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HenryTo
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rffrydr
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rffrydr
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rffrydr
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rffrydr
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HenryTo
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HenryTo
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Location: Houston, Texas & Los Angeles, California
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 Posted: Mon Mar 17, 2008 1:56 am Post subject: |
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Mortgage resets due to hit the UK:
http://www.dailymail.co.uk/pages/live/articles/news/news.html?in_article_id=536558&in_page_id=1770
| Quote: | More than 320,000 homeowners fear they won't be able to cope with the "payment shock" when their cheap fixed-rate mortgages end.
Around 1.4million face an average monthly rise of £200 while others could be asked for £500 more.
The hardest-hit are already being advised to sell their homes before they are repossessed.
Rising mortgage rates mean that fixed-rate loans taken out a few years ago at 4.3 per cent will be charged at a new fixed rate of 5.6 per cent - or at a standard variable rate of 8 per cent. |
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HenryTo
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lmrhoades
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Joined: 17 Jan 2008
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| Posted: Sun Mar 23, 2008 12:00 pm Post subject: |
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HOw do we trade this henry...any etf's out there to take advantage?
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rffrydr
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| Posted: Mon Mar 24, 2008 8:04 am Post subject: |
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From Numis on "that fateful day"
| Quote: | Wave 3 Higher impairment, recession lower loan demand and more saving: This is the traditional point in the cycle where banks see profitability decline. The surge in unsecured impairment eighteen months ago was linked to excessive indebtedness (which still remains) rather than the economy which was growing above trend with full employment. The household savings ratio is 3.4%, the 35 year average is
8.1% and the last cyclical peak was in 1992 at 11.7%. This is key to the UK’s economic performance as savings and consumption are inversely correlated and circa 70% of GDP is consumption. A return to the average savings ratio will drive recession with an increase in unemployment corporate and personal insolvency. If this drives the pound to PPP equilibrium 1.62 vs. the dollar inflation will be imported into the UK and this could drive the nightmare scenario where the BoE increases interest rates heading into recession.
How much is priced in and what is the right investment strategy: We believe that much of the risk is now priced in but in many cases the situation is binary either the stocks are worth double or nothing. Bradford & Bingley (Target price 193p) has a leveraged balance sheet and is exposed to relatively risky assets. Cattles (Target price 215p) is the most exposed to a weakening macro picture. It does have a strong balance sheet (with significant liquidity risk in 2009) and a high ROE but its assets are entirely sub prime. Its customers (40% have mortgages) will be hit hardest by credit tightening, have a propensity not to pay even in good times and have a weak employment track record. Strategically we like HBOS (Target price 1007p) which has a 44% average LTV on its predominantly prime mortgage book, the strongest liabilities franchise of any UK Bank and is being valued at just 1.1x book. |
Double or nothing: that's how you trade it.
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Today is the Tomorrow you worried about Yesterday! |
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HenryTo
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| Posted: Tue Mar 25, 2008 9:00 pm Post subject: |
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King taking a lot of heat as LIBOR surges:
http://www.bloomberg.com/apps/news?pid=20601102&sid=apjgrt9zhyfQ&refer=uk
| Quote: | Lawmakers are looking for signs that King is willing to take further action after the cost of borrowing pounds rose for 11 straight trading days, reaching the highest since December yesterday. King, who last year drew fire for not preventing a run on Northern Rock Plc, is facing calls to follow Federal Reserve Chairman Ben S. Bernanke and widen the range of collateral the central bank accepts in return for funding.
``We need to understand why King is moving at a snail's pace compared to the Fed,'' Michael Fallon, a Conservative lawmaker who sits on the Treasury Committee, said in an interview. ``It looks as if he's being pushed into widening collateral and increasing liquidity, but remains reluctant. We need to probe and find out why.''
The three-month London interbank offered rate, or Libor, for pounds climbed to 6 percent yesterday, the most since December 28. Banks worldwide are curtailing credit as writedowns and losses from the U.S. subprime mortgage market collapse mount. |
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HenryTo
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| Posted: Sat Apr 12, 2008 4:03 pm Post subject: |
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The Economist on the British housing boom, and now subsequent bust:
http://www.economist.com/world/britain/displaystory.cfm?story_id=11024646
The latest 25 bps cut has done nothing for the UK - it seems like at some point, the British government would need to move into the markets and start buying mortgages to help lower mortgage rates and mortgage resets. |
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HenryTo
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| Posted: Tue May 27, 2008 9:49 am Post subject: |
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Sharp rise in UK mortgage delinquencies:
http://www.ft.com/cms/s/0/9a3c01d6-2b60-11dd-a7fc-000077b07658.html
| Quote: | More than a fifth of UK homebuyers who have a chequered credit history have fallen behind on their mortgage payments and even those with top-quality ratings have seen a statistically significant rise in delinquencies in the first three months of this year.
.....
Potentially more worrying is the small but notable increase in delinquency rates among prime mortgage-holders.
In a report on the performance of securities in this vastly larger market, S&P calculated mortgage delinquency rates for the first quarter of 2008 were 2.41 per cent while payments 90 days or more overdue were 0.79 per cent. S&P said this represented a “sharp” rise from the previous quarter when the figures were 2.11 per cent 0.62 per cent respectively.
S&P stressed that the numbers remained very small and Sean Hannigan, a director and credit analyst at S&P said: “We have seen numbers like this two years ago.” However, he added: “The difference today is that borrowers are not being helped by rising house prices as they have been in recent years,” he said. “In previous years, homebuyers in difficulty could find another lender to refinance the mortgage. It could mean that now more homes wind up in repossession.”
The fact that a rise is occurring while employment is strong and interest rates low suggests that it may not only be macroeconomic factors making it hard for homeowners to pay their debts. |
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HenryTo
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