Europe - Economic Data & News 01 (May 08 - Oct 08)

Re: Europe - Economic Data & News

Postby millionairemind » Mon Oct 20, 2008 10:00 am

House prices are close to affordable levels, reveals survey
House prices are already "fair value" and are fast approaching "affordable" levels, according to research commissioned by The Daily Telegraph

The Daily Telegraph/Lombard Street Research Housing Affordability Index shows that houses have become significantly less overvalued in recent months.

However, households should not expect prices to bounce back as fast as they did in the past, the economic consultancy warned.

The news may reassure homeowners, since a growing number of economists had predicted that prices would drop by as much as 30pc or 40pc in the coming years. In fact, Diana Choyleva, director of Lombard Street Research, said prices were unlikely to fall much more than 20pc, and should stop falling by mid to late next year.

"We think that house prices could bottom out mid to late next year," she said. "However, it's going to be a prolonged adjustment – even after prices hit the trough they won't recover swiftly or decisively, they will languish at the bottom. It all hinges on how the Government will use its quiet control of the banks."

As part of its semi-nationalisation of UK banks, the Treasury has agreed that the financial institutions will increase their lending levels to their 2007 pre-crunch levels. However, economists are sceptical about whether such an aspiration can really be fulfilled.

The affordability index, in which 100 points represents the average affordability level since the early 1960s and a lower figure means prices are more overvalued, improved from 88.9 points to 93 points. Since reaching a 16-year low affordability level of just under 83 points last year, at the peak of the housing boom, it has improved by around 10pc.

Importantly, the index takes into account the cost of mortgages as well as households' disposable incomes, so it reflects the fact that families' costs have increased as a result of the credit crunch.

Ms Choyleva said: "The affordability indicator has improved. This is an entirely different situation to the early 1990s. It never hit the same high levels of unaffordability."

Almost all City economists now expect the UK to suffer a recession in the coming 12 months, with some anticipating as sharp a slowdown as experienced in the early 1990s. The Office for National Statistics reported last week that unemployment is rising at the fastest rate since 1991, climbing to 1.8m, or 5.7pc of the working age population.

But Ms Choyleva said many employees are cutting their costs by reducing wages rather than staff numbers. She said: "We expect a fairly significant correction which would involve a recession and 0-0.5pc growth next year, but then in 2010 things should improve.

"Unemployment is unlikely to reach the rates it hit in the early 1990s. So there is less potential for forced sales than there was in the early 1990s."
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Re: Europe - Economic Data & News

Postby blid2def » Tue Oct 21, 2008 2:27 am

http://www.telegraph.co.uk/finance/brea ... ilout.html

Financial crisis: ING’s €10bn bailout
ING’s €10bn bailout comes with a carrot, but also a stick.

By Jeffrey Goldfarb, breakingviews.com
Last Updated: 6:21PM BST 20 Oct 2008

At the current share price, the Dutch authorities are paying a premium for a scheme that doesn't punish the bank’s shareholders with dilution – more lenient than some national bailout schemes. But the government isn’t letting ING off the hook.

The Dutch scheme injects capital with some sleight of hand. ING gets its €10bn of debt-like securities classified as core Tier 1 capital. ING must pay a minimum 8.5pc coupon to the authorities – but only if shareholders get a dividend. If ING doesn’t pay a dividend, it can escape the government’s stick, but only by beating its own shareholders too.

This is a light touch compared to the UK bailout, where the government is set to take big stakes that will dilute shareholders, and also may ban dividends until its preference shares are repaid.

But the Dutch do take their pound of flesh. For starters, the authorities are reining in compensation and getting two seats on ING’s board. They’re also exacting a financial price.

Any time ING opts to pay a dividend, it must pay the government its 8.5pc coupon. If the company wants to reward shareholders with a dividend of at least €0.85, the government gets more. In 2008, the authorities are entitled to 10pc more than the dividend; in future years, it’s at least 20pc extra.

What’s more, if ING wants the government off its back, it must pay €15bn for the €10bn injection. Alternatively, after 2011 ING can swap the state's stake into ordinary shares - but if the state doesn't like the deal it can get its money back in cash.

If ING’s shares recover quickly, the company will have the money and the incentive to pay back the €15bn to secure its freedom. The new core Tier 1 capital ratio of 8pc has definitely reassured investors, who pushed the shares up by 22pc on October 20. But with the shares still at €8.5, there's still some way to go.

