Financial, Real Estate, Stock Markets Trends and Current Affairs

I'm pissed off at myself. I broke one of my own cardinal rules and allowed my personal account to fall below my nominally appointed 110% annualized return benchmark. It is no one's fault but my own and will probably be rectified by month's end, but it does prompt me to proof against it happening again. So, I'm back to the lab. I will be sharing bits and pieces with the blog, so stay tuned. In a nutshell the US banking system is @#$#, those CEOs who say that the worst is behind us... Are you sure about that?

I think we may be revisiting the '30's, albeit with more foresight from the Fed, but more downward pressure from global macro perspective. It will be interesting who wins this tug of war, but in the end I fear moral hazard my reign supreme.

gdp20-40.jpg

Does this sound familiar?

Bloomberg - Richard Lee
spent 5.3 million pounds ($10 million) buying 20 rental homes across
the U.K. with just 150,000 pounds of his own money. Today, the
properties are worth about 60 percent less and owned by the banks that
financed the purchases.

Lee was one of thousands enticed by one of Europe's top five best-performing residential property markets
during the past decade. Now repossessions are mounting and properties
stand empty as many investors fail to find the tenants needed to cover
their mortgages after a building boom flooded cities, especially Leeds
and Manchester, with apartments.

The unraveling buy-to-rent investment market contributed to a 2.5 percent drop in home prices
last month, the biggest since 1992, a report by mortgage lender HBOS
Plc shows. Britain is among the countries most likely to follow the
U.S. into a housing slump, according to the International Monetary
Fund. Prices may drop 10 percent this year and next, said Michael Saunders, a London-based economist at Citigroup Inc.

``Buy-to-let
investment was a bubble inside the housing market bubble,'' Saunders
said. ``It's turning out worse than I thought.''

Home purchases
by investors such as Lee helped triple housing prices between 1997 and
2007. The buy-to-rent market in the U.K. increased 19-fold to about 190
billion pounds in the same period, according to London-based broker
Savills Plc.

Banks clamor for funds from the BOE - Bloomberg:

The
Bank of England said financial institutions bid for 50 billion pounds
($99 billion) in its weekly auction, the most in three months, as a
worsening shortage of credit increased the need for central bank funds.

The Bank of England offered 13.7 billion pounds in today's
weekly auction, it said in a statement in London today. That made the
operation more than three times oversubscribed. Bids were the most
since Jan. 10.

Higher credit costs threaten to exacerbate the
U.K.'s housing downturn and push the economy into a recession as
mortgage lenders including HBOS Plc and Barclays Plc's Woolwich unit
withdraw their best deals and raise interest rates. The Bank of England and the government are likely to announce a plan to shore up the credit market in the next two weeks.

``It shows the scale of the problem,'' said Nick Parsons,
head of market strategy at NABCapital in London. ``There is not enough
money being shifted around the system. You can understand why there is
political pressure being bought about to solve problems in the
markets.''

The gap
between borrowing pounds for three months and the Bank of England's
benchmark rate, currently at 5 percent, rose to 93 basis points on
April 14 and stayed close to that level yesterday. That's the most
since December.

Prime Minister Gordon Brown
said yesterday he's looking for ways to inject funds into the mortgage
market and is studying measures already taken in the U.S. British house
prices dropped the most since 1992 in March, HBOS, the country's
largest mortgage lender, said last week.

As UK government intervention exacerbates money market rate costs:

Bloomberg
- Money-market rates may rise after the British Bankers' Association
threatened to ban members that deliberately understate their borrowing
costs.

Participants have complained that banks may be submitting inaccurate information amid the global credit squeeze, Angela Knight,
chief executive officer of the London-based association, said
yesterday. The BBA will exclude banks that give misleading quotes and
plans to speed up a review of the daily ``fixing'' process by which
borrowing costs are determined, it said.

The threat ``will add to the upward drift we're already seeing'' in money-market rates, said Christoph Rieger, a fixed- income strategist in Frankfurt at Dresdner Kleinwort, the investment bank owned by the insurer Allianz SE.

Isn't it just silly to state that core inflation doesn't include the
things core to human survival? It is just as silly to hear pundits
cling to government mantras and numbers as if they were valid.

From Bloomberg :

China,
the world's largest grain producer, raised taxes on fertilizer exports
and the Philippines, the biggest rice importer, failed to fill a tender
as record prices heightened concern the world is running short of food.

China will increase export duties on all fertilizers and some
related raw materials to safeguard local supplies during the main
growing season, the Ministry of Finance said today. The Philippines
received offers for just two-thirds of the 500,000 metric tons of rice
that it sought to buy at a tender.

Rice futures in Chicago
surged to a record today, following gains in wheat, corn, palm oil and
soybeans, which have all risen to their highest ever this year. The
rally, including record crude prices, has stoked concerns inflation
will rise and civil unrest may spread. The food crisis was of
``emergency proportions,'' United Nations Secretary-General Ban Ki-Moon said on April 14.

``The prices are just too high,'' Vic Jarina,
the deputy director of the Philippines National Food Authority, said
today after the rice-supply offers were announced. ``We will review the
bids and decide whether we'll have more tenders.''

Rice, the
staple food for half the world, rose as much as 57 cents, or 2.5
percent, to a high of $23.12 per 100 pounds (45 kilograms) on the
Chicago Board of Trade. The contract, which has more than doubled in
the past year, was at $22.985 at 4:47 p.m. Singapore time.

Civil Unrest

The
World Bank has forecast that 33 nations from Mexico to Yemen may face
social unrest after food and energy costs increased for six straight
years. Haitian Prime Minister Jacques Edouard Alexis was voted out of office this month by the country's senate after violent protests over food costs.