WILL THE CURRENT MONEY CRISIS AFFECT US?
Discussion
I would agree that housing is indeed the key to the real economy. The recent rapid rise in prices has been fuelled by an abundance of cheapcredit available. However, now the days of 120% and 5 times salary mortgages are gone, the money made available to house buyers is severely diminished. Prices will therefore now come down to meet demand, or what people can now afford to pay. At the top end, City bonuses have in part kept the Southern market buoyant ... that pool of disposable income is also severely depleted and will reduce what people can afford atthe top end ... either way, less money chasing houses means prices must fall.
Stupid question perhaps but i come from the Netherlands and i do not know what Abbey is. Perhaps you know some banks who give high rates on the euro too!!I get about 4% on the euro in the Netherlands. Any tips???
Perhaps i converst some of my euro's in pounds. Do you think this is a wise thing to do? Pound is kinda stable against the euro is it not?
Thanks for the help Fred
Perhaps i converst some of my euro's in pounds. Do you think this is a wise thing to do? Pound is kinda stable against the euro is it not?
Thanks for the help Fred
Fred,
with euro rates at 4% and libor in 3 months at 4.40% ish you wont get much better than 4% in your euro deposits. In fact if you did, i would worry about the credit worthiness of the bank offering it! there was one (spanish i think) bank offering i think it was 11% in sterling (min 3k max 30k, fixed term) who had to issue a press release later in the day stressing they werent in financial trouble.
in theory if you were to exchange your euros for Gbp then deposit your money here and gain the extra income, by the time you were to exchange it back the fx should have moved against you by roughly the same amount as you would have gained via the better rate in the UK. In reality, that doesnt always happen, hence what is known as the carry trade the typical example of which is borrowing money from japan at zeroish and lending in a high interest rate country. But you ARE running the risk that the fx costs you more than the extra income you would earn. This can be hedged (protected against) via fx forwards but by the time you have done that there wont be income left.
thats the theory anyhow, reality can be quite different..
with euro rates at 4% and libor in 3 months at 4.40% ish you wont get much better than 4% in your euro deposits. In fact if you did, i would worry about the credit worthiness of the bank offering it! there was one (spanish i think) bank offering i think it was 11% in sterling (min 3k max 30k, fixed term) who had to issue a press release later in the day stressing they werent in financial trouble.
in theory if you were to exchange your euros for Gbp then deposit your money here and gain the extra income, by the time you were to exchange it back the fx should have moved against you by roughly the same amount as you would have gained via the better rate in the UK. In reality, that doesnt always happen, hence what is known as the carry trade the typical example of which is borrowing money from japan at zeroish and lending in a high interest rate country. But you ARE running the risk that the fx costs you more than the extra income you would earn. This can be hedged (protected against) via fx forwards but by the time you have done that there wont be income left.
thats the theory anyhow, reality can be quite different..
http://www.abbey.com/csgs/Satellite?c=GSProducto&a...
looks like you have to buy something else to get it, i couldnt be bothered to read the details
looks like you have to buy something else to get it, i couldnt be bothered to read the details
Mystic said:
[6 September 2007] For what its worth: A close study of the US Dow Jones market from 1792 will reveal that there are many cycles operating at the same time and the Dow Jones index chart/graph is merely their aggregation (or composite).
The current drop in prices is the result of a 22 month UP cycle coming to an end (I’ve been waiting for it since 2005). There is also a 5 year UP cycle coming to an end very shortly and when this bites you may see falls greater than those seen in the last couple of months (especially if some of the smaller cycles turn down at the same time).
The Supercar car market has its own cycles and there may not be a correlation with the Dow Jones.
The drop in the Dow today, through some short term resistance levels (see chart), may be the start of the drop that may see a few City bonuses evaporate - if this turns out to be the case, one can wonder what effect it will have on supercar orders/demand.The current drop in prices is the result of a 22 month UP cycle coming to an end (I’ve been waiting for it since 2005). There is also a 5 year UP cycle coming to an end very shortly and when this bites you may see falls greater than those seen in the last couple of months (especially if some of the smaller cycles turn down at the same time).
The Supercar car market has its own cycles and there may not be a correlation with the Dow Jones.
andy355 said:
Fred,
with euro rates at 4% and libor in 3 months at 4.40% ish you wont get much better than 4% in your euro deposits. In fact if you did, i would worry about the credit worthiness of the bank offering it! there was one (spanish i think) bank offering i think it was 11% in sterling (min 3k max 30k, fixed term) who had to issue a press release later in the day stressing they werent in financial trouble.
..
Andy, any chance of getting the details of the Spanish Bank. I've got a lump sum I want to bank rather than invest long term and im looking for the best deal. Cheerswith euro rates at 4% and libor in 3 months at 4.40% ish you wont get much better than 4% in your euro deposits. In fact if you did, i would worry about the credit worthiness of the bank offering it! there was one (spanish i think) bank offering i think it was 11% in sterling (min 3k max 30k, fixed term) who had to issue a press release later in the day stressing they werent in financial trouble.
