Bank of England governor can still move markets.

A speech in Leeds last night proved that Mervyn King can still move markets. Today,
sterling was down 4 per cent against the dollar. This was in response to the Bank of England governor saying that the UK economy was entering recession. If I was the governor I would try and talk things up since it might make things better. There is no point in trying to wish for a deep recession.
www.searchifa.co.uk
Most IFAs be wondering if they have the client base to survive. Mortgage brokers have been badly hit as property transactions have come down. They have been in recession for quite a long time. Apparently, the recovery will come in 2010.
In Newmarket, Suffolk, Frank C Barker offers advice in areas such as lump sum investments and income protection. I wish I had a lump sum to invest, although the traditional arena of the stock market looks very risky. However, the world does not stop completely and people have sums on deposit where they are looking for a better return.

I expect IFAs are shell-shocked over recent events.

I read in moneymarketing.co.uk that levies on British IFAs could increase due to the nationalisation of Bradford and Bingley. The Spanish bank Banco Santander bought the savings and branch network while the UK government ended up with the mortgages.
Bradford and Bingley had a major business with the buy-to-let sector.
www.searchifa.co.uk

Panic selling hits UK stock market.

The view was that equities were the good long-term bet in comparison with bonds and cash. However, this week's falls in the London stock market has shown how risky shares are. One view is that the stock market is pricing in a depression. I don't know how the Royal Bank of Scotland got marked down to 79 pence at one point today. This is a massive bank and one which would benefit from the UK government bailout if it wants to. It does not bear thinking about if RBS has to be rescued by the government, although some sections of the population in Scotland would be delighted to have a Scottish state bank.
I think pro-Independence supporters had counted on a vibrant financial services scene in Edinburgh, which has been badly affected by the recent market turbulence.
www.searchifa.co.uk

Another bad day for the UK bank stocks.

Today (October 7th, 2008) has been another bad day for the UK bank stocks with some of the major banks denying that they asked the British Treasury for money. It looks like there is going to be some recapitalisation although opponents of nationalisation or partial nationalisation say the banks should look for merger/sale deals with stronger partners. Anyone for Abu Dhabi? I wonder what the government would think if the Qataris swallowed up Barclays.
Looking back at an old copy of moneymarketing.co.uk for July, there is an interesting article by Mark Dampier, head of research at Hargreaves Lansdown. He notes then that bank stocks were already down 44.9 pct for the year. Dampier also emphasises the importance of the housing market, since it employs directly and indirectly millions of people. However, the housing market will continue to fall.
Dampier says "In the future, people will look back on 2008/10 as the Great Deleverage."

I like Brian Tora article on financial crisis.

I like the moneymarketing.co.uk article by Brian Tora on the current financial crisis by looking at the past. For instance, in the early 1970s there was a three day week in the UK and hyperinflation. Tora says this crisis is all about overborrowing with too much money being lent to the wrong people. However, he is confident that we will get through the crisis, which may be once in a lifetime event but is not unique.
Meanwhile, in Brighton the financial firm Antrams has been offering advice for over twenty years. It can handle complex financial planning issues.
In his regular investment article for moneymarketing.co.uk Tora says he is convinced "central banks and governments will find a way out of the situation created out of easy money and greed". However, I think he might have to exclude the bankers Trichet and King, who seem intent on fighting imaginary inflationary battles. It may be that inflation is used to attack the debt mountain in various countries. However, Trichet and King must be more pragmatic and cut interest rates now. Oil and food prices have come down, although the Bank of England governor must be worried about the level of sterling.

It is interesting BOE widening range of collateral.

The UK central bank Bank of England is widening the range of collateral it takes from banks in the provision of their funding needs. The central bank is to take paper, which is not AAA rated such as U.S student loans. The Bank of England governor Mervyn King is probably pondering how to get the banks off this funding tap.
www.searchifa.co.uk
Apparently, the Governor is being more pragmatic and is less concerned at making the banks pay for their mess.