I started this blog in June 2007 asking these questions: Are we in a massive asset bubble that will blow up in our faces ??? - ANSWERED YES ! Is western and particularly British society on the verge of social collapse??? What are the best common sense long term investment strategies to keep you rich? When will consumption/debt bubble economics end and a real savings/production economy begin ???

Tuesday 26 June 2007

Thursday 21 June 2007

How buy-to-let is changing your street

It was not so long ago when you could walk down any UK street and be hard-pushed to find a single "to let" sign.

To Let signs are much more common than a decade ago

These days, there are forests of them in some areas - well outnumbering homes for sale.


Behind the signs are a new breed of landlord, people who have lost faith in pensions and other investments to deliver, and are putting their faith in property.

People like Patrick Macvean, who has just bought his third property - a small Victorian terraced house in Chatham, Kent.

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After the party



Hundreds of thousands of graduates will celebrate finishing university this month, but the Student Loans Company rather rained on their parade this week by reporting that debts soared by more than £3bn last year.

The introduction of annual tuition fees up to £3,000 last September pushed the total owed by current and former students in England and Wales to the Student Loans Company to an eye-watering £19bn. This does not include other debts run up with banks, parents and elsewhere.

Students graduating last summer were saddled with an average total debt of just over £13,250 per head, according to the NatWest Student Money Matters Survey, while the National Union of Students estimates that those graduating in 2009 will owe an average of around £30,000.

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Governor's defeat last time heralds rise to 6pc

As he went round the table and asked for each of his eight fellow members' votes, it must have slowly but surely dawned on Mervyn King that things were not going his way. By the time the spotlight returned to him, it will have become clear to the frustrated Governor that, whatever he did, interest rates were going to stay on hold this month.

Only one question remained: should he go with the majority, or should he follow his convictions and vote for an increase, risking causing a major market fuss when it emerged that he had been outvoted for only the second time?

In the end, yesterday's Bank of England minutes showed that he chose the latter. After the details of the vote emerged, the pound jumped by more than half a cent to $1.9929. Economists around the City predicted it was almost certain that rates would increase next month, and warned that this raised the likelihood that borrowing costs jump to 6pc.

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Governor issues 'toxic' debt warning

The Bank of England Governor has warned the City that an explosive rise in lax loans and complex debt instruments now represents a major threat to global financial stability.

In a remarkable speech at the Mansion House last night, Mervyn King issued a caution to the corporate debt market, where banks have dramatically loosened their lending conditions and devised ever more advanced means of extending cash to customers.

He singled out collateralised debt obligations (CDOs) as a specific threat, warning those trading in these complex products that they may be dicing with risks "which we do not understand with any great precision".

He said: "The risk of the entire return being wiped out can be much greater than on simpler instruments. Higher returns come at the expense of higher risk."

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Banks fear rout on risky US bonds

Credit markets across the world were braced for trouble last night after Merrill Lynch abandoned efforts to save two Bear Stearns hedge funds, forcing the sale of $850m (£426m) of sub-prime mortgage bonds and other assets for debt repayment.

JP Morgan and other key creditors have yet to decide whether to enforce margin calls as a panic sell-off in the market for 2006-vintage mortgage securities pushes the two asset management funds towards the brink.

Sources close to the deal said Bear Stearns was trying to organise "an orderly unwind", conceding that the funds could not be saved.

The mushrooming crisis is the worst hedge fund upset since last year's collapse of Amaranth Advisers, which lost $6.7bn betting on gas futures. This time, the ramifications may be broader as the worsening property slump engulfs a large chunk of America's $2,000bn sub-prime sector.

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Wednesday 13 June 2007

The end of the American dream ?

The US economy has been generating strong economic growth over the past few years as it has come out of recession.

After growing at more than 3% a year in 2004 and 2005, the pace picked up to a blistering 5.6% annual rate in the first quarter of this year - although the pace has since then slipped back to 2.9%.

So far, though, little of that growth has translated into the hands of the average worker, according to new research from the Economic Policy Institute (EPI).


For real household incomes, the median point - the level at which half of households earn more and half less - has actually fallen over the past five years.