..
i will try to find the story tomorrow, but bear in mind this was a while ago now. I had never even heard of bank before so it wasnt a big name
One thing i would say though is that among the banking professionals on here (of which there are a few) there wouldnt be many amongst us looking for the best deal on our cash, more likely looking for the safest place to keep it.
banks are under severe stress at the moment, and there are lots of skeletons in cupboards. My (boring) advice would be spread any deposits amongst banks registered in the uk up to the government guarantee limit and start with the biggest names first. Or else buy a 100% secure investment like gilts or premium bonds even. Year end will be when something bad happens if it does. So say you were to lose out on 2% by investing somewhere safe rather than risky for say 3 month that would be per 100k 100,000 *2%/365*90=493 Ok 500 extra quid is nice to have but not in my oppinion worth risking
I dont mean so sound scary but we are in unknown territory here, which is why in the markets safe assets are trading at a massive premium and risky ones cant find buyers..
One thing i would say though is that among the banking professionals on here (of which there are a few) there wouldnt be many amongst us looking for the best deal on our cash, more likely looking for the safest place to keep it.
banks are under severe stress at the moment, and there are lots of skeletons in cupboards. My (boring) advice would be spread any deposits amongst banks registered in the uk up to the government guarantee limit and start with the biggest names first. Or else buy a 100% secure investment like gilts or premium bonds even. Year end will be when something bad happens if it does. So say you were to lose out on 2% by investing somewhere safe rather than risky for say 3 month that would be per 100k 100,000 *2%/365*90=493 Ok 500 extra quid is nice to have but not in my oppinion worth risking
I dont mean so sound scary but we are in unknown territory here, which is why in the markets safe assets are trading at a massive premium and risky ones cant find buyers..
It all about sentiment - and right now it does not look pretty. The fine art market took a tumble yesterday with Sotheby's sharply down this morning. This does not indicate that people are running out of money but rather that they stop spending it. I think we are in for a mayor downturn and offcourse it will have implications on car residuals and premiums. I have been looking into acquiring a 599 and premiums to list on 6 months old cars is fast comming down. Waiting lists will shrink as fewer cars will go to the US due to the EUR/USD rates which frankly puts a Ferrari or DBS out of reach for many Americans, and hence the manufacturers will allocate more cars to Europe as a result. Fuel is going up rapidly and the congestion charge will increase to 25 quid from February. There is only one way for car prices to go - and it is not up.
Edited by clorenzen on Friday 9th November 10:36
Have seen a few cancelled Ferraris and Porsche's in my local dealer in the last few weeks. Perhaps people are getting cautious? Business wise, I know of a few firms who have had their client's mortgage offers withdrawn after exchange of contracts ... haven`t heard of that since the 1990's. Not just residential, but commercial / property developers also.
The above is fuelling my sceptism of the economy at the moment - I was all set to get myself a 997 Turbo a few months back. I have since decided against it I am looking to spend the cash on a new house instead - developers in my area appear to be getting nervous and are open to good offers for quick completions; one developer I know of is now back offering stamp duty payments, legal fees and decoration costs as part of the deal; something they withdrew a few months back with buoyant sales.
The above is fuelling my sceptism of the economy at the moment - I was all set to get myself a 997 Turbo a few months back. I have since decided against it I am looking to spend the cash on a new house instead - developers in my area appear to be getting nervous and are open to good offers for quick completions; one developer I know of is now back offering stamp duty payments, legal fees and decoration costs as part of the deal; something they withdrew a few months back with buoyant sales.
Andy
Seriously appreciate the advice. The amount im looking at is indeed over 100K but im looking to place it for over 12 months as im moving abroad and i would like to see how the economy and markets perform over the next 6 months before investing. If it starts to downturn then i'll leave it in savings or so.
My personal opinion is that we are heading towards a major correction in property and markets. The economy is on a very fine balancing point at the moment and I think US will go into recession. I think also a major factor is that confidence is fast disappearing and joe average's line of credit is running thin. At the end of the day if the average person cant afford to spend, and also cant afford to finance his debts, then we truely are buggered.
Saying that great pickings for those with cash when the markets to pick up.
Seriously appreciate the advice. The amount im looking at is indeed over 100K but im looking to place it for over 12 months as im moving abroad and i would like to see how the economy and markets perform over the next 6 months before investing. If it starts to downturn then i'll leave it in savings or so.
My personal opinion is that we are heading towards a major correction in property and markets. The economy is on a very fine balancing point at the moment and I think US will go into recession. I think also a major factor is that confidence is fast disappearing and joe average's line of credit is running thin. At the end of the day if the average person cant afford to spend, and also cant afford to finance his debts, then we truely are buggered.
Saying that great pickings for those with cash when the markets to pick up.
Gassing Station | Supercar General | Top of Page | What's New | My Stuff