Financial Crisis and cars
The
Car Loans were going up and up, while the start of financial crisis. Suddenly, in one minute the money become unstable and properties (movable or not) jumped with their prices. The crisis reflecred also to many goods, just like petrol. Prices of oil, respectively and those of fuel in the United States decreased recently, but the price of petrol is still about 1 dollar a gallon higher, compared with the same period last year, and that of the most expensive type of fuel exceeds 4 bucks for a gallon. This is one of the factors that turn luxury cars in one of the most expensive to hold. Indeed, the
car finance of driving can be very high if you add the cost of depreciation tax, registration fees, car insurance, maintenance and repair for five years. In some cases, costs exceed twice the price that the vehicle owner has paid for it. The luxury sedan S65 AMG to Mercedes-Benz occupies first place in the Forbes ranking of the most expensive cars to drive. Cost the car amount of 194 000 dollars, but the five-year cost of holding it reached 252 209 dollars. The car moves premium gasoline and the cost is quite high. The owner will have to spend 27 286 dollars for fuel in five years given that traveling around 15 000 miles a year. However, depreciation is the biggest problem since constitute 48.6 percent of the total cost of ownership of the vehicle. To determine the 10-they-expensive cars for driving, Forbes used data from the company Vincentric, landing statistics for the cost of ownership of a car. Then they split the market in 10 class cars to determine the patterns of 2008, whose ownership was the most expensive. One look at the top of the ranking may make you reflections on the purchase of Mercedes, since four of the five most expensive car for driving from the German manufacturer. Secondly, after the S65 AMG, ranks sports model Mercedes-Benz SL65 with a total cost of ownership amounting to 231 827 dollars for five years, under the number three ranking in enters the cabrio Mercedes-Benz SL600 with total costs amounting to 181 317 dollars, as soon as it comes SUV model Mercedes-Benz G55 with total costs amounting to 159 801. Top five is based on Lexus LS600 Hybrid. Although this model of the Lexus e with hybrid engine, its fuel cost remains too high. The price of the car is 104 900 dollars, but fuel costs constitute 24 percent (17 111 dollars) of the total cost of ownership of the car, reaching 143 355 dollars for five years. In the second half of the top rank Audi RS4, Dodge Charger (Large Sedan), Subaru Impresa (Small Car), Volkswagen Passat (Family Sedan) and Volkswagen R32 (Hatchback) Life can be full of surprises, but spraying of double money what you pay for a car within five years need not be one of them.
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Secured Loans & the liquidity crisis
When the
Bank of England cut its base rate by 0.5%, it was another step in a process that should help would-be borrowers looking for mortgages, secured loans and other kinds of credit.
Since the credit crunch began, the availability of secured loans (and credit of all kinds) has been relatively limited. Secured loans have also become, in general, more expensive.
It’s because
loan providers have been worried about their own finances, and the finances of other loan providers. Normally, lenders use the debts they own (the money people have borrowed from them) to borrow more money (from other lenders), so they can lend it out (as more secured loans, mortgages, personal loans, or whatever they specialise in).
It actually works a bit like a secured loan – they’re securing the loan against the debt they own, so the loan provider lending them the money knows they can afford to pay it back. So it’s similar to the way a homeowner can take out a secured loan by securing it against the equity in their property.
The credit crunch disrupted all that, disrupting the secured loans market. Why? Many lenders realised they weren’t sure how much of the debt they owned would actually turn back into money. In many cases, they’d bought ‘packaged debts’, so it was very hard to know what kind of risk each ‘pound’ of debt carried – a £1 debt that’s very unlikely to be repaid isn’t really worth a pound!
This made loan providers worry about their own finances. It also made them reluctant to lend to other loan providers who wanted to borrow from them (by using their own debts as collateral). This led to the ‘liquidity crisis’ – a lack of ‘liquid’ cash (cash that’s available to be spent or lent, rather than tied up in property or other more ‘solid’ assets). Secured loans became, in general, harder to find and more expensive.
The Bank of England’s base rate cut should help reduce the cost of lending and make secured loans more available, but it’s not the full story. The Bank’s Special Liquidity Scheme, for example, allows banks to ‘swap temporarily their high quality mortgage-backed and other securities for UK Treasury Bills’. In other words, it lets them temporarily swap their debts – as long as they’re high-quality debts – for Treasury Bills, an excellent source of funding, which they can use to provide secured loans, mortgages, etc.
Then there’s the Government push to restore confidence in the banking systems and ‘kick-start’ all kinds of lending, not just secured loans. As The Times reported, the Bank ‘will pump at least £200 billion into the money markets under its existing Special Liquidity Scheme’ and the Government ‘is also making a further £250 billion available for banks over the next three years to guarantee medium-term debt to help restore confidence and get banks lending to each other again’.
Together, the various initiatives should give loan providers the confidence and the money they need, so they can get back to providing secured loans and other forms of credit to individuals and businesses.
