Prices of Real Estates in London are falling
Housing prices in London fell more than in any other region of the UK this year and will probably continue to fall in 2009, as economists expect a deepening of recession in the UK, reported today by Hometrack. Housing prices have fallen by 10.1 per cent in the capital of the United Kingdom, to an average reduction of prices by 8.7 percent nationwide this year. Only in December house price in London fell by 1 percent, to fall by 0.9 percent in the UK as a whole. House price in England and Wales have fallen to an average 159 900 pounds, according to the market research company Hometrack.
Housing on the island already cheapen 15 consecutive months, having decreased by 9.3 percent since the beginning of the crisis in August 2007. According to the survey average time of properties sold in December was 12 weeks compared to 8.3 weeks year earlier and six weeks in April 2007. The average final selling price has reached 88.6 percent of the initial bid, against 93.5 percent in December 2007. Housing prices in Britain are trouble in the past 10 years, reaching their highest levels in the middle of last year. At present, banks have limited lending trying to increase its capital base and to restore its fiscal balance in the face of recession depth and growth of unemployment in the country. Government led by Prime Minister of Britain Gordon Brown will announce new measures for the recovery of credit in the next month after the sharp reduction in the basic interest of the Central Bank of England does not lead to a thawing of credit resources.
Labels: Financial News
Will GMAC start working?
Day after the expiry of the deadline for the financial division of General Motors, GMAC to fulfill the conditions to debt and capital base to be converted into a bank holding company, the company maintained silence on how to develop negotiations swap transaction exchange the company's debt worth 38 billions dollars against its shares. Since the company must obtain approval of its creditors for 75 percent of the debt in order to enforce being converted into a bank holding company. On Wednesday Fed GMAC gave permission to be converted into a bank, on Sunday as the company announced that give information about the process as soon as possible. Majority share of 51 percent in GMAC is owned by investment fund Cerberus, which is the main investor in Chrysler, the remainder of the shares of the company are owned by General Motors.
Financial company whose main activities lending and consumer loans for the purchase of cars hopes on the support of the U.S. government, but under the program to stabilize the banking sector worth 700 billion dollars. For this purpose, however, the company must meet certain conditions for the debt ratio and capital base to its assets, as to implement them GMAC wants to take the redemption of bonds with maturity expiring over the next five months. The company will offer price of 55 dollars for the price, if holders of the bonds are not satisfied with this offer will be able to exchange the debt against an equivalent value preferred shares or bonds. ResCap of creditors will receive 20 price of the dollar value of debt held by them. GMAC is united with losing CIT, whose main activity is commercial lending in an effort to ease access to financing and to obtain the status of bank holding company. Currently the company is facing bankruptcy, as has debts of 52 billion dollars with maturity, expiring in 2009. The last deadline for fulfilling the conditions for transformation into a bank holding company of the financial company was Friday, last week. GMAC, which provides funding and dealers of automobiles General Motors, difficult situation falls under the pressure of the collapse of mortgage markets in the U.S. brought its losses amounted to 7.9 billion dollars.
Labels: Business News
Credit fever on developing markets
Record amounts of government securities which they intend to issue the industrialized countries next year to finance its shares to deal with recession loom, threaten to reduce access to the governments of the new economies to the credit market - says "Financial Times". According to analysts, new markets may be out of the issue of securities for 3 trillions U.S. dollars, which is three times more than in 2008. Only the U.S. is expected to issue debt of 2 trillions dollars in 2009.
Head of the Unit for Research on developing markets for RBC Capital Markets says: in simple words will be fighting for limited funds among more emitent. At the same time, governments and corporations from developing markets should pay the debt amounting to 6.865 trillions U.S. dollars next year, according ING Wholesale Banking. In including bonds, loans, interest payments and trade payments. According to the strategic leader for developing markets for ING, the risk of refinancing will be among the biggest problems in 2009 for new emerging markets.
