Nadeem Walayat
Editor of MarketOracle.co.uk, is our resident financial analyst, with over 20 years experience in trading and investing in the financial markets using both Technical and Fundamental Analysis. Having started his trading career in 1986, and one of relatively few that beat the 1987 Stock Market Crash . Also, having first become a member of the Society of Technical Analysts in 1991. Nadeems key principle is "To Keep It Simple! and not to lose sight of the Big Picture". Apart from trading, Nadeem is both an accountant and programmer by profession.
For more on the Credit Crisis please subsribe to our Free Weekly News Letter
For more on the Credit Crisis please subsribe to our Free Weekly News Letter
Articles by Nadeem Walayat
January 06, 2009
UK house prices having fallen by 19% are about half way to the lows, and therefore suggest that house prices will decline by 38% from the August 2007 peak. The housing market trend is clearly currently in the panic stage as we are witnessing near unprecedented house price falls at the rate of more than 16% per annum, far beyond that of the 1990's bear market.
December 31, 2008
This article seeks to generate an accurate UK inflation forecast for for 2009 that takes into account the ongoing deflationary bust and the possible implication of inflation taking off during the second half of 2009 following the highly inflationary government borrowing binge as well as investment implications for 2009 and beyond.
November 24, 2008
Alistair Darling's emergency tax cutting budget revealed the true extent of anticipated government borrowing that looks set to take official public sector next debt smashing through £1 trillion, this despite the fact that the official data ignores the £500 billion bailout of the banks. The government also announced fantasy growth forecasts that stated that UK GDP growth would return to trend growth of 2.5% per annum by 2011, this leaves more probable forecast growth rates of 0.6% for 2010 far behind and opens up a potential black hole in Britain's finances that implies that actual official government borrowing will be some 50% higher than today's electioneering budget's forecasts.
July 06, 2008
The NHS celebrates its 60th birthday. The government has been marking the landmark event through a string of announcements of initiatives aimed at bringing the ageing and bureaucratic institution into the 21st century.
June 29, 2008
US House prices continued to plunge for April 08 data, reaching an extreme low reading of down 16.3% on a year earlier as measured by the S&P/ Case-Shiller Composite-10 and down more than 19% from the mid 2006 peak. The rate of decline is the worst since the Great Depression and signals further ...
June 17, 2008
The western economies led by the United States are teetering on the brink of recession, which is expected to be followed by a prolonged period of slow growth if not something worse namely stagflation.
Meanwhile the emerging economies continue to consolidate their strong growth rates, buoyed by huge trade surpluses from strong exports of consumer goods and raw commodities enabling governments to embark on huge infrastructure building projects. These economies are increasingly feeding their domestic construction and consumption booms as the developing world continues to make the mega shift to the developed world.
May 04, 2008
This weeks newsletter looks at the stock market's trend during the summer months and especially in light of the "Sell in May and Go Away" adage. Meaning to sell stocks during May with a view to buying them back again some time during September.
April 29, 2008
The food riots across the world illustrate the degree to which the world is seeing a shift from cheap food to the early stages of a mega trend in the agricultural sectors that is set to continue for many years. This impact is not just limited to the developing world but people in the developed world have seen their food costs soar by as much as 50% over the last 12months.
April 29, 2008
Despite frantic efforts by the US Government and central bank to avoid a recession during a Presidential election year, the US is heading for a protracted recessionary period that is expected to be worse than the last two recessions as the credit crisis and housing bust continue
March 17, 2008
The ongoing deleveraging of the $500 trillion credit markets claimed its biggest scalp on Sunday - Bear Stearns, formerly one of the worlds top 5 investment banks and now taken over by JP Morgan to prevent a global financial panic, with the aid of funding and guarantees from the US Fed amounting to $30 billion which was reminiscent of the UK Governments bailout of Northern Rock Bank.
