Interest Rates and the Property Market
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Interest Rates and the Property Market

Interest Rates and the Property Market

Trading Features from Denham of Capital Spreads.

A nice big bull day yesterday and my comments concerning a secondary rally from my initial call of up 120 came to fruition as the bears were squeezed in the sunshine of a strong bull move and we closed up almost 200 points at 5689.

It was also nice to see that Citigroup and Barclays Capital are also bringing into question the BOE’s handling of its role over the past months. The squeeze on liquidity is getting worse, not better, and yesterdays 3 month Libor fixing was at 6% showing that even the small rate cut that we have seen from the central bank has had little or no effect.

People complain loudly that their variable mortgage rates are actually going up not down accusing the ‘Banks’ of everything under the sun but the plain fact is that if the mortgage lender cannot borrow at less than 6% (and often much more than this) they are hardly likely to lend it to you for less. Some of the smaller building societies cannot get funds at anything less than Libor plus 150bps (nearly 7.5%). In my opinion it is this issue that will cause the greater long term harm than a short lived blip in inflation.


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Economies thrive through confidence and one of the pillars of confidence in the UK is the value of property. If the whole market grinds to a halt through lack of liquidity then there would be only one direction for it to go. Down. In a market bereft of buyers prices must fall and with fewer people able to ‘gear up’ to pay the current prices then I fear this will be the scenario towards which we are heading. A major problem is that once a trend gets set it is very difficult to halt its momentum (witness the property situation in the US). Buyers shrink from putting themselves in hock when they fear that next week / month / year the house they have, so painfully paid for, will have dropped in value. And so stagnation follows. If the housing market locks up then many retailers who thrive on sales to ‘new owners’ will also fail and so on down a long line that ends with recession. At the moment, growth is just enough to keep the tills turning over but without some aid from our central bank I fear that this will not be the case for long.

This is not a plea to help our ‘poor old’ banks out of the hole they have dug for themselves. It is a plea for everyone whose job is at risk through the seizing up of the money markets. The Bank of England should be adding far greater sums into the markets and should also be willing to take a much wider basket of assets as collateral. The BOE seem to be under the impression that if they sit doing nothing for long enough then the problem will sort itself out. Well, six months down the line does this look to be happening?

This statement is not made from a personal sense of pain or gain. I’m lucky enough to have no mortgage and money in the bank and am quite happy to be lending it at an Interest Rates of almost 6%.


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'Interest Rates and the Property Market' by SD, updated 26-Mar-08

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updated 27-Sep-10
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updated 24-Sep-10
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Indices Spreads Remain Subdued on Low Volumes
updated 06-Aug-10
Recently I was in discussion with a top analyst from one of the major investment banks and the general thrust of the conversation was how...read article: Indices Spreads Remain Subdued on Low Volumes

How to Trade the FX Markets
updated 30-Jul-10
The FX markets are often an interesting if not a confusing place to trade. The Japanese Yen is still seen as the strong man of the major currencies yet that is ...read article: How to Trade the FX Markets

Spread Betting Markets Under Pressure
updated 30-Jul-10
The old saying of 'Sell in May and go away' has rarely seemed quite so appropriate as in the current climate. The markets are certainly spooked...read article: Spread Betting Markets Under Pressure

Spread Betting and Money Supply Data
updated 26-Jul-10
So we have seen the M4 money supply numbers come out from the UK Treasury and the numbers are broadly steady but limited. This state of affairs is not good enough for...read article: Spread Betting and Money Supply Data

Reducing Your Risk When Spread Betting
updated 13-Jul-10
We have seen the same pattern repeating itself for some time now. This sort of price action though has its positives especially for day traders. Nevertheless when trading the stock market there are some risks...read article: Reducing Your Risk When Spread Betting

Spread Betting on the BP Share Price
updated 01-Jul-10
The problems for BP are mounting and this has really been holding back the FTSE 100. As the FTSE 100's largest company, a drop of...read article: Spread Betting on the BP Share Price

Banking Oversight to be Handed to BoE in FSA Break Up
updated 17-Jun-10
As the Captain decides to rearrange the deck chairs on the Titanic, the BoE has been tasked with taking over much of the FSA's remit. Overall we are left wondering...read article: Banking Oversight to be Handed to BoE in FSA Break Up

Spread Betting on the Falling Euro/Dollar Market
updated 23-May-10
Until recently, all of the Euro-is-in-trouble stories were in the future tense. The problem now is that the articles have, to a greater or less degree, changed to the present tense. The Euro has been drifting against...read article: Spread Betting on the Falling Euro/Dollar Market

Spread Trading the Dow Jones
updated 19-May-10
Over the last couple of years we have seen increased market volatility as the credit crunch and hesitant recovery have changed the face of the financial landscape. Nowhere has this been more obvious than the Dow Jones. Many investors have ...read article: Spread Trading the Dow Jones