"Do not look likely government bankruptcies, but many companies will see the debt restructuring or bankruptcy", commented analyzers. Governments and companies with the highest score will still attract buyers, but most issuers will have to provide far higher returns to investors. Payments on foreign debt next year to Brazil, Russia, India and China are as follows billion to 205 U.S. dollars, 605 U.S. dollars billion, 257 billions U.S. dollars and 2437 billions U.S. dollars, but the countries of Brick able to rely on big foreign exchange reserves to pay accounts. For example Argentina has a foreign debt of 64 U.S. dollars billion due in 2009, Turkey and 36 U.S. dollars billion
Labels: Comments, Financial News
The worst economy year for Russia is comming
Next year will be the worst for the world economy since the Second World War, and Russia - worst for the past nine years. This dark prediction was made on Saturday by the Finance Minister of the Russian Federation Alexei Kudrin, quoted by "Nezavisimaya gazeta". According to the minister for the first time in recent years the Russian budget will end with a deficit that could top 2.5 trillion rubles (U.S. dollar today reached 29 rubles to $ 1). This deficit can be covered using spare background.
According to experts, Kudrin has not fallen into unfounded pessimism. The economic downturn in 2009 may exceed the depth of the fall of the Russian economy in 1992 after the disintegration of the Soviet Union, when GDP of the Russian Federation has decreased by more than 14 percent. Kudrin said on television channel Vesti 24: in 2009 and finance throughout the country will have to solve problems of unprecedented complexity. Inflation remained high level of over 13 percent. "Pass through a crisis period," notes Kudrin. Towards the middle of next year inflation expected to be manageable, but only if the price of oil becomes $ 50 barrel. If inflation is $ 30, then inflation could reach 15 percent, a rate of the ruble will slightly change.
Labels: Financial News, Politic News
Moody's dropped the Ford Motors rating
The credit rating of Ford Motors was reduced by the investment office of Moody's, where alleged that the manufacturer of cars will have to restructure its debt in order to achieve concessions from the unions as its U.S. competitors.
The rating was lowered to Caa3 or five degrees below the historical status by Moody's announced yesterday by the change affects about 26 billion of debt based on Diarborn, Michigan company.
Reduction reflects the increased risks that Ford will have to undertake a restructuring of part of my balance "to obtain concessions such as General Motors and Chrysler can achieve in negotiations with the United Automobile Workers to unionize (UAW), within Federal plan to help companies as Moody's. Ford is not part of the government plan for emergency financial package of 13.4 billion dollars for the other two leading U.S. companies in the sector. Second largest producer of cars across the ocean "must reach equivalent to GM and Chrysler agreement with the UAW", according to Moody's, but rating agencies believe that the unions will not make concessions unless creditors and the company does not do so. Yesterday shares Ford to be thrown down by 12.20 percent to 2.59 dollars.
Labels: Business News
Deutsche Bank made Chinese mad
Investors in bank debt threatened to boycott the creditors who are, Deutsche Bank and infringe unwritten rule, as have the first call option for secondary debt. In coordinated action, angry investors contractual wrote to the banks that any failure to exercise the call option will be considered a breach of trust, which could lead to denial of new purchases of debt of the issuer. The decision of the German bank hitted debt markets last week after the financial institution chose not to redeem debt for secondary 1 billion euros in bonds structured Pillar 2 since it went on its cheaper than the refund.
But even though save of the biggest bank in Germany nearly 150 million, this move led to the fury of the debt buyers that operate based on the assumption that the bonds will be redeemed on the first call date. In a letter to which he has managed to get the English daily The Independent, says that the bank took the decision for or institution is in such difficult situations, it is impossible to comply with the unwritten rule or bank feels in such strong position that can afford to renounce the support of a wide part of its institutional investors. Bank of China, a major buyer of bank debt, has gone further in communication with issuers. Giant Chinese lender said that "any refusal from the call option by an institution will lead to withdrawal from future investments in the debt of this institution.
Labels: Business News
Surprising rise in consumer spending in France
French consumer spending of households grew by 0.3 percent in November, the largest increase in purchases of electronics and other equipment for the home, according to preliminary data of the national statistics office INSEE, published today. The market consensus expectations were for a drop in consumer spending of 0.1 percent of the French in November. The November data were revised to a fall of 0.5 percent instead initially reported drop of 0.4 percent.