The unprecedented split between growth and living standards is the defining economic agenda

Jared Bernstein, Economic Policy Institute


That marks a notable contrast with the 1990s, when the economic boom boosted both jobs and incomes.

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ABN fears world housing crash

Soaring borrowing costs could spark a housing slump on a 'global scale', investment bank ABN Amro has warned.

Families have taken on 'unsustainably large' mortgages, leaving them vulnerable to the sharp increases in bond yields and official interest rates seen in recent weeks, wrote economist Dominic White.
Britain is one of the most exposed markets thanks to rampant speculation over the past decade, though it is by no means alone.


Claims that shortfalls in the supply of new homes will lead to an inexorable rise in UK property prices in coming decades have 'as much credibility as Britney Spears' latest comeback,' he wrote.

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US consumers go on shopping spree

Consumer spending makes up two-thirds of the US economy
US consumers have surprised analysts, as official figures revealed that retail sales grew 1.4% in May.


Observers said that the increase, the highest in 16 months, suggested that high petrol prices may not be biting as hard as had been feared.

The data, which also comes amid slumping house prices, buoyed market investors, with Wall Street shares offsetting some of Tuesday's losses.

Sales in April had fallen 0.1%, revised Commerce department data said.

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We're all doomed?

One of the great, global, economic forces of our age, which I’ve bored you rigid discussing in this blog, is that it has been possible to borrow long-term money at relatively low interest rates.

For the past few years, the impact of these low long-term interest rates has been visible in a surge in borrowing by individuals and companies together with the related phenomenon of rising prices of almost every kind of asset or commodity. Here are just three important manifestations:


a) UK house prices that keep going up and up – almost regardless of what the Bank of England does to short-term interest rates;

b) share prices, that have increased more-or-less in a straight line since the spring of 2003;

c) a boom in takeovers of companies, financed by borrowing, and a great wave of repurchases of shares by companies, again funded by debt.

Now, a fall in longer term interest rates is simply the corollary of a rise in the price of certain US Government bonds.

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Monday 11 June 2007

UK property prices move upwards

UK house prices rose 1.2% in April, the Department for Communities and Local Government (DCLG) survey says.
The DCLG index showed the average home cost nearly £210,000 in April.


As in previous months, Northern Ireland and London saw strong gains, with both areas seeing price rises above the national average.

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Finding the silver lining

Merryn on Money
I HAVE been reading two interesting publications this week. The first comes from Capital Economics and is called Global Inflation Watch. This is interesting mainly because of the title – who’d have thought even five years ago, when as far as most commentators were concerned rising prices were a thing of the past, that any research groups would ever bother to devote an entire 40-page report to worrying about the subject.

The second is the New Scientist, which pretty much sums up the reason why the price of almost everything is on the up with its headline: World Stripped Bare.

The basic premise here is that we are using up the world’s resources, and its minerals in particular, at a most alarming rate. If the world keeps consuming metals at its current rate we have a mere 45 years of gold left, 46 years of zinc, 29 years of silver and 59 years of uranium.

If the rest of the world catches up with America and starts consuming these minerals with the same enthusiasm, things look worse: there is only 19 years’ worth of uranium, less than 10 of silver, 36 of gold and 34 of zinc.

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Friday 8 June 2007

The Bank's worst decision

Mervyn King, the Bank of England governor never comments on the past decisions of the Monetary Policy Committee.

He's often invited to admit to a mistake, or a regret, or even allow a moment of self-congratulation. But he generally declines to comment, explaining that the Bank has to focus on the next decision, not the last one.

He's right to remain silent. If he comments on one decision, he'll be invited to comment on another, and he'll soon be forced to comment on everything, which would be fine except his extensive commentary would then inevitably be over-interpreted.

But just because he doesn't comment, doesn't mean we can't.

And there is one decision taken by the MPC that deserves to be named and if not shamed, at least named and regretted.

It was taken in August 2005, and it was one Mervyn King himself did not agree with. Indeed, it was noteworthy as the first decision in the history of the independent Bank of England in which the governor had been overruled, and it was in retrospect probably also the worst decision the Bank has taken.

