Mortgage bail-out rallies markets, Light at the end of the credit crunch tunnel.

justpurchased

stonethrower wrote: »

I cant see why the markets have reacted this way when it was fairly obvious that the US government was going to take them over.

Would you bet on it until it was in black and white! Obviously not or you would be running round the room saying I’m rich I’m rich.;)

justpurchased

Nearly 4% now,
But the £ as taken a hammering against the $ today.(I did leave that open for someone all day and no takers.;) )

baby_boomer

Welcome back jp, assuming that you are the same jp who just left the forums.

The scale of the rescue just goes to show how serious the problem is. The recovery in share prices is because an element of downside risk has been removed from the world economy.

But that doesn't mean UK house prices are going to stop falling - the boss of the Nationwide has just said they'll carry on falling until 2010.

Mortgage finance will continue to be hard to find, and fear of capital loss will continue to be in the back of every purchaser's mind.

justpurchased

baby_boomer wrote: »

Welcome back jp, assuming that you are the same jp who just left the forums.

The scale of the rescue just goes to show how serious the problem is. The recovery in share prices is because an element of downside risk has been removed from the world economy.

But that doesn't mean UK house prices are going to stop falling - the boss of the Nationwide has just said they'll carry on falling until 2010.

I agree, Just that it as eased some of the unease in our banking sector I class as good news for everyone.

napoleon

baby_boomer wrote: »

Welcome back jp, assuming that you are the same jp who just left the forums.

.

Yes, it's him I think - the very same drama queen. I wonder how long he's back for, you'd think he was doing us favour or something.

" I'm off" every 5 minutes. :rotfl:

mewbie_2

justpurchased wrote: »

I agree, Just that it as eased some of the unease in our banking sector I class as good news for everyone.

When I first heard the news I assumed it meant things were really bad, a sort of stamp of approval on the awfulness of the situation, US unable to find any suckers worldwide to help their mortgage and bank situation.

Then I saw the slant that you had put on it and picked up some anecdotal evidence today, and I have to say I was so wrong. It's obviously brilliant news and has immediately affected my daily life.

Just a few things that have made me more positive today.

Post through the door - letters from gas and leccy - bills being reduced from next month.
Filled car with petrol - 10% cheaper than yesterday.
Bit of food shopping, all items reduced, some by more than 15%
At work they are busy hiring people, and apparently we are all in for an inflation busting 23% rise in a couple of months.
Checked Property Bee and prices already beginning to rise. Rents also, which means that for BTL's they may reach break even in terms of rents v. mortage in less than 10 years.

So yup, it's all good, thanks for sharing from your endless fount of repetitive wisdom..

chewmylegoff

justpurchased wrote: »

With shares in banks going through the roof. Do we think this has got rid of a lot of the sub-prime risks posed to the UK banks?

shares in banks have not gone through the roof. although their increase today looks significant when considered in isolation, the rise only puts them back to about where they were a month ago. for bank stocks to recover they need to triple.

the nationalisation has more to do with worries in the US that the mortgage companies were failing to provide affordable credit - the US government is not underwriting losses on existing subprime debt, so there may still be significant write downs to come.

this is a decent bit of news for the financial sector but it is more a glimmer of hope than the beginning of the end.

ManAtHome

justpurchased wrote: »

Nearly 4% now,
But the £ as taken a hammering against the $ today.(I did leave that open for someone all day and no takers.;) )

Just the dollar going up - pound v euro not changed much. Bit weird that - it's only a change from "we'll sort-of pay out" to "we'll definitely pay out", so can understand the finance sector bouncing, but seems a bit of a knee-jerk in others. Need somebody to clever to explain the dollar rise - would have thought (explicitly) taking on debt would depress the currency.

chewmylegoff

ManAtHome wrote: »

Just the dollar going up - pound v euro not changed much. Bit weird that - it's only a change from "we'll sort-of pay out" to "we'll definitely pay out", so can understand the finance sector bouncing, but seems a bit of a knee-jerk in others. Need somebody to clever to explain the dollar rise - would have thought (explicitly) taking on debt would depress the currency.

don't know if these two will be responsible for the full effect but they will certainly have had some impact:

i) oil prices fell to a 5 month low - almost back to $100 a barrel.

ii) the news about freddie mac and fannie mae is generally positive for the US economy thus strengthening its currency.

justpurchased

chewmylegoff wrote: »

this is a decent bit of news for the financial sector but it is more a glimmer of hope than the beginning of the end.

I agree, but you don't get much nowadays.;)