Compared with November 2007, household spending on goods increased by 1.0 percent, according to INSEE. Consumption of manufactured goods in factories, represents one quarter of total household spending on goods and services. In retail sales excluding automobiles, spare parts and medical products, costs rose by 0.6 percent in November to decline by 0.5 percent in October. Consumer spending on durable goods - transport equipment housing - rose by 0.6 percent in November after a fall of 0.6 percent in October despite a continuing decline in purchases of cars during last month fell by 2.1 percent after a fall of 1.5 percent in October.
Labels: Financial News
Free trade is the best economic stimulation
Global economic crisis will lead to a sharp increase in the unemployed of working age globally with 25 million in 2010, predicted today the Organization for Economic Cooperation and Development. "We expect cuts in the range of 9 to 10 million in the member countries of OECD ... and 20 to 25 million worldwide, from now until 2010, said in French radio BFM Director General of the Organization Angel Guriya.
Earlier the International Labor Organization predicts that the number of unemployed people globally will grow by 20 million and will reach record 210 million at the end of 2009.
In the Paris-based Organization for Economic Cooperation and Development members 30 countries, including the leading industrial economies in the world. According Guriya European countries must devote more resources to stimulate their economies and the European Central Bank should lower interest rates in view of declining inflation. EU must go further than plans for fiscal incentives already announced, equivalent to about 1.4 percent of its GDP, while all other major countries do the same "said the Guriya. According to him, the economies of the OECD are in recession and reported a fall in the first two quarters of next year, and many of them throughout 2009.
Labels: Financial News
China granted 19 billions USD loans to Taiwan
Mainland China promised to grant loans amounting 130 billion yuana ($ 19 billion) to investors in Taiwan over the next three years. The proposal was made by the head of the office for relations with Taiwan government of China during a meeting with Taiwanese politicians in Shanghai, reported Reuters. The official news agency Sinhua indicates that mainland China and Taiwan will pass "hand in hand" in the current economic difficulties.
If the crisis gets worse and Taiwan exam economic or financial difficulties, China is ready to immediately give aid, said a senior Chinese politician is. These words were greeted with applause from Taiwanese. Currently in Shanghai is held the fourth cultural and economic forum between mainland China and the island, which is the only territory of the Republic of China after the Chinese civil war from 1946 - 1949, ended with the victory of the communists.
Labels: Financial News
Monetary annoyances for Rusia
In the period January - November private foreign capital in Russia has shortened by about 80 U.S. dollars billion, announced the first deputy chairman of the Central Bank of Russia Alexey Ulyukaev mentioned Interfax. For all 2008 to $ 100 billion foreign private capital can leave the country. For the first three quarters Russia was "neutral stance" on supply or the expiration of private capital. The second quarter was a very good first and third were relatively not bad.
Starting from September and October, however, the end of capital is enabling and possibly total for the year will amount to $ 100 billion, is the central banker said. Today, the Russian statistics service said that Russians' incomes declined for the first time since 1999 nominal incomes have increased by 22 percent, but real disposable income of Russians in November was 6.2 percent lower than in November 2007. The reason for the reduction of real income is weakening the Russian currency: after the Central Bank of Russia accelerated devaluation of the ruble, it lost much of its value as compared to EURO-USD only basket during this week's reduction was 6.7 percent.
Falling oil prices and the ghost of recession downward pressure ruble, says agency Bloomberg. The fall that we see now is the same force as in September 1999. As in recent months, Bank Rossia trying to keep the rate of the ruble by buying dollars on the open market, the Russian foreign exchange reserves fell by 27 percent from their levels in early August.
Labels: Financial News
Drops in productional activity of US companies
Manufacturing activity in the Philadelphia region of Notes in December fall under the pressure of deepening recession in the U.S., but the reduction is less than expected. The main economic index, the Federal Reserve Bank of Philadelphia rose during this month to minus 32.9 points in November after the value of the indicator was minus 39.3 points.