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New Zealand 8% rate shock as inflation stalks the world

New Zealand has stunned investors by raising interest rates a third time this year to 8pc to head off an inflationary spiral, adding to fears that central banks across the world may need to tighten much more than originally thought.

The rise was denounced as a "kick in the teeth" by the Auckland Chamber of Commerce, a sign that consensus over monetary policy is starting to break down as the overheating crisis turns serious.

Alan Bollard, the reserve bank governor, said roaring demand for commodities called for draconian measures. "We may once again be surprised about the persistence of domestic inflation," he said.

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Opec still has us over a barrel

IT takes a plucky writer to admit he is wrong, particularly when there is a certain type of reader out there – usually anonymous, sometimes using joined-up writing – who is happy to tell me I am wrong every week.

But I have been wrong, so far at least, on oil. High oil prices, one of the factors that have complicated the task of the Bank of England and its fellow central banks, are still with us, having climbed back above $70 a barrel in recent weeks. Last week they remained close to that level. Futures markets suggest $60-$70-a-barrel oil for the foreseeable future.


My hopes were raised earlier this year when prices dipped briefly below $50 a barrel, not far above the $40 level I had said was sustainable in the long-term. But the market was just teasing, and prices were soon on their way back up again.

So this is a good time to revisit oil, and to ask the question: Will prices ever come down again?

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It is the British dream to own the roof over one's head. But with the average home now costing £180,000, that that dream is bleeding millions dry

The yen to own one's own home may well be universal, but foreigners arriving in England are reliably taken aback by the extent to which this craving dominates both private and national conversation. At first it seems relatively harmless, an easy-to-caricature national trait, like saying sorry all the time, or making portentous observations on the weather, but gradually it becomes clear that discussions of house prices are always loaded with much, much more: where a person falls in the fine gradations of class, how their achievements compare with those around them, who they are, who they would like to be. All of which goes some way to explaining the anxiety caused when, as is increasingly the case, it becomes impossible to own a home (among the latest statistics afflicting first-time buyers, for instance, is the fact that the average property loan now stands at more than £150,000, up from £134,000 a year ago). Not having a foot on the housing ladder becomes evidence of some kind of moral failure; marvelling at how much wealth a home has accrued on paper both a 21st-century equivalent of being born with blue blood (ie, effortlessly, smugly lucky) and the socially acceptable face of avarice. "The home is our identity," says Kate Fox, author of the anthropological book Watching the English. "We define ourselves by our homes."

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Thursday 7 June 2007

Indian wage spiral forces TCS to outsource in Mexico

The increasing cost of labour in India is forcing the country’s largest software services provider to hire 5,000 employees in Mexico.

Tata Consultancy Services (TCS), which opened a software development centre in Guadalajara, Mexico, last week, will outsource the first 500 jobs from India in this financial year. A further 4,500 jobs will follow over the next five years.


A talent supply crunch in the booming services sector in India, coupled with a sharply appreciating rupee against the dollar, is threatening to knock the country off its perch as the world’s leading outsourcing centre.

“We see costs rising in India and people becoming less available,” Gabriel Rozman, president of TCS in Latin America, Spain and Portugal, said. “That’s why we’re going to places like Latin America, which has professionals and reasonable costs.”

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Fears for property prices after £2bn Vector float sinks

Britain’s commercial property market was dealt a body blow yesterday as the £2 billion flotation of Vector Hospitality was pulled at the eleventh hour.

Prospective investors worldwide shunned Vector — which was to be Britain’s largest property flotation this year — over fears that property prices are set to go into reverse.


Vector was to raise up to £2.26 billion to buy flagship assets ranging from the Waldorf Hilton and Cumberland hotels in London to the Malmaison and Hotel du Vin chains and De Vere and Village hotels.

Last night its advisers, led by Deutsche Bank, postponed the flotation indefinitely despite cutting back the float price by £460 million just a day earlier and giving themselves an extra 24 hours to complete the book-building exercise, a move that they said made them “confident” of getting it away.

