WILL THE CURRENT MONEY CRISIS AFFECT US?
Discussion
Murcielago_Boy said:
Pugsey said:
Murcielago_Boy said:
(back to cars: well there's literally loads of people I know running around in sports cars after re-strapping their houses. No house wealth = no Lambo - you can do the maths)
Yep sure can do the maths and - IMHO - anyone who re-straps their house to anywhere near it's equity limit to buy a Lambo or what-have-you is barking in my opinion. Always amazed when I see cars like this parked on driveways of properties worth way below £1m. Maddness. But hey ho each to his own. Personally if I'm going to risk my 'house wealth' it'll sure be on something more important than a car. But then I've always been a 'one step forward, consolidate, then another step forward' kind of guy rather than 'three steps forward, oh dear, three steps back' type.Edited by Pugsey on Friday 7th September 17:32
Your property in London worth £500,000 last year, now worth £1m.
Your Murcielago would only cost you resi mortgage rate? (6.0%)
Go on treat yourself - you only live once.
right?????
Edited by Pugsey on Sunday 9th September 17:00
Gammaman said:
tony h said:
i have been trading 3 mth rates for over 15 years and never before seen a squeeze like this on 3mth ster, euribor and dollar libor - here's a free tip, dont sell puts
How about Pibor in the Early 90's?I think we should re-visit this topic in light of the recent events with Northern Rock (and others to come I believe).
Keeping it car related - I wonder what impact this will have on the wider economy and thus Supercar and Hypercar prices??
I suspect SuperCar prices might falter somewhat - I'm not sure about HyperCar prices though - things are slightly different in that rarified atmosphere?
I was about to push the button on a Carrera GT - but I think I will sit back and wait for a couple of months 1) to see how this whole thing pans out - and if there is any fallout on pricing casued by this and 2) to see if prices soften anyway in the winter months??
Thoughts?
dealmaker said:
I think we should re-visit this topic in light of the recent events with Northern Rock (and others to come I believe).
Keeping it car related - I wonder what impact this will have on the wider economy and thus Supercar and Hypercar prices??
I suspect SuperCar prices might falter somewhat - I'm not sure about HyperCar prices though - things are slightly different in that rarified atmosphere?
I was about to push the button on a Carrera GT - but I think I will sit back and wait for a couple of months 1) to see how this whole thing pans out - and if there is any fallout on pricing casued by this and 2) to see if prices soften anyway in the winter months??
Thoughts?
Interesting you should say that............was just about to press the button on a Carrera GT too but a few things - just life in general - got in the way. The seller took the small delay to mean something more sinister and without prompting lopped quite a chunk off the price in return for an immediate deal. Now you may say this just suggests we hadn't negotiated a good enough deal in the first place but I don't think that's the case - I think the price is now very, very good. The guys finance base is city orientated and I get the impression he's rationalising now before he actually has too - maybe trying to keep ahead of any coming fallout. Maybe we should have waited a bit longer but hey you can keep doing that and end up with nothing - it's a car I want to drive, not stocks and shares after all. Off to Switzerland to pick the car up - along with an F1 - next week. Should be a fun trip!Keeping it car related - I wonder what impact this will have on the wider economy and thus Supercar and Hypercar prices??
I suspect SuperCar prices might falter somewhat - I'm not sure about HyperCar prices though - things are slightly different in that rarified atmosphere?
I was about to push the button on a Carrera GT - but I think I will sit back and wait for a couple of months 1) to see how this whole thing pans out - and if there is any fallout on pricing casued by this and 2) to see if prices soften anyway in the winter months??
Thoughts?
Pugsey said:
Interesting you should say that............was just about to press the button on a Carrera GT too but a few things - just life in general - got in the way. The seller took the small delay to mean something more sinister and without prompting lopped quite a chunk off the price in return for an immediate deal. Now you may say this just suggests we hadn't negotiated a good enough deal in the first place but I don't think that's the case - I think the price is now very, very good. The guys finance base is city orientated and I get the impression he's rationalising now before he actually has too - maybe trying to keep ahead of any coming fallout. Maybe we should have waited a bit longer but hey you can keep doing that and end up with nothing - it's a car I want to drive, not stocks and shares after all. Off to Switzerland to pick the car up - along with an F1 - next week. Should be a fun trip!
Can I ask, are you getting a PGT and a Mac F1? If so, please please please post some pics up of the trip home! 
Enjoy the drive.