In 2007 the average index of manufacturing activity was 5.1 percentage points. Consolidated market expectations were for the index to drop to minus 40 points. Fed index of manufacturing activity in Philadelphia presents the outcome of the inquiry producers in the fifth largest city in the U.S. attitude towards the current economic information, such as values below 0 indicator slowing pace of economic development.
According to the study supporting new orders index in Philadelphia fell to minus 25.2 points after 31.4 points in November. Auxiliary index for the transport of goods decreased to minus 28.7 points in December, this being its lowest level since February 2001 onwards to minus 18.8 points in November. The index of prices paid fell to minus 33.2 points in November after they were registered 30.7 points. The index of producer prices received in Philadelphia in October decreased to minus 33.2 points to minus 30.7 points in November, while the employment index decreased to minus 28.7 points, its lowest level since September 1982 to minus 25.2 points in November. The Indicator of economic expectations of business in Philadelphia for the next six months has increased to pessimism, as its value fell to minus 14.5 points in December to minus 10.4 points in November.
Overall, despite the slight rise in its value indicator remained negative, most of auxiliary indexes signing decreases as the decline in economic expectations shows that likely contraction in economic activity will continue in coming months.
Labels: Business News, Financial News, Politic News
Leading US indexes are falling
The index of U.S. leading indicators fell in November for the fifth month of the last seven months, reflected the deteriorating outlook, which led the Fed to lower interest rates and principal to take the purchase of securities to refinance U.S. companies and stimulate lending. The index of leading indicators are calculated from the Conference Board and aims to determine the direction in which the U.S. economy over the next three to six months.
The value of the index fell by 0.4 percent in November, after decreasing by 0.9 percent in the previous month, reported by the New York-based organization today. This indicator is the average value of the following indicators: production contracts, the amount of requests received unemployment benefits, monetary indicators mass M, the size of the average workweek, building permits, the prices of basic shares' orders for goods for long-term use, the index of consumer confidence. It is believed that he characterized the development of the economy over the past 6 months. Also there is empirical rule that if the value of this indicator has a negative effect for 3 months in succession, it is an indicator of slowing economic development.
Six of forming 10 leading indicator index fell by the biggest reduction is in building permits, stock prices and applications for unemployment benefits.
Labels: Financial News
Unemployment Benefits had been decreased last week
Applications for unemployment benefits in the U.S. fell last week after the top of its rise to 575 000 in the first seven days of December. The number of Americans who receive unemployment benefits decreased by 21 000, to the level of 554 000 during the week to December 13 after the previous reporting period reached their highest level for the past 26 years, showing that the labor market in the U.S. continues to weaken and the country is in recession deepens.
As the market consensus expectations were for a decrease in applications to 558 000. Average last four weeks the number of applications for unemployment benefits is 543 750, which is 26 years of peak average of the indicator.
In November the average was 507 000, as today's data indicate that the situation in the labor market in the U.S. continues to deteriorate despite the reduction in applications for unemployment benefits. The country's economy lost 1.9 million jobs during the first 11 months of this year, the number of short positions in November reached 533 000, which is the largest drop in employment by 1974. U.S. unemployment last month reached over 6.7 percent, this being the highest level of 15 years.
Labels: Business News, Politic News
Bulgaria with special privileges about ecological requirement
With a large majority in Parliament voted in favor of a package of measures for climate and energy. It was adopted a compromise version of the governments of the EU with a total of 6 individual proposals, which gives a group of new member states, including Bulgaria, special privileges. 27-EU States made a commitment until 2020 to reduce the overall level of greenhouse gas emissions in the EU by 20 percent compared with 1990, it is free way to a global program to unprecedented billions in combating dangerous global warming - Press Center reported to the institution in Strasbourg. Until 2020 the share of ecological energy sources such as sun and wind should be increased on average 20 percent of consumption. Currently this share in the EU is 6.4 percent.