Vector drops float price to appease fearful funds
Can rising rents offer cushion from fears of crash?
Property has peaked, LandSecs chief says
Sources close to the process said yesterday: “It is to do with market conditions. The market has softened and it is fair to say that the property market has been softening for the whole period of the marketing. All that added up to a price the principals were not happy with.”

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Morgan Stanley issues triple sell warning on equities

Morgan Stanley has advised clients to slash exposure to the stock market after its three key warning indicators began flashing a "Full House" sell signal for the first time since the dotcom bust.

Teun Draaisma, chief of European equities strategist for the US investment bank, said the triple warning was a "very powerful" signal that had been triggered just five times since 1980.


"Interest rates are rising and reaching critical levels. This matters more than growth for equities, so we think the mid-cycle rally is over. Our model is forecasting a 14pc correction over the next six months, but it could be more serious," he said. Mr Draaisma said the MSCI index of 600 European and British equities had dropped by an average of 15.2pc over six months after each "Full House" signal, with falls of 25.2pc after September 1987 and 26.2pc after April 2002. "We prefer to be on the right side of these odds," he said

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High time the Bank grasped the nettle on inflation

Only a year ago it would have hardly seemed conceivable to question the Bank of England's performance as the director of Britain's interest rate policy. Now, barely a day goes by without another reminder that the Monetary Policy Committee made a mistake, and now we are all paying the price.

The mistake in question was its decision two years ago to cut borrowing costs to 4.5pc - a move which, significantly, Governor Mervyn King objected to. It was that decision which is largely responsible for today's spectre of inflation.

Admittedly, the Bank has had to contend with higher prices generated both home and abroad. The decade-long dividend of globalisation was to push down import prices.

Now, we are importing inflation from abroad, as Chinese manufacturers try to recoup the extra energy costs they have been facing.

However, over the past year, the UK has developed an inflation problem of its own - the worst in the West, and for this the Bank is responsible.

It was wrong to cut rates in August, because it gave the impression that more cuts would follow. It was wrong not to reverse that more quickly, and to hesitate before lifting rates to their current level. It ought to lift them one more time today, rather than waiting a few months, as the market expects.

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Britain faces 20-year house boom that will split nation, says report

The long housing boom is causing growing economic and social problems because it has made housing unaffordable for many people, particularly the young, according to a report from a new thinktank, launched today.
Strong demand and limited supply of housing means the problem of affordability is likely to get much worse over the next two decades, said the National Housing and Planning Advice Unit.


The report forecasts that by 2026 the cheapest 25% of houses will cost 10 times the average earnings of the poorest 25% of people. At the moment these houses cost seven times earnings; a decade ago they were only four times.

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New body calls for urgent action over house prices

The next generation of homebuyers could face average house prices that are 10 times their salaries unless the number of homes being built increases, an independent housing body warned today.

Research from the newly-established National Housing and Planning Advice Unit (NHPAU) found that more than a third of non-homeowners think they will never be able to buy.

A further fifth believe it will take them at least five years before they are in a position to take their first steps on the property ladder.

Their pessimism comes as the typical price of a home in the UK continues to outstrip salary increases.

Government figures show that in 2000 the average cost of a home was four times annual earnings.

Steep house price hikes meant that by 2006 the typical homebuyer was looking at a home that was seven times his or her salary.

The NHPAU predicts that this is set to rise again unless supply increases.

By 2026 it estimates that house hunters will be faced with average prices 10 times their yearly earnings.

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Wednesday 6 June 2007

Buy-to-let: is it still worth the gamble?

Rising interest rates are squeezing returns for buy-to-let investors, and anyone considering entering the market now should think carefully about how they are going to make money.

Mortgage lenders traditionally required a "buffer" of rental income cover in excess of the mortgage interest repayments. This was 130 per cent between 1998 and 2004 but fell to 127 per cent in 2005 and 125 per cent in 2006, according to Council of Mortgage Lenders (CML) figures.

This suggests that landlords are stretching themselves further in a bid to try to make money from their investment, and that lenders are becoming more lenient in the way they apply their criteria.

The two are a dangerous combination.


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Fed chief reignites 'stagflation' fears

Ben Bernanke, the chairman of the US Federal Reserve, has doused hopes of an interest rate cut in coming months, warning that inflation is still the chief risk to the American economy.