LittleBro said:
Pugsey said:
Interesting you should say that............was just about to press the button on a Carrera GT too but a few things - just life in general - got in the way. The seller took the small delay to mean something more sinister and without prompting lopped quite a chunk off the price in return for an immediate deal. Now you may say this just suggests we hadn't negotiated a good enough deal in the first place but I don't think that's the case - I think the price is now very, very good. The guys finance base is city orientated and I get the impression he's rationalising now before he actually has too - maybe trying to keep ahead of any coming fallout. Maybe we should have waited a bit longer but hey you can keep doing that and end up with nothing - it's a car I want to drive, not stocks and shares after all. Off to Switzerland to pick the car up - along with an F1 - next week. Should be a fun trip!
Can I ask, are you getting a PGT and a Mac F1? If so, please please please post some pics up of the trip home! Enjoy the drive.
Should qualify this by explaining that a small group of us - myself and three mates - formed a small syndicate a while back and are buying a few cars to share (I only show my own personal cars on my PH profile therefore). Tend to keep our 'stable' low key/profile for all sorts of reasons but will post a few pics if other guys are cool with this.Good call to re-open this thread. I believe we are not out of the woods yet and that the luxury goods market will take a hit.
Pugsey, your joint ownership is interesting and something I have been thinking about myself. One of the major problems I have in justifying cars is that I get so little use out of them. I can't seem to come to terms with 100k just sat in the carpark doing nothing. I barely use my cerbera, usually twice a month, so just as well it is cheap.
Pugsey, your joint ownership is interesting and something I have been thinking about myself. One of the major problems I have in justifying cars is that I get so little use out of them. I can't seem to come to terms with 100k just sat in the carpark doing nothing. I barely use my cerbera, usually twice a month, so just as well it is cheap.
well i've cancelled my gallardo purchase plan in favour of a RS4. A lot of investors have gone cold on projects they were previously favourable towards and its already biting into my business so with debt funding so hard to come by and non investment in the market and a lot of people chasing the same small pots of money i would rather keep my cash liquid in my business to weather any potential recession rather than tied up in a supercar that may prove to be unsalable.
if banks start cutting back on underwriting big asset lending on high risk stuff like supercars its bound to affecr sales, and with a slumping property market and flat stock market where are all the property developers et al going to get hte cash to make those 2 grand a month repayments anyway??
i think there is worse to come.
if banks start cutting back on underwriting big asset lending on high risk stuff like supercars its bound to affecr sales, and with a slumping property market and flat stock market where are all the property developers et al going to get hte cash to make those 2 grand a month repayments anyway??
i think there is worse to come.
ro_butler said:
Good call to re-open this thread. I believe we are not out of the woods yet and that the luxury goods market will take a hit.
Pugsey, your joint ownership is interesting and something I have been thinking about myself. One of the major problems I have in justifying cars is that I get so little use out of them. I can't seem to come to terms with 100k just sat in the carpark doing nothing. I barely use my cerbera, usually twice a month, so just as well it is cheap.
Yes, that was part of our thinking. It is very common indeed to see small (or even large come to that) aircraft owned by syndicates - pop in to any small airfield and there will be any number of syndicate memberships for sale on the notice board so why not cars? Four guys will only have to stump up £25k for a £100k car - and of course maintenance, insurance and depreciation are all divided by four too.Pugsey, your joint ownership is interesting and something I have been thinking about myself. One of the major problems I have in justifying cars is that I get so little use out of them. I can't seem to come to terms with 100k just sat in the carpark doing nothing. I barely use my cerbera, usually twice a month, so just as well it is cheap.
Edited by Pugsey on Monday 17th September 15:15
lambogenie said:
well i've cancelled my gallardo purchase plan in favour of a RS4. A lot of investors have gone cold on projects they were previously favourable towards and its already biting into my business so with debt funding so hard to come by and non investment in the market and a lot of people chasing the same small pots of money i would rather keep my cash liquid in my business to weather any potential recession rather than tied up in a supercar that may prove to be unsalable.
if banks start cutting back on underwriting big asset lending on high risk stuff like supercars its bound to affecr sales, and with a slumping property market and flat stock market where are all the property developers et al going to get hte cash to make those 2 grand a month repayments anyway??
i think there is worse to come.