Heart of the European program for climate protection is trade in pollution rights. In principle, the industry should pay for these rights: in 2013 20 percent of the certificates must be sold at auction in 2020 - 70 percent and in 2025 - already 100 percent. Eastern Europe receives support in upgrading its outdated and especially environmentally harmful power.
Labels: Politic News
OPEC decreased yield, but the price still goes down
The General Secretary of the Organization of petroleum exporting countries Slem Abdala El Bardi said today that overloaded oil market needs greater reduction of quotas for extraction of oil, Iranian daily reported. A little earlier today, the oil minister of Saudi Arabia Ali al Naimi said that the cartel have reached consensus around a decision to reduce quotas early next year by 2 million barrels per day. Baked today held a regular meeting to determine its policy in Oran, Algeria.
At 15:00, despite the expected decision to reduce quotas for oil extraction got cheaper with 0.53 percent to 43.37 dollars for a barrel. Venezuelan oil minister Rafael Ramirez said the organization will decrease by at least 1 million barrels per day. Russia expressed readiness to provide joint support of the cartel, the lower the yield by 320 000 barrels per day, said Deputy Prime Minister Igor Sechin country. Russia, which is the largest producer of oil outside OPEK, does not consider to accede to the cartel. Azerbaijan, whose representative also attended the meeting as an observer in Oran again considering lowering the yield by 300 000 barrels per day.
Labels: Business News
US Dollar with sudder decrease
The U.S. dollar sharply got cheaper against other major currencies after the Federal committee open market yesterday, in mid-session on U.S. markets, decided to lower the basic rate of the U.S. central bank by 75 basis points to 0.25 percent as a U.S. money make way most low among the currencies of leading industrial countries. Today at the beginning of the session of the European markets with U.S. money cheapen 0.40 percent to 1.4062 dollars to euros.
The dollar remains under pressure from the EUR as news that could negatively impact on the single currency data for inflation in the euro, which is expected to register a decline, showing a deepening recession in the currency union, negative for the dollar probably do will be current account data and applications for mortgage loans in the U.S. The main stock indexes in New York rose sharply upward, as Dow Jones Industrial Average increased by 4.20 per cent to 8 924.14 points, Standard and Poor's 500 by 5.14 percent to 913.18 points and the NASDAQ by 5.41 percent to 1 589.89 points. And since the beginning of the session the U.S. markets, U.S. currency was under pressure from each negative economic data showing a deepening recession in the U.S. after the Fed decision to leave the dollar sharply down. U.S. currency fell to 11-week bottom against the euro and to 13-year bottom against the yen. The cheapen dollar fell to 88.24 yen, the lowest level since August 1995 and against the single currency fell to 1.4192 dollars for euros, its lowest level since 30th September over to British money falls to 1.5611 dollars for the pound.
Profitability of 2, 5, 10 and 30-year U.S. government bonds yesterday reached its lowest levels in history. The index of currency trading in New York, which assesses the movement of U.S. money against 6 major currencies, fell by 0.9 percent to 79.946 points. U.S. markets fell by 13 percent from two and half its annual peak of 1.2330 dollars against the euro to reach October 28.
At the same time the price interbank loans in dollars also decreased by yesterday in London Liborat in dollars decreased by 0.02 percent to 1.85 percent, the lowest level since September 2004 onwards because of speculation that the infusion of dollars of market will continue.
Labels: Financial News
US DOllar continue to decrease its price
In the early weeks of the new trend of the last days and preserve th US dollar get cheaper against the single European currency, and this morning fell to eight-week bottom. On Friday in New York the dollar was worth 1.3369 U.S. dollars today in Tokyo to trade at levels 1.3468 U.S. dollars, for a moment and touched 1.3472 U.S. dollars. The US Dollar against the yen to 90.93 yen to divest from 91.21. On Friday quotes showed 88.53 yen, which is the worst rate of the dollar against the Japanese currency from August 1995. Japanese traders to predict agency Bloomberg that today the rate of the dollar may again fall to 90 yen.