In remarks that sent shivers through Wall Street, Mr Bernanke said the US faced double pressure from a deep housing downturn and "somewhat elevated" levels of core inflation.


The Dow Jones index fell 106 points in early trading in New York as investors fretted over the growing signs of "stagflation", which is typically poisonous for equities.

Mr Bernanke said there was a "big risk" that high capacity usage would prevent inflation falling back down to the Federal Reserve's comfort level.

He reminded investors to control their appetite for risk in a hazardous world. "Lack of attention to risk management is not desirable since we have no idea where the shock will come from," he said.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/06/06/cnfed106.xml
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Cheapest town's homes top £100k

Every town in the UK has an average house price above £100,000 for the first time ever, according to Halifax.
The town in Britain with the cheapest property is Lochgelly in Fife, where the average home costs £104,738.


The average house price for the whole of the UK passed £200,000 for the first time in February this year.

A north-south divide has re-emerged, with London prices rising 14.9% over the past year while average prices in the north of England have risen 5.6%.

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House prices 'still accelerating'

Brighton & Hove has joined Greater London as the place in England and Wales where house prices are rising fastest, says the Land Registry.
Property prices went up by 15.6% in both those areas in the year to April.


In England and Wales prices rose by 9.1% on average, faster than the property inflation rate of 8.3% recorded in March.

The average home in England and Wales now costs £179,935 - £15,003 more than a year ago.

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Books You MUST Read !



http://www.amazon.co.uk/Coming-Crash-Housing-Market-Protect/dp/007142220X/ref=pd_sim_b_3/203-9249887-7067960?ie=UTF8&qid=1181126874&sr=1-1



http://www.amazon.co.uk/Empire-Debt-Rise-Financial-Crisis/dp/0471739022/ref=pd_sim_b_5/203-9249887-7067960?ie=UTF8&qid=1181126874&sr=1-1



http://www.amazon.co.uk/Boom-Bust-Prices-Banking-Depression/dp/085683243X/ref=pd_bowtega_1/203-9249887-7067960?ie=UTF8&s=books&qid=1181126874&sr=1-1



http://www.amazon.co.uk/gp/product/1857883489/ref=reg_hu-wl_list-recs/203-2810709-1391969


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The UK housing market - Whats the real story?

No housing market has been under more scrutiny than the UK housing market over the last few years. Every financial, property investing, moving, and travelling website has commented, to some extent, on the fluctuations in the UK housing market.

Most companies have experienced a housing boom, but few shared the experience of a continual increase, without 'real' fear of a crash. That is exactly what is happening in the UK. Even with houses in London at 1m pound, property investment websites, and real estate wealth blogs, and discussing whether it is possible to reap the same rewards buying in London as they would if they invested in property on Brazil's Caribbean cost.

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Price of one bedroom flat hits a record £3 million

A one-bedroom flat is on the market for more than £3 million.

The home in London's Belgravia is the most expensive one-bedroom flat ever to go on sale in the capital.


The offer comes amid growing concern that London's property boom shows no signs of ending - despite rising interest rates.

Experts believe London has effectively become "detached" from the rest of Britain's housing market because of the influx of foreign capital and massive City bonuses.

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178,800 borrowers, who took out mortgages in 2005, will face mortgage repayment increases of £185 a month

According to Mortgage Advice Bureau (MAB) 178,800 people, who took out mortgages in 2005, will face mortgage repayment increases of £185 a month as they come to the end of their fixed rate deals and move onto their lenders SVR rate this month - with a further increase should the base rate rise again this week...

On a typical £100,000 capital and interest repayment 25-year loan, the interest rate on people's loans will increase from typical fixed rates of 4.39 per cent (Moneyfacts 2 June 2005) to the current average SVR rate of 7.40 per cent (Moneyfacts correct as of 24 May 2007). This means that monthly repayments will increase by £185 or 33 per cent from £556 to £741, and represents a total cost for all 178,800 people of £33.08 million per month.

