Fear that America was about to tip into recession yesterday wiped £77bn off the value of FTSE shares, the biggest one day plunge in London since the terrorist attacks of September 2001. Speculation that booming economic powerhouse China could be infected by the sub-prime crisis helped to trigger a global sell-off which resumed again this morning. Shares rebounded after the US Federal Reserve slashed interest rates by 0.75%, their biggest rate cut in living memory, in an attempt to pull the world’s biggest economy away from a recession. The pain on the British High Street was further evident today when the shoe-shops chain Dolcis founded in 1863, went into administration with accountants KPMG now running the business.
Archive for the ‘Investments’ Category
Black Monday - Biggest stock market drop since 9/11
Tuesday, January 22nd, 2008London & the South East - boom predicted
Sunday, January 13th, 2008Studies carried out show that most investors regard London and the South East as potential boom areas over the next 12 months. Improved transport links, wealth, foreign buyers, the introduction of Crossrail, the expansion of the east London railway and regeneration across the area will all prove beneficial in the longer-term. The imbalance of supply and demand will also encourage growth for 2008, however these two regions have historically been the top UK property performers, often regardless of the overall national house price trend.
Early Christmas present for pension wind-up victims
Monday, December 17th, 2007After five and a half years of campaigning by workers (who lost their pension when their company schemes were wound up), criticism from MPs, the Parliamentary Ombudsman and others, the government has finally backed down and now plans to offer more help. Originally between 10% and 12% of a person’s pension scheme would have been paid out. But this rescue package worth £2.9bn will payout 90% subject to an inflation-linked cap of £26,000. Final details of the plan will be confirmed in 2008. With 141,000 people affected, the question is how long will it take the government to make these much needed payments?
Northern Rock kicked out of FTSE 100
Friday, December 14th, 2007In the UK, Northern Rock’s shares (Britain’s fifth largest mortgage bank) have been the worst hit by the credit crunch dropping from £12 early in the year to less the £1. It will be relgated later this month to the bottom of FTSE 250 index for medium sized companies. Just narrowly missing the index that tracks small sized companies.
Northern Rock entices savers and puts off borrowers
Friday, December 14th, 2007For the past two weeks, the bank has been offering loyalty bonuses to savers and increased rates to a range of savings accounts. But on the other hand, it has withdrawn mortgages, loans, credit card, and increased borrowing rates to rediculous highs with huge arrangement fees. Obvious signs that its trying to recoupe some of its loses after its savers decided to match away with their money in toe back in October. It has since then borrowed more money from the Bank of England to the tune of £29bn. The move has pushed some of its savings products up the best buy tables and deterred mortgage brokers with fixed rates starting from 6.79% on 90% LTV with arrangement fee of £1,995. As a good loyal Northern Rock mortgage customer, I will have to match off too unless they sort this out.
Central banks try to regain control
Friday, December 14th, 2007Five of the world’s leading central banks including the Bank of England plan to inject £54bn of cash loans into the money markets. They hope this would ease the interbank rates (the rate used by banks to lend each other money) which has remained stubbornly high despite the quarter rate cut last week. Although some analysts believe this will result in an immediate reduction in the interbank rates (and filtering through to mortgages/loans) others however, warn that it would take time for lender to trust each other again. Probably not while there are still huge bank losses still to be realised from the subprime crisis for some months to come. So will this gesture make a difference or has it come too late? We’ll have to wait and see.
Make money from falling house prices
Saturday, December 8th, 2007The UK Residential Index fund will be launched in January 2008. What is this and how does it work? Its a complex investment fund that uses derivatives to bet on the extent to which the property market will fall over various time periods. One of the predictions at the moment is that house prices could fall by 10% next year and would carry on into the next year. So two years of house price falls or as they say, “correct” may be on the cards because it is believed that British property is overvalued by an astonishing 40%.
How to make millions from property!
Friday, December 7th, 2007I recently read an article on how two brothers built their £9bn property empire with a £6,000 loan from their grandmother in 1995. They have definitely accomplished a tremendous amount in a space of 12 years. But why is it that most of these multi-million pound property fortune I read about are from people who started out in the 1990s? Maybe I’m just jealous but surely a monkey could do almost the same thing since property prices have tripled in the last 10 years? We need more articles on newer successful property developers that we can aspire to.