British pound versus the dollar fell to 1.5028 U.S. dollars from 1.4944 U.S. dollars because of expectations for interest rate cuts by the Federal Reserve. Euro rose to 122.47 yen. Cheapen the dollar is now being attributed to speculation that support for car companies will remain in the hands of the government less to protect the financial system, explains Bloomberg.
Nearly 13 years of bottom of the dollar against the yen came even as President George Bush announced that may use funds allocated for the banks to prevent bankruptcy in General Motors and Chrysler.
General manager of FX Nomura Trust claims: no obstacles to the further reduction of the dollar against the yen. Diversion of funds to car companies simply means less funds for banks. Bush told reporters that it is not yet ready to announce its decision on car companies. Last week a bill to help with 14 U.S. dollars billion not passed through the Senate. For four months the dollar regained 24 percent of its value against the euro, but major players of the currency market as Citigroup, Goldman Sachs, BNP Paribas and Bank of America expects in 2009 the US dollar to become cheaper. Factor for this negative attitude is flooding the world "by U.S. politicians and macro-economists with extraordinary 8.5 U.S. dollars trillion put through 23 different plan intended to support the financial system. The big increase the supply of money seems to brake the investors - in a very important moment for the government when it came to the massive sale of debt. However, investors see how the budget and trade deficits grew, and along with this process deliverage in themselves be delayed.
Labels: Financial News
Clasical pyramid for 2 European banks
Two major European banks, Santander Spanish and French BNP Paribas, have made investments in billions of dollars in American broker who is accused of illegal scheme for 50 billion dollars, reported BBC.
Spanish bank announced that its investment in the company, run by Bernard Medoff amounted to 3.1 billions U.S. dollars and the French reported more than 460 U.S. dollars million Medoff is accused of fraud, perhaps one of the biggest in history. According aware, this case may submit even greater uncertainty throughout the industry of hedge funds. Business editor of BBC claims: that big failure accelerates the disappearance of hedge funds. Medoff is practicing classical pyramid - is using the money into his hedge fund from new investors to pay the outstanding contributions of older investors.
Prosecutors allege that Medoff has admitted to fraud, which is by its hedge fund business and investment advisory services Bernard Madoff Investment Services. The thief is a former head of the exchange Nasdaq. 70 years man has been put under the guarantee of 10 million dollars, a federal judge has appointed a check of client accounts and assets of the company Medoff. Entirely appropriate question how European banks are looking to such investor. By BNP Paribas explained that no personal investment in the fund run by Bernard Medoff but have risky holdings through its commercial business and guaranteed lending to hedge funds.
Labels: Business News
Large profits from pertol in poor year
In the worst year for the oil market in history, investors can realize huge profits, just as stored oil, according to Bloomberg. Buyers of levels of 40.81 U.S. dollars on 5th December may sell futures contracts for delivery next December at a price of 54.65 U.S. dollars for a barrel or 34 percent net income.
And after paying for the storage of raw materials and the necessary fees will profit reached 11 percent according to Andy Lipol, president of consulting company Lipow Oil Associates. Profit from such speculation is the largest in 12 monthly futures from 1998 onwards, when the market is overloaded and the price of crude oil fell with 10 US dollars.
Today at the beginning of the session of the European markets for supply contracts of U.S. light crude oil in January to get 5.19 percent, to 42.93 dollars for a barrel after Friday cheapen by 2.86 dollars to 40.81 dollars for a barrel. The appreciation of oil due to the speculation that the next regular meeting of the oil exporting countries of 17th December in Oran, Algeria, the cartel will decide on a new reduction of quotas for mining and supplies on Saturday after the president of the organization Shakib Kelly said to the Associated Press, that a "serious" reduction in quotas.
At the same time, new president of the U.S. Barak Obama announced this weekend in a huge plan of measures to stimulate the economy, which is expected to be created 2.5 million jobs in America. This return of investor optimism M stock and commodity markets and support the appreciation of oil futures. Last week the price of oil fell by 25 percent, which is the largest weekly drop of the first Gulf War in 1991.
Labels: Financial News