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Tuesday 5 June 2007

George Soros on Housing Prices - June 2006


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Read This NOW !



http://www.amazon.co.uk/exec/obidos/ASIN/1841126918/housepricecra-21
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Stop working ! Outsource everthing to India !!!


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Buy-to-let investors are suffering - should we be worried?

FOUR interest-rate rises in nine months and by all statistical accounts the message is filtering through: house-price inflation is coming down. But as borrowing costs increase, observers may have been prematurely worried about the effect on cash-strapped householders. It seems there is a group in the property market that is more sensitive to financial pressure than even first-time buyers: that is, buy-to-let investors.

Surveys from specialist lenders and investor groups have long maintained that stagnant, or even falling prices, would be no bar to the buoyant buy-to-let market. Some have even predicted that any price falls would be greeted with a investment-buying spree. But as the rate of growth slows (to 9.1 per cent annually, as reported by the Land Registry this week, or 6.7 per cent and on the way down, according to Home-track) agents say that buy-to-let investors are increasingly thin on the ground.

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Buy-to-let brigade could be the joker in the homes pack

In polite circles there is one C-word that remains taboo. Crash. We can whisper it or think it, but anyone saying it aloud faces ostracism from our property-obsessed culture.

We may have to overcome our objections. House price inflation is cooling in England and Wales – but still rising in Scotland and Northern Ireland, although for how long? – and the assumption that property prices can only ever move in one direction may need to be revised.

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A tax rate that enrages Middle England

In this current boom, the super-rich are making such extraordinary fortunes that they are not just stoking the suspicion of the working class, but the well-paid middle classes, too. The battle lines in Britain’s class war are shifting: it is no longer Citizen Smith and the Tooting Popular Front agitating for change, but Mr and Mrs Smith and the Wimbledon Neighbourhood Watch scheme who are crying “Power to the People!”

University-educated men and women working hard and enjoying successful careers in public companies are finding themselves frozen out of swaths of the London property market by a new breed of wealth: hedge fund managers, private equity partners and investment bankers. There are signs of a new kind of fissure between the reasonably well-off and the absurdly wealthy – not a blue-collar/white-collar divide, but suit-and-tie versus open-necked shirt; not over how much you are paid, but how: are you someone who measures your earnings in salary or capital gains?

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After the boom years, prepare to face a bumpy road ahead

Bull markets, it is said, climb a wall of worry. This one has climbed a wall of money. From the roaring Chinese stock market to the scout hut in Willesden that was sold last month for £400,000, cheap money is gushing into asset markets everywhere and driving an unprecedented period of global growth.

The problem is, the taps may have been switched off. With interest rates rising in Britain and worldwide, analysts are starting to ask whether we have reached the top of the economic cycle.

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Monday 4 June 2007

How can this logo cost more than double the price of a house ???

ANSWER: Tax payers paid for it !

You want a logo you pay £50 to £200. The govenment want a logo they pay £400,000 !!!


London unveils logo of 2012 Games

The logo for the 2012 Olympics and Paralympics has been unveiled in a star-studded ceremony in London.
The jagged emblem, based on the date 2012, comes in a series of shades of pink, blue, green and orange and will evolve in the run-up to the Games.

The word London and the Olympic rings are included in the first two digits of the new logo.

"This is the vision at the very heart of our brand," said London 2012 organising committee chairman Seb Coe.

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The best way to get rich is to MAKE AN AVERAGE AMOUNT OF MONEY AND SAVE IT !!!



Buy this book on amazon.
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Stupid woman in debt blogs for the BBC !

Thousands of people in the UK are struggling with ever-increasing levels of personal debt.
BBC News website reader, Sayara Beg, 36, a freelance IT consultant from East London, emailed to tell her story of dealing with debt.


Diary entry one: May 1

I am heavily pregnant and in debt.

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Using your house as a wallet

House prices continue to rise briskly. And since the start of the decade, UK home owners have borrowed an astonishing £264bn against the rising value of their homes.
But is this borrowing, known as mortgage equity withdrawal, a good thing? Two commentators argue the case.