For more agenda-setting financial insight, visit breakingviews.com
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Re: Europe - Economic Data & News

Postby kennynah » Tue Oct 21, 2008 2:30 am

hence reason 4 ing to be up 25% tonite
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Re: Europe - Economic Data & News

Postby blid2def » Tue Oct 21, 2008 2:36 am

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Re: Europe - Economic Data & News

Postby millionairemind » Tue Oct 21, 2008 10:28 am

French government pours 10.5b euros into six banks
Posted: 21 October 2008 0452 hrs

PARIS: The French government will inject 10.5 billion euros (14 billion dollars) into the country's six biggest banks, Finance Minister Christine Lagarde said on Monday.

Among the beneficiaries, the biggest bank Credit Agricole will get three billion euros, BNP Paribas will get 2.55 billion and Societe Generale will get 1.7 billion, in moves to support lenders hit by the financial crisis.


Credit Mutuel will receive 1.2 billion, Caisse d'Epargne 1.1 billion and Banque Populaire 950 million, to ensure banks are "able to finance the economy correctly," Lagarde told reporters after meeting with the heads of the banks.

French lawmakers last week approved a 360-billion-euro package to rescue banks. Several European countries had agreed to plough capital into the hardest-hit banks and massively underwrite loans between financial players.

Under the plan, the French state provides 40 billion euros to recapitalise fragile banks - the source of the payouts agreed on Monday night.

Last week's plan also provides for up to 320 billion euros in inter-bank loan guarantees to overcome the credit crisis.

President Nicolas Sarkozy has pledged that no French bank will be allowed to collapse and that savers will not lose "a single euro" in the global turmoil unleashed by the collapse of US investment giant Lehman Brothers last month. - AFP/de
"If a speculator is correct half of the time, he is hitting a good average. Even being right 3 or 4 times out of 10 should yield a person a fortune if he has the sense to cut his losses quickly on the ventures where he has been wrong" - Bernard Baruch

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Re: Europe - Economic Data & News

Postby millionairemind » Thu Oct 23, 2008 8:00 pm

Jialat, one by one they are all come down like bowling pins. :o

Developing Nation Debt Costs Soar as Belarus Joins IMF Requests
By Denis Maternovsky and Laura Cochrane

Oct. 23 (Bloomberg) -- Developing nations' borrowing costs jumped to the highest in six years as Belarus joined governments seeking a bailout from the International Monetary Fund to help weather the credit crisis and slump in commodities.

The extra yield investors demand to own emerging-market government bonds instead of U.S. Treasuries rose 25 basis points to 8.27 percentage points, the most since November 2002, according to JPMorgan Chase & Co.'s EMBI+ index. The annual cost to protect Russia's bonds from default soared 1.3 percentage points to 10.8 percent of the debt insured, the highest in at least eight years, according to CMA Datavision.

``There is now no safe haven globally other than a deeply indebted U.S. government,'' said Jim Reid, head of fundamental credit strategy at Deutsche Bank AG in London. ``The events of the last few days are categorical evidence of the globalization of the credit crunch and its subsequent problems.''

Ex-Soviet Belarus followed Iceland, Pakistan, Hungary and Ukraine in requesting emergency loans as the global financial crisis limits its ability to borrow, the IMF said yesterday. Argentina's lawmakers are attempting to stop President Cristina Fernandez de Kirchner seizing pension funds from money managers, as the country risks defaulting for the second time this decade.
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http://www.bloomberg.com/apps/news?pid= ... refer=home
"If a speculator is correct half of the time, he is hitting a good average. Even being right 3 or 4 times out of 10 should yield a person a fortune if he has the sense to cut his losses quickly on the ventures where he has been wrong" - Bernard Baruch

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Re: Europe - Economic Data & News

Postby HengHeng » Thu Oct 23, 2008 8:21 pm

time to look into them to see. Sure alot of vultures cycling them...


Legal ah long .. waiting for them to burst then go in and take all the remaining assets they have.
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Re: Europe - Economic Data & News

Postby kennynah » Fri Oct 24, 2008 3:13 am

but we must discern....belarus, iceland, ireland...we tend to lump them into eurozone...they are not...these are smaller economies subject to external economies...as they are smaller in population size... more importantly is to monitor germany, france, italy and spain...these are sizeable land mass countries with sizeable population..and their exports account for a huge portion of their wealth...a weakened euro now..and if sustained for another 3 months will surely boost their exports ...exports of cars, planes, watches, clothes....albeit at a slower pace...
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Re: Europe - Economic Data & News

Postby winston » Fri Oct 24, 2008 7:47 am

[quote="kennynah"] more importantly is to monitor germany, france, italy and spain...these are sizeable land mass countries with sizeable population..[quote]

Don't quite agree. France,Italy & Spain are no longer economic powers. I would watch only the UK & Germany...
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Re: Europe - Economic Data & News

Postby winston » Sat Oct 25, 2008 3:29 pm

Dear All,

I have moved the last few discussions on handbags into a new thread titled "Shopping", located in the Misc. Section.

Take care,
Winston
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