I guess alot of people are like yourself putting off a purchase to see how bad it is. Problem is confidence is taking a real hit and this is what could spell real problems. If it starts to leak into the "real" economy and not just the banking sector then there will be pain. Just remember how many car dealers caught fire at the beginning of the 90s? if banks start cutting back on underwriting big asset lending on high risk stuff like supercars its bound to affecr sales, and with a slumping property market and flat stock market where are all the property developers et al going to get hte cash to make those 2 grand a month repayments anyway??
i think there is worse to come.
runway78 said:
lambogenie said:
well i've cancelled my gallardo purchase plan in favour of a RS4. A lot of investors have gone cold on projects they were previously favourable towards and its already biting into my business so with debt funding so hard to come by and non investment in the market and a lot of people chasing the same small pots of money i would rather keep my cash liquid in my business to weather any potential recession rather than tied up in a supercar that may prove to be unsalable.
if banks start cutting back on underwriting big asset lending on high risk stuff like supercars its bound to affecr sales, and with a slumping property market and flat stock market where are all the property developers et al going to get hte cash to make those 2 grand a month repayments anyway??
i think there is worse to come.
I guess alot of people are like yourself putting off a purchase to see how bad it is. Problem is confidence is taking a real hit and this is what could spell real problems. If it starts to leak into the "real" economy and not just the banking sector then there will be pain. Just remember how many car dealers caught fire at the beginning of the 90s? if banks start cutting back on underwriting big asset lending on high risk stuff like supercars its bound to affecr sales, and with a slumping property market and flat stock market where are all the property developers et al going to get hte cash to make those 2 grand a month repayments anyway??
i think there is worse to come.
Edited by Pugsey on Tuesday 18th September 11:37
Am i being silly here or should the old motto that i was brought up on be applied here.(if you can't afford it don't buy it)I never even carried a credit card until a year ago when i needed one for a new york holiday.I've worked my ass off every day since the age of 15 and save what i can.Next week i will be the proud owner of a new porsche 997 rs i'm sure there are plenty of people out there earning much more money than me who are in the same position to buy without taking out huge loans.In a way i hope the property market does take a bit of a hit so the first time buyers don't have to sign there lives away on a 50 year mortgage poor buggers.
martin
martin
Jason et al,
we are not talking ourselves into anything, this is happening and it is real. far too many people imho have their head buried in the sand thinking this will all go away,
take a look over on the telegraph, not a popular read for most but if you want a well informed less hsysterical view of the real world murkyness that is going on in the world finance markets you can do worse than educate yourself from these pages.
http://www.telegraph.co.uk/money/main.jhtml?xml=/m...
Sine the naughty people who wrapped that 200 billion in sub prime debt into AAA and AA SIV's nobody knows where its all gone, its popping up all over the show, banks have run into trouble in Germany, Canada, even china when they have found out how many billion they are exposed too. as a result the short term commercial loans that pay for the hedge funds and investment vehicles that hold mortgage debt are not getting renewed by nervous investors who want to know where the missing 100 billion is and have lost all trust in the credit ratings of these complex debt packages.
During the boom times hte banks wrote out stop positions to underwrite those funds and since non of hte investors are now willing to roll over the loans the banks are now having to come good on all those positions, that is why they have been hoarding cash all summer.
This is having a massive knock on into the general economy now, across the country as the telegraph are reporting because all the clearing banks are having to move all these billions onto their own asset sheets they have no money left to lend out, that means from property developers to business owners are not getting overdrafts, business loans or mortgages because the bank does not have the liquidity to lend anything out. ANd that is clearly going to impact lending into the supercar market.
There are people with AAA credit records getting knocked back for 2 grand overdrafts, who is going to underwrite supercar financc at 100K+???
if business owners cannot raise money for investment then they will be forced to sink their own cash into theri business and that will remove all their free money from buying supercars and other non essential items.
I was involved with a raft of mixed investment/debt based projects over the summer and every single one has been put on hold by the lenders, if the banks do not fund SME business cashflow then their will be job losses and business closures as they struggle to pay their rent and day to day expenses. SME's account for 60 percent of the UK economy yet banks have all their money tied up in exotic deby and funding positions on private equity deals and funds. with consumer debt at 1.7 trillion we are very, very exposed, the US subprime crisis was caused by a 25 percent downturn in US house prices, home reposessions are expected to hit 2 million in the US next yea hence the 200 billion loss due to falling asset values of repo'd homes, the reason why northern rock is so exposed is that a similar collapse in UK housing prices would leave their high LTV book looking very weak, other lenders such as B and B are also looking very shaky as they have one of the highest buy to let portfolios in the sector which is likely to bear the first brunt of defaults in a slowing economy with rising unemployment and falling asset values.