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The champagne overdraft



Everyday folk are trying to buy into the celebrity lifestyle of swanky nightclubs and £5,000 bar bills and plunging themselves into penury as a result. Why?
We've all seen pictures of footballers, singers and soap stars stumbling out of "exclusive" clubs and into waiting taxis, label-clad and dripping with jewellery, illuminated by popping flashbulbs.


But what of those who try to follow the same lifestyle, but without the funds?

Gregory, an IT programmer from Walthamstow, was part of this lifestyle, but ended up in debt after losing all his money and savings following months of excessive spending in London clubs.

"I would go out and I would spend a lot of money on drinks, on occasions about £2,000 a night. I used to buy a lot of champagne in the clubs at around £60-£100 per bottle.

"Sometimes I'd buy over 10 bottles for myself and for people around me, you want to feel like you are that glamorous so you will be extravagant you will give glasses of champagne to people that you don't even know and you don't even talk to.

"It's something that can spiral very easily out of control all because you don't want to be who you are, you want to be something more than that."


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idiocracy - the age of morons is upon us !

Modern science fiction usually portrays the future world as a shiny utopia of science and advanced learning. Either that, or it's a post-apocalyptic wasteland ravaged by science gone amok or man's own arrogance. Idiocracy takes a look at where the world's headed right now and says forget it. None of that's going to happen, we're just going to get really stupid.

Think about it. Who has the most kids? Stupid people. They're out their breeding like rabbits while geniuses spend their time developing a cure for male pattern baldness. That's the gist of the hilarious opening sequence to Idiocracy. The smartest, the most fit among us no longer procreate while the stupid screw their brains out ensuring that the human race as a whole gets stupider and stupider and stupider. Without any natural predators to thin the herd; with science, welfare, and television keeping the dumbest alive, healthy, and happy enough to remain potent we're done for. Evolution will take its course and centuries from now we'll become a planet full of Bam Margeras.


http://www.cinemablend.com/reviews/Idiocracy-1775.html







http://www.imdb.com/title/tt0387808/

Sunday 3 June 2007

The UK housing crash - it is only a matter of time.



This chart tells an extraordinary story about the current state of the UK economy. On the one hand, we see household indebtedness, as a percentage of post tax income, rising rapidly. This growth in debt starts around 1998, and its growth almost exactly mirrors the housing bubble. However, interest payments, as a proportion of post tax income, have remained broadly constant.

So what has been going on with household balance sheets? As interest rates have fallen, people have more or less maintained the same level of interest payments, but taken on more debt. It is as if they have said to themselves "I can afford to pay around 8 percent of my post-tax income on interest charges and I will take on a level of debt consistent with that interest payment". So long as interest rates are falling, or remain low, this borrowing strategy did not posed any serious financing problems for households.

What did households do with all this extra debt? They used it for three things; some of it was used to buy overvalued houses; some of it was used for consumption collateralised on rising housing values (in other words mortgage equity withdrawal); and some of it was used to finance consumption through credit cards. For the UK economy as a whole, this borrowing binge sustained growth for the last nine years. However, inflation started to creep up, and interest rates are beginning to increase.

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Outsourcing Your Life

Sending work offshore has transformed the U.S. economy. Now, some families are tapping the same approach for personal tasks, getting them done for a fraction of what they'd cost at home. Taking your to-do list global.

When David San Filippo decided to create a tribute video in honor of his sister's wedding, he could have gotten a recommendation from a friend or looked up video editors in the phone book. Instead, he did what big corporations have been doing for more than a decade: sent the work offshore.

On the Internet, Mr. San Filippo located a graphic artist in Romania who agreed to do the whole thing for $59. The result was a splashy two-minute video with a space theme and "Star Wars" soundtrack. It won raves at the wedding.

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Debt judgments hit 10-year high

The number of County Court Judgments (CCJs) against consumer debtors has reached its highest level in almost 10 years, figures show.
Nearly 250,000 CCJs were issued in England and Wales in the first three months of 2007 - up 9.5% on the same period a year ago.


Lenders were "increasingly using the court route to deal with unsecured debts", the Registry Trust said.

Experts said the data also showed more households were struggling financially.

The 247,187 CCJs issued for consumer debt is the highest since the summer of 1997

The total number of judgements issued - including those served on businesses - was 296,841, up 9.1%.

