans. Such things were dismantled in the Thatcherite revolution but remarkably banks and building socities can still move together in the United Kingdom. They all seemed to raise their required deposits at the same time and at the same level. Or was that my mistaken impression?
If the Bank of England governor has his way, there will probably be a slow recovery.
UK Chancellor Alistair Darling wants any recovery to be quicker and it will be interesting to see how far he ignores Mr King.
www.searchifa.co.uk
was a purist and was not a pragmatic economist.
Some parts of the mortgage market continues to operate. If you are creditworthy, then you will still receive credit. However, it looks like there are real problems at the first-time buyer level, which obviously hits chains.
In recent memory building societies ran a cartel while rationing housing loans. Such things were dismantled in the Thatcherite revolution but remarkably banks and building socities can still move together in the United Kingdom. They all seemed to raise their required deposits at the same time and at the same level. Or was that my mistaken impression?
If the Bank of England governor has his way, there will probably be a slow recovery.
UK Chancellor Alistair Darling wants any recovery to be quicker and it will be interesting to see how far he ignores Mr King.
www.searchifa.co.uk
Monday 15 September 2008
moneymarketing.co.uk profiles IFP ceo Nick Cann
moneymarketing.co.uk has profiled the chief executive of the Institute of Financial Planning (IFP), Mr Nick Cann. The executive is hoping to achieve a target of 2,500 certified financial planners within three years. Mr Cann was surprised to be approached by the IFP since he came from a sales/marketing/business development background. The Oxford Polytechnic graduate worked at Barclays Bank and Robert Fleming/Save and Prosper.
moneymarketing.co.uk notes that "Cann has introduced a number of initiatives to raise the profile and reach of financial planning". While the IFP ceo notes that more firms are looking at advanced qualifications.
The first Financial Planning Week was started and this ran from September 8th to
14th.
moneymarketing.co.uk notes that "Cann has introduced a number of initiatives to raise the profile and reach of financial planning". While the IFP ceo notes that more firms are looking at advanced qualifications.
The first Financial Planning Week was started and this ran from September 8th to
14th.
Thursday 11 September 2008
Will Alistair Darling rescue the mortgage market?
Will British Chancellor Alistair Darling rescue the mortgage market? The Bank of England governor Mervyn King wants the market to recover naturally and does not want any form of state guarantee or help for borrowers. Mr King is insisting that the lenders should still retain the risk of their mortgage loans.
Some observers consider that the Bank of England governor is being too much of a purist and should be more pragmatic.
www.searchifa.co.uk
Postscript: with me writing in September 2009 Darling is still Chancellor, which seems a minor miracle, since he is more or less ignoring the instructions of Prime Minister Gordon Brown. Darling wants to be a bit more upfront on forthcoming spending cuts from 2010. However, he could help the mortgage market, which has shown signs of recovery, if he reduce stamp duty rates.
Mervyn King is still Governor of the Bank of England, which is another source of wonderment. He must be surprised that the UK banks seem to be making efforts not to
repossess at the first possible moment. I think the banks should be congratulated for these efforts to keep down residential repossessions.
Some observers consider that the Bank of England governor is being too much of a purist and should be more pragmatic.
www.searchifa.co.uk
Postscript: with me writing in September 2009 Darling is still Chancellor, which seems a minor miracle, since he is more or less ignoring the instructions of Prime Minister Gordon Brown. Darling wants to be a bit more upfront on forthcoming spending cuts from 2010. However, he could help the mortgage market, which has shown signs of recovery, if he reduce stamp duty rates.
Mervyn King is still Governor of the Bank of England, which is another source of wonderment. He must be surprised that the UK banks seem to be making efforts not to
repossess at the first possible moment. I think the banks should be congratulated for these efforts to keep down residential repossessions.
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