This article was written by
Loans specialist Think Money.
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When the markets are going down, buy Champagne
When the market is demolish and investors no certainty for investment in shares and the prices of industrial raw materials fall under the pressure of slowing global economy and reducing consumption. At a time when the shock of the crisis banking system desperately seeking resources to ensure its liquidity, where one can put their money. As with any crisis and for that investors find salvation in the market of luxury and unusual goods that are available to fewer people and less susceptible to speculation and volatility.
Gold and oil futures are no longer exit, Andy Pik, 49 years his father in Atlanta recently invested money in liquid assets - 400 bottles of champagne for 120 000 dollars, reported Wall Street Journal. According to him, this is a deal that beat forecasts as security for the monthly financial statements of Merrill Lynch and the worst that can happen is just to have to have investment. He plans to wait several years and then sell vintage champagne in 1996 with good profits. More and more investors towards the market of products related to the fashion industry as a wave of alapaka received from animals such as llama living in the region around Peru. In pure form is used very rarely because it is quite expensive, and vicuna, called Vigo, which is very strong and excellent insulation qualities. This soft and fine wool is the most expensive natural fiber in the world.
Investors shift assets from uncertain to actual products with a high price, which will remain expensive no matter what happens to capital markets and how cost liter gasoline. Typical of this type until recently securing assets such as property is no longer considered safe after the average price of new housing decreased by 6.2 percent in August on an annual basis to 221 U.S. dollars 900, which is the lowest level since September 2004.
In July reduction in prices is greatest in Las Vegas with 30 percent and in Phoenix by 29 percent as compared to the same month in 2006 the value of U.S. homes fell an average of 19.5 percent. According to the National Register of alapakite in Lincoln, registrations of new animals grew by 7 percent to 140 297 this year. The price of one of those inhabiting Andes in South America, animals with long hair very fine hair, may reach 10 000 dollars and will probably grow in coming years. Financial firms report, to increase the number of people who invest their money in unusual assets, avoiding the standard used by industrial raw materials futures, stocks, bonds and mutual funds.
But the market offers a wide variety of options. Silver Age Comic Book Pricing Index, an indicator to assess the movement of prices of 32 of the traded comic magazines from 60 years increased by 14.2 percent over 18 months to July, while the Standard & Poor's 500 lost 11 of percent of its value for the same period.
Labels: Business News
French Economy is going in recession
The gross domestic product of France is expected to decrease by 0.1 percent in the third and fourth quarters, and account growth up to 0.9 percent throughout 2008, according to preliminary data removed on Friday by the National Institute of the INSEE. It means that the second-largest economy in the eurozone is entering a technical recession for the first time in over 15 years during the third quarter.
In June, the last report, the National Statistics Institute announced that it expects growth of 1.6 percent this year after 2.1 percent in 2007 and 2.4 percent in 2006. Its new forecast corresponds roughly to revised data from the government, which expects 1 percent growth in 2008. Although the government has forecast quarterly, INSEE provides a delay of 0.1 percent in the third to fourth quarters, together with massive job losses. According to Insee forecasts economic growth of France will delay than the euro for the third consecutive year, significant risks to the French economy into account the credit crisis and volatile oil prices.
Global credit crisis threatens to slow further growth of the global economy and Insee expects consumer spending to fuel growth in recent years to remain sluggish in the second half of the year. After a contraction of 0.3 percent of GDP in April-June, France will mark three consecutive quarters of negative growth, but Eric Dubois, head of the Bureau for Economic Research at INSEE, refused to talk about recession and stressed that the reduction was "modest" and expected that GDP growth will be positive for the year.
Labels: Financial News
All eyes on USA
After the plan to rescue the financial sector last night passed through the U.S. Senate, as expected, all eyes are confined to the forthcoming vote in the House of Representatives, the lower chamber of the U.S. Congress. It is expected to vote Friday by the representatives will likely adopt a bill for improvements spending of 700 U.S. dollars billion, which surprisingly rejected on Monday. Besides the amount of 700 U.S. dollars billion, which will be paid by the government to buy mortgage securities by U.S. financial institutions, the Senate added some changes to rescue plan. There are various tax reductions, temporarily increase the guarantee from the state fund FDIC deposits of banks (from 100,000 U.S. dollars to 250,000 U.S. dollars) power to amend the method of entry of assets under market value. Can be made that the proposed tax relief will not be like some more conservative Democrats. But the bill has good chances to go and the next vote, on Monday he reached only 12 votes.
Representatives in Congress probably have turned attention to the fact that surrender their first lead until almost historical collapse of stock exchange indices in the U.S. on Monday. Upcoming elections next month may present a problem for the approval of the bill, which is perceived by the population as support for the greedy players on Wall Street. But few party organizers would like to be blamed for the collapse of the stock market. Many leaders in Congress have expressed optimism that the bill will be adopted.
Labels: Financial News