March 09, 2008
Seasonally adjusted house prices fell in February by 0.3% to £196,649 (Halifax:SA), a fall of £600. None seasonally adjusted house prices are now down £7,600 since the peak made in August 2007 which equates to an average drop of £1,266 per month in equity. This is against an interest rate implied cut of 0.5% on interest repayments on an average UK mortgage of £150,000, or just £62.50 per month (Rate cuts inline with Sept 07 forecast). Therefore housing market commentators expecting UK interest rate cuts to support the housing market need to revisit their methodology of calculating the difference between implied impact of rate cuts i.e. £62.50 per month against that of the loss of equity per month of £1,266. I say implied impact of rate cuts as the credit crisis has ensured that the spread between bank mortgage rates and the Bank of England Base Rate has widened, therefore effectively not entirely passing on the rate cut to mortgage customers.
March 09, 2008
The credit crunch that broke with the two hedge funds failing in July 2007 is now into its ninth month with announces losses / bad debt write downs of £163 billions. Way back in July the expectations were that sub prime related losses would be in the region of some $140billions. With some venturing as far as possibly suggesting losses of $200, with some mavericks venturing to as high as $400 billion which was larger than that of the Savings and Loans crisis of $160 billions that required a US Tax Payer bailout of $124billions. The article of July 07 (Hedge Fund Sub prime Credit Crunch to Impact Interest Rates ) pointed out that the consequences of the credit crunch would be the worlds central banks ratcheting up money supply growth and making deep cuts in interest rates despite the inflationary consequences as the Central banks attempted to counter the credit crunch liquidity squeeze.
February 08, 2008
UK House prices fell by £4,000 (2.1%) in January 2008 (Halifax), the average price falling to £191,275, down £9,806 (4.8%) from the August 2007 peak of £201,081. The Market Oracle forecast as of August 2007 is for a fall in average house prices of 15% over two years to August 2009. UK interest rates were cut yesterday by a further 0.25% taking interest rates down by 0.5% from its peak of 5.75% (Forecast December 2006), the cuts to date and further anticipated cuts during 2008 are being mistakenly taken by many market commentators, economists and large mortgage banks such as the Halifax to imply that UK House price inflation will be neutral during 2008. Therefore this article illustrates why house price inflation will start going negative by April 2008.
January 29, 2008
UK house prices slumped in the quarter to December 07, with London leading the way as momentum gathers towards the 2 year forecast for an average decline of 15% by August 2009. The mortgage banking sector has only just beginning to feel the impact of the housing slump as the number of foreclosures (repossessions) is expected to surge to a record busting 80,000 for 2008 from 40,000 last year. Northern Rock was the first to go bust, other banks will follow. But in the meantime watch out for other mortgage lenders, especially those exposed to the buy to let sector such as Paragon to be pushed towards bankruptcy, down 90% from its highs.
January 25, 2008
The Mega Picture - Sovereign Wealth Funds (SWF's) are being hailed as the saviours of the financial world, but in reality are more akin to harbingers of the economic apocalypse for countries such as the United States and United Kingdom.
January 25, 2008
The US Fed's emergency 0.75% interest rate cut to 3.5% following the global stock market plunge on fears of a looming US recession now increases the probability of a near certain cut in UK interest rates at the February MPC Meeting, rather than at the originally forecast March MPC meeting.
January 25, 2008
Citigroup the United States second largest bank posted a record quarterly loss of $10 billion due to the continuing fall out from the subprime mortgage crisis that continues to depress US housing market as Adjustable Rate mortgages adjust to higher interest rates.
Articles by Nadeem Walayat From Other Sources
September 25, 2007
published in The Market Oracle
September 18, 2007
published in The Market Oracle
September 17, 2007
published in The Market Oracle
September 05, 2007
published in The Market Oracle
August 22, 2007
published in The Market Oracle
July 31, 2007
published in The Market Oracle
July 04, 2007
published in The Market Oracle
June 25, 2007
published in The Market Oracle
April 22, 2007
published in The Market Oracle
March 26, 2007
published in The Market Oracle
March 25, 2007
published in The Market Oracle
February 27, 2007
published in The Market Oracle
January 02, 2007
published in The Market Oracle
December 26, 2006
published in The Market Oracle