In committing to doing a blog several times a week, the biggest worry is how the hell am I going to find something to write about each time? Since I started the blog a few months before the credit crunch I needn’t have worried, events have been nothing short of sensational and yesterday’s announcement from the Lloyds Banking Group marks another historic landmark.
It is incredibly unfortunate that it has come to this, and great names such as C&G, Abbey, Alliance & Leicester, and Bradford & Bingley disappearing from our high streets is sad to see.
It already looks like a week of pressure for many, not just our beleaguered Prime Minister, who although he has survived the latest coupe is hanging by a thread after the Euro Elections. The issue is that when a Government is in this kind of position, not much of any use apart from fire fighting tends to get done.
The PM is not the only one struggling to survive in this post-credit crunch cauldron. There are many in business who are working all hours to keep things going and see out the recession. In the mortgage and banking industry the news today will no doubt focus on another banking giant following in the footsteps of Santander and rationalising its brands in order to compete in the new world.
Also posted in Mortgage Finance |
There has been a wave of euphoric headlines over the last few days including “Investors bet that worst of recession is over and predict new bull market” in The Times and other commentators suggesting house prices will now stabilise and even rise by the end of the year.
Whilst on the other side of these headlines we also get The Guardian suggesting that “Bank of England braced for third wave of financial crises”, with the new £50b cash injection being used to avert further disaster as banks struggle to increase lending and keep a lid on bad debts.
I heard the news today, (oh boy), that the Government are planning to sell off Northern Rock by the end of the year after splitting it up. One of these parts would stay with the Government and would be, in essence, a “bad bank”. I understand further that head-hunters were out looking to find someone to run this bad bank, which got me thinking.
Question. How do you run a “bad bank”? Oh, and also, who would be best to run a “bad bank”?
Presumably it can’t be a hard job running a bad bank. At the end of the year you go for your annual revue with Gordon / Darling:-
Up, down, round and round, there is so much contradictory data out there at the moment that buyers — and indeed sellers — don’t know where to turn.
Recent house price stats show anything from another monthly fall to a slight rise, although interestingly the year-on-year stats mainly seem to show between a 15% – 20% fall. What does seem to be clear, therefore, is that the various sources predicting a 40% or even 50% drop are wide of the mark.
Now I am sure I will get pilloried for that comment on places like House Price Crash.com, but I just cannot see another 20% drop on top of this.
Andrew Montlake, Director and Spokesperson for Coreco, gives his honest and forthright views on the mortgage market, economy and all things property related. Monty was voted "Mortgage Personality of the year 2008" and is the current holder of the British Mortgage Awards "Best Press Spokesperson" title. Expect expert analysis, delivered in a down to earth style with a side helping of exuberance.