Unless the credit agencies like standard and poor can get to grips with the complexities of the investment vehicles the debt is packaged into and apply some meaningful credit ratings to them and restore confidence in the investment markets and a willingness to take back all that short term paper then banks liqudity could be severely stretched for the forseeable futue.
I can see why a lot of people in the city are keeping quiet about it, o, sue a lot of people in the equities end of the city arent entirely sure what sort of knots the debt traders have tied themselves up in, butif SME's continue to be starved of cash then it is inevetible that we will start to wind down the economy and hence i do feel if the banks don;t get to grips with the subprime market then recession is coming, and quite a few very well regarded US analysts are also pointing the finger at the UKs reliance on the city for growth and overexposure of consumer debt and support of the domestic property market to counterbalance debt as putting us in the firing line for a sharp economic slump.
I think its clear the buy now pay later economy just got its first red letter demand.
we are not talking ourselves into anything, this is happening and it is real. far too many people imho have their head buried in the sand thinking this will all go away,
take a look over on the telegraph, not a popular read for most but if you want a well informed less hsysterical view of the real world murkyness that is going on in the world finance markets you can do worse than educate yourself from these pages.
http://www.telegraph.co.uk/money/main.jhtml?xml=/m...
Sine the naughty people who wrapped that 200 billion in sub prime debt into AAA and AA SIV's nobody knows where its all gone, its popping up all over the show, banks have run into trouble in Germany, Canada, even china when they have found out how many billion they are exposed too. as a result the short term commercial loans that pay for the hedge funds and investment vehicles that hold mortgage debt are not getting renewed by nervous investors who want to know where the missing 100 billion is and have lost all trust in the credit ratings of these complex debt packages.
During the boom times hte banks wrote out stop positions to underwrite those funds and since non of hte investors are now willing to roll over the loans the banks are now having to come good on all those positions, that is why they have been hoarding cash all summer.
This is having a massive knock on into the general economy now, across the country as the telegraph are reporting because all the clearing banks are having to move all these billions onto their own asset sheets they have no money left to lend out, that means from property developers to business owners are not getting overdrafts, business loans or mortgages because the bank does not have the liquidity to lend anything out. ANd that is clearly going to impact lending into the supercar market.
There are people with AAA credit records getting knocked back for 2 grand overdrafts, who is going to underwrite supercar financc at 100K+???
if business owners cannot raise money for investment then they will be forced to sink their own cash into theri business and that will remove all their free money from buying supercars and other non essential items.
I was involved with a raft of mixed investment/debt based projects over the summer and every single one has been put on hold by the lenders, if the banks do not fund SME business cashflow then their will be job losses and business closures as they struggle to pay their rent and day to day expenses. SME's account for 60 percent of the UK economy yet banks have all their money tied up in exotic deby and funding positions on private equity deals and funds. with consumer debt at 1.7 trillion we are very, very exposed, the US subprime crisis was caused by a 25 percent downturn in US house prices, home reposessions are expected to hit 2 million in the US next yea hence the 200 billion loss due to falling asset values of repo'd homes, the reason why northern rock is so exposed is that a similar collapse in UK housing prices would leave their high LTV book looking very weak, other lenders such as B and B are also looking very shaky as they have one of the highest buy to let portfolios in the sector which is likely to bear the first brunt of defaults in a slowing economy with rising unemployment and falling asset values.
Unless the credit agencies like standard and poor can get to grips with the complexities of the investment vehicles the debt is packaged into and apply some meaningful credit ratings to them and restore confidence in the investment markets and a willingness to take back all that short term paper then banks liqudity could be severely stretched for the forseeable futue.
I can see why a lot of people in the city are keeping quiet about it, o, sue a lot of people in the equities end of the city arent entirely sure what sort of knots the debt traders have tied themselves up in, butif SME's continue to be starved of cash then it is inevetible that we will start to wind down the economy and hence i do feel if the banks don;t get to grips with the subprime market then recession is coming, and quite a few very well regarded US analysts are also pointing the finger at the UKs reliance on the city for growth and overexposure of consumer debt and support of the domestic property market to counterbalance debt as putting us in the firing line for a sharp economic slump.