Spread Betting and the Gold Markets
updated 19-May-10
Gold has broken through to yet another record high. The previous high of $1226 per troy ounce was set in November 2009. Since then the gold market has dropped as low as...read article: Spread Betting and the Gold Markets

Tips for Trading Stock Market Indices
updated 10-May-10
Many traders and investors have trading rules and tips to help guide their investments. To me too many tips are on a particular trade and do not focus on strategies. At the same time too few tips...read article: Tips for Trading Stock Market Indices

Sterling Spreads Continue to Struggle
updated 02-Mar-10
When the forex markets don't like you they really don't like you. Sterling continues to weaken as the prospect of either a renewed Labour administration or a weakened...read article: Sterling Spreads Continue to Struggle

Greek Bailout and Forex Tax News
updated 10-Feb-10
Yesterday our early morning comment emphasised that the Northern European States would eventually fall into line and prop up the PIGS. The thinking was that the...read article: Greek Bailout and Forex Tax News

Spread Trading the Oil Markets
updated 06-Feb-10
So far in 2010 the crude oil market has been rather unspectacular. The only people who seem to be making money, apart from the gents who own the wells, are those who have been ...read article: Spread Trading the Oil Markets

Gold Futures and China
updated 26-Jan-10
The gold futures market has been fascinating to watch over the last few years - although it has not always been the easiest market to call. With the Chinese economy doing so well there must be increasing amounts of pressure to float the Yuan. This pressure is underpinning the price of gold. A stronger Yuan translates...read article: Gold Futures and China

Financial Spread Trading UK
updated 14-Jan-10
Financial Spread Trading does have its risks but there are a good number of benefits. Financial spread trading is Tax Free*, it is also...read article: Financial Spread Trading UK

Spread Betting Markets for 2010
updated 13-Jan-10
What can we expect this year? Stock markets are quite well valued at the moment but equities continue to give better returns than...read article: Spread Betting Markets for 2010

Inflation and Weak Pound Pressure Retailers
updated 26-Oct-09
I am less than convinced about the inflation data that we are now getting. I am now seeing across the board increases in food, fuel and...read article: Inflation and Weak Pound Pressure Retailers

Jobs and Banking
updated 03-Jul-09
The Bank of England expects that house prices have seen the worst and that there are enough independent signals to indicate that the economy is in a position to grow in...read article: Jobs and Banking

Rising UK Unemployment
updated 29-Jun-09
Unemployment levels are becoming an *Elephant in the room* subject as economists forever talk of Job losses as being yesterday's...read article: Rising UK Unemployment

UK Taxes and Stronger Banks
updated 24-Jun-09
There is a small sense of medium sized to large corporations finally starting to baulk at various new business tax burdens being continually levied in the UK. In separate stories...read article: UK Taxes and Stronger Banks

Goldmans Sets Crude Oil Target at $75
updated 05-Jun-09
Energy shares rose after Goldman Sachs lifted its price target on light sweet crude oil from $52 to $75 a barrel...read article: Goldmans Sets Crude Oil Target at $75

Political Quotes
updated 19-May-10
To celebrate the comedy of politics we have put together some of our favourite politics quotes, including audio and video clips....read article: Political Quotes

The Budget and The Markets
updated 22-Apr-09
The betting is on a spread of ?175-?200bn of borrowing requirements this year. That means that, just for 2009, the state will be overspending by...read article: The Budget and The Markets

Is it Time to be More Positive?
updated 14-Apr-09
For most of the Major indices we are now in the constricted trading area which defined the mid Jan to mid Feb volume trading range. Reading the analysts comments we can see a sharp divide in opinion arising. Half appear to think that...read article: Is it Time to be More Positive?

Trading Financial Fixed Odds
updated 13-Apr-09
In case you haven't noticed we have now added a new Financial Fixed-Odds section. So if you are looking to trade the ranges you now know you need a 'Barrier Range Trade' or...read article: Trading Financial Fixed Odds

The Problem of Throwing More Money at The Recession
updated 03-Apr-09
It is nice to see that the politician's favourite method of *problem solution* is being used once again. The huge sums being proposed to prop up...read article: The Problem of Throwing More Money at The Recession

Gordon Brown Resigns
updated 01-Apr-09
Gordon Brown has unexpectedly stepped down as Prime Minister. In an emotional farewell he praised...read article: Gordon Brown Resigns

Risks of Over Regulation
updated 18-Mar-09
So the regulators are about to release their pearls of wisdom to a breathless audience and already the sound of incredulity is being heard across the city. Huge limitations, restrictions...read article: Risks of Over Regulation

More Regulation, Overdue Recession and the Blame Game
updated 17-Mar-09
Whilst I would not seek to defend this government there is a certain amount of truth in the fact that much of the huge banking losses...read article: More Regulation, Overdue Recession and the Blame Game

Scaling In and Out of Positions
updated 15-Mar-09
I don't like change and that's getting worse. However, I know that to survive one has to adapt. It's time to start accumulating positions in good companies. Lately I've been scaling in and out of spread betting positions, and that is the plan for...read article: Scaling In and Out of Positions