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Is the China effect over?

For the last few years, the biggest risk to the strong performance of UK economy has been inflation.

It has seemed fairly tame, and even-higher oil prices in recent years did push it worryingly high.

But the risk has long been that we would discover that underneath our strong economy, was brewing some hidden inflationary pressure.


If that emerged, it would imply that some of our recent economic success had been built on shaky foundations: it would mean that interest rates had perhaps been "too low", that the borrowing we have done on the back of low interest rates was less affordable than we thought, that the house prices we have paid on the back of easy borrowing are unsustainably high, and that any sense of consumer wealth deriving from higher house prices is a mere illusion.

Indeed, for quite a while, one has been able to imagine the benign conditions of the last few years unwinding if inflation materialised. And that's why economists have been watching it so closely. It is not just about the discomfort of higher prices.

Well, has this inflationary pressure now materialised, or is today's 3.1 per cent rate just a blip?

Certainly it could be a blip as inflation is volatile at the moment, largely as a result of energy price swings. We can soon expect the measured inflation rate to fall as last year's energy price rises drop out of the twelve month inflation rate. And it may fall further as this year's energy price rises push the rate down. And then we can expect it to rise again in a years time, when this year's falls also drop out of the twelve month rate.

So we have to see through that volatility and ask where inflation will settle. That should be well below three percent, but there is still room for concern.

It all comes down to the China effect. In recent years, our economy has been dependent on deflating imported goods prices. To some extent, we've been able to enjoy simultaneous fast domestic growth, strong consumer spending and low inflation, because the prices of manufactured goods have been falling each year.

If the flow of cheap imports dries up, either because the Chinese export prices rise or because our exchange rate falls, then we have to adjust the domestic economy to slower growth and restrained consumer spending.

Today's figures show some worrying signs that manufactured goods prices are picking up. Furniture, toys and games, clothes and textiles all get an honourable mention in the statistical press release, as exerting upward pressure on prices.

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Saturday 2 June 2007

India's richest man builds 60-storey home

· £500m Mumbai tower for family of six and 600 staff
· High-rise era attacked as dawn of 'new vulgarity'


In the most conspicuous sign yet of India's unprecedented prosperity, the country's richest man, Mukesh Ambani, is building a new home in the financial hub of Mumbai: a 60-storey palace with helipad, health club and six floors of car parking.
The building, named Antilla after a mythical island, will have a total floor area greater than Versailles and be home for Mr Ambani, his mother, wife, three children and 600 full-time staff.

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Family forced to flee just for being ginger

A family of six have fled two homes after enduring a vicious hate campaign, apparently prompted by the colour of their hair.

Kevin and Barbara Chapman say that anti-ginger prejudice has led to their property being vandalised and their four youngest children being subjected to a litany of cruel taunts, verbal abuse and bullying.

The Chapmans and their children, who are from Newcastle-upon-Tyne, have a blaze of red hair which, they claim, has reduced them to living like fugitives in the city. Their plight carries uncomfortable echoes of the Catherine Tate sketch in which a group of ginger-haired outcasts find safety in a refuge after being ostractised by society.

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Sell! Twenty reasons to panic !!!

Signs of extraordinary excess and irrational exuberance seem to be everywhere, in every line of business, across all sectors. All next week we investigate boomtime Britain and ask: is this the top of the market?

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In our extravagant times, should bulls snort at bears?

Orlando Hamilton’s flower shop is not the kind of place you expect to be struck by an impending sense of doom. It is sweet and fragrant, crammed with exotic plants, elaborate arrangements and buckets of flowers spilling into the street. But when I stopped by to pick up a couple of bunches of hyacinths the other day, there was a sense of frenzy in the Ladbroke Grove florist. Orlando Hamilton had just been asked to arrange 6,000 red roses, which were being flown in for a single evening at the Dorchester hotel, which was hosting the launch of a new, limited-edition perfume that costs £64,000 a bottle.

The whole thing sounded so absurdly extravagant that, walking out of the shop, you couldn’t help but wonder: is this a sign that we have reached the top of the market?

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