I think its clear the buy now pay later economy just got its first red letter demand.
i've been reading a lot of economic reports coming out of the USA, something like 800 mortgage companies have no gone under due to the sub prime issue and countrywide the largest is laying off 12,000 jobs. There is a lot of talk stateside of this pushing the USA economy into recession. A US finance sector recruitment analyst rreckons up to 1 in 3 city investment banksers working in the CDO and debt markets stands to lose their jobs, and with banks facing huge sub prime losses they are likely not to make a profit this year which means remaining city workers face a year with little or no bonuses.
This I think will obviously have a knock on impact into the supercar prices which have been a little to inflated for most, so its good news for the enthusiasts and those who paid cash and plan to keep, bad news for those with balloons and potential negative equity issues on their lease purchases or on variable rate balanced payment plans.
Some good news however amidst the bleak debt reports!!!
Savers are now getting 7 percent and beyond, and the forecast is banks will continue to offer higher savings rates on long term bonds in order to attract as much liquid capital to shore up their positions. so for those of us with a few bob then low inflation and high savings rates means the prudent will benefit.
This I think will obviously have a knock on impact into the supercar prices which have been a little to inflated for most, so its good news for the enthusiasts and those who paid cash and plan to keep, bad news for those with balloons and potential negative equity issues on their lease purchases or on variable rate balanced payment plans.
Some good news however amidst the bleak debt reports!!!
Savers are now getting 7 percent and beyond, and the forecast is banks will continue to offer higher savings rates on long term bonds in order to attract as much liquid capital to shore up their positions. so for those of us with a few bob then low inflation and high savings rates means the prudent will benefit.
I still think it is the UK housing market that will play the biggest role in the economy more than any other variable. Yes, the city guys will make a million or two less this year but the REAL economy (seperate from the "financial economy" ) is in good shape and the current risk-repricing will eliminate only the "frothiest" and most ambitious private equity, M&A and general Investment Banking activity. Apart from the guys working in real estate loan securitisation, IMO the city is OK....
Also I do NOT believe that the banks are THAT strapped that they are pulling back from all types of commercial lending. This is nonsense - otherwise they are hardly a going concern. Liquidity is being denied to banks with significant exposure to mortgages or people expected to have large subprime exposure.
What IS more important is the direction of the housing market. People FEEL wealthier when their house has gone up £600K. THAT sentiment is the most important thing in the economy. It DRIVES aggregate demand even if this "wealth" is never realised by re-financing or sale. If equity disappears and property prices crash (as mortgage lenders lend more conservatively and expensively) then the whole country is in the 5hit.
This will play a much bigger role across the whole economy than city layoffs.
Back to cars: waiting lists are long enough for residuals to follow their normal trends and 1-2% extra on an annual basis on car loan for £200,000 is sod all for almost everyone buying a supercar even on 100% finance. Irrespective of the way a car is purchased, the depreciation is the same so those buying with cash/finance are in the same boat. City layoffs and reduced bonuses may cause Ferrari to sell a few less cars but if the housing market get's killed than they wont sell ANY cars. I very much agree that buying a supercar should be about handing over a debit card, but when your house is worth £500,000 less than you paid for it, IMO, you won't give a sh1t about buying a Ferrari even if you have money in the bank to pay for it 3 times over.
Also I do NOT believe that the banks are THAT strapped that they are pulling back from all types of commercial lending. This is nonsense - otherwise they are hardly a going concern. Liquidity is being denied to banks with significant exposure to mortgages or people expected to have large subprime exposure.
What IS more important is the direction of the housing market. People FEEL wealthier when their house has gone up £600K. THAT sentiment is the most important thing in the economy. It DRIVES aggregate demand even if this "wealth" is never realised by re-financing or sale. If equity disappears and property prices crash (as mortgage lenders lend more conservatively and expensively) then the whole country is in the 5hit.
This will play a much bigger role across the whole economy than city layoffs.
Back to cars: waiting lists are long enough for residuals to follow their normal trends and 1-2% extra on an annual basis on car loan for £200,000 is sod all for almost everyone buying a supercar even on 100% finance. Irrespective of the way a car is purchased, the depreciation is the same so those buying with cash/finance are in the same boat. City layoffs and reduced bonuses may cause Ferrari to sell a few less cars but if the housing market get's killed than they wont sell ANY cars. I very much agree that buying a supercar should be about handing over a debit card, but when your house is worth £500,000 less than you paid for it, IMO, you won't give a sh1t about buying a Ferrari even if you have money in the bank to pay for it 3 times over.
Edited by Murcielago_Boy on Wednesday 19th September 17:46
Edited by Murcielago_Boy on Wednesday 19th September 17:56
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