Extremely Gloomy Forecast

March 12, 2009

A report by City Investment bank Numis Securities says:

‘Despite UK house prices already having fallen 21% from the peak, we do not believe that the correction is anywhere near over.

Our core headline forecast is that UK property prices remain between 17% and 39% overvalued based on fair valuation. Moreover, history has shown us that when property…which has experienced a price bubble corrects, the price tends to fall below fair value for a period of time, as confidence in that market remains low. Prices could fall a further 40-55% if the over-correction was as bad as the early 1990s in our view

The bankruptcy of the UK is a very real probability as the UK Government is trying to stimulate a greater debt burden in a grossly indebted economy. We believe the scale of the macro imbalances in the UK means there is no prospect of a recovery in 2009 and we expect the UK to be mired in a deep recession through all of 2010.’

FTSE Down to New Low

March 2, 2009

FTSE this morning hit  a new low of 3694.16 which is its lowest level since April 2003. This has been partly triggered by HSBC’s decision to raise £12.5bn from shareholders through a rights issue at a price almost 50% lower than its closing share price last week of 491.25p.

The FTSE 100 index peaked at 6,930.2 at the beginning of 2000 and even as recently as November 2007 was at 6721 points but with the rapid deterioration of the economy it’s value has tumbled. It is yet another sign of the mess the economy is and a damning indictment of Gordon Brown’s handling of the UK economy in the last 12 years.

Ed Balls – Gaffe or Honesty?

February 10, 2009

‘The economy is going to define our politics in Britain in the next year, the next five years, the next 10 and even the next 15 years. These are seismic events that are going to change the political landscape.

I think that this is a financial crisis more extreme and more serious than that of the 1930s and we all remember how the politics of that era were shaped by the economy.

We now are seeing the realities of globalisation, though at a speed, pace and ferocity which none of us have seen before. The reality is that this is becoming the most serious global recession for, I’m sure, over 100 years as it will turn out.’

Put Labour in power for 12 years and you end up with the worst recession in 100 years!

Sarkozy’s Attack on Brown

February 6, 2009

First the Germans and now the French. There seems to be a queue of politician’s abroad wanting to attack Gordon Brown’s economic policies. No doubt we’ll see Downing Street twist this story to try and explain that this wasn’t aimed at Brown and he is still regarded everywhere as the saviour of the world economy!

Even Lower Interest rates

February 5, 2009

Interest rates have been reduced to 1% by the Bank of England to try and kick start the economic recovery, or at the very least to slow the negative growth that the UK economy is experiencing. Previous cuts haven’t had the desired effect and it doesn’t look like this reduction will be any different.

This is further bad news for savers especially those who are elderly and rely heavily on their savings to survive and also counter productive for Banks who are seeking more deposits.

Labour’s Sums Don’t Add Up

February 2, 2009

The Effect of Brown’s Economic Stimulus

January 29, 2009

Fraser Nelson at the Spectator has produced this excellent analysis of the effects of all the economic measures announced by Gordon Brown in recent months. It’s essential reading and another indicator to show the ineffectiveness of Brown’s economic stimulus and proves that Brown has no idea what he is doing except announcing measures for the the sake of a few days publicity and in the hope of an increase in the polls.

Hat tip: Coffee House