New Short Selling Argument
updated 10-Mar-09
Nice to see the argument over short selling is rearing its head again. The FD of Aviva describing it as...read article: New Short Selling Argument

UK Government Robs Peter to Pay Paul
updated 23-Feb-09
Banning 100% mortgages sounds great when making populist laws but in reality not many banks are offering them now anyway. The 100% (and more) mortgage always sounded odd but there were clear reasons for...read article: UK Government Robs Peter to Pay Paul

Gordon Brown, Failures and Selling Gold
updated 17-Feb-09
It seems to me that there is very little actually going on out there on the political front. Nobody seems to be coming up with any wonderful new ideas about getting us out of the current mess. No rewards for failure...at what price did Gordon sell gold?...read article: Gordon Brown, Failures and Selling Gold

Lloyds, HBOS and Deflation
updated 16-Feb-09
It is not clear whether the losses in HBOS are actually 'toxic' debt or whether they are real loans to real businesses in the UK that have gone belly up. HBOS was a big lender to...read article: Lloyds, HBOS and Deflation

US Stimulus and Weak Foreign Markets
updated 11-Feb-09
So the senate has passed the stimulus bill and we must now await with bated breath for its effects to take place. Of course, with the economy in the US bleeding jobs at an ever increasing rate any form of fire wall must be considered. However spending over...read article: US Stimulus and Weak Foreign Markets

Banking, Bonds and Interest Rates
updated 09-Feb-09
The huge issuance required by the various state agencies across the globe may now be matched by the refinancing demands of the private sector. Debt to Equity levels may become ever...read article: Banking, Bonds and Interest Rates

Interest Rates and Green Shoots
updated 06-Feb-09
Whilst the Bank did what the market expected there is now a large contingent who believe that more cuts and any move lower towards 0% interest rates will be a huge over reaction by...read article: Interest Rates and Green Shoots

How Low Should Interest Rates Go?
updated 05-Feb-09
Japan has had ultra low rates for almost 20 years and much good it has done them. Their State debt levels are now so high that they could never...read article: How Low Should Interest Rates Go?

Will we see a FTSE 100 Breakout?
updated 23-Jan-09
The FTSE and Dow are swinging wildly during each session. This type of trading activity is generally an indication that we are about to break out from the current range but...read article: Will we see a FTSE 100 Breakout?

The End of the Short Selling Ban
updated 18-Jan-09
It could be a big day in the markets today, the FSA have lifted their short selling ban on Financial...read article: The End of the Short Selling Ban

Pressure on the European Banking Sector
updated 11-Jan-09
The German government finally succumbed to the pressure of the credit crunch and banking crisis yesterday by plunging €10bn into Commerzbank. The bank is a major...read article: Pressure on the European Banking Sector

Should We Have More Interest Rate Cuts?
updated 08-Jan-09
The FTSE's 6 day winning streak has come to an abrupt end after yesterday's 2.8% decline and the market dipping another 1% so far this morning. There is clearly nervousness surrounding the interest rate decision from the BoE...read article: Should We Have More Interest Rate Cuts?

Sterling, Europe and Redemptions
updated 02-Jan-09
While we can see no real reasons for buying Sterling it has to be admitted that the precipitous fall of the last month might be rather an over reaction to...read article: Sterling, Europe and Redemptions

Weak Banks and a Poorer UK
updated 31-Dec-08
Unfortunately the major problems remain though. Banks continue to struggle to improve their capitalisation. If land and property values continue to fall, if marginal companies continue to...read article: Weak Banks and a Poorer UK

To Trade or Not To Trade
updated 15-Dec-08
Markets are open on the up this morning with heavy buying towards the end of the US session on Friday and the Far East joining in on the action this morning. The solidity of the markets in the face of poor economic data is giving weight to...read article: To Trade or Not To Trade

Housing Market v FTSE 100 Performance
updated 12-Dec-08
Today is the last serious trading day of the year as the next two weeks tend to be very, very short on liquidity and occasionally long on volatility. In the UK there is now another variable to be taken into consideration and this is...read article: Housing Market v FTSE 100 Performance

A Courageous Decision on Market Turmoil
updated 02-Dec-08
Just when you thought it was safe to go back into the water the Dow drops 680 points in a session. The more you watch the various twists and turns of...read article: A Courageous Decision on Market Turmoil

The Banks and Lending to Business
updated 01-Dec-08
With another 12 months of a, probably, contracting economy, I would look with a pretty jaundiced eye at a small business that required money to survive right at the beginning of the down turn. I might ask 'when times...read article: The Banks and Lending to Business

The Pre-Budget Report and the FTSE 100
updated 25-Nov-08
The FTSE is called virtually unchanged as traders try to get a handle on Chancellor Darling's stimulus package but the reality is that our markets are...read article: The Pre-Budget Report and the FTSE 100

VAT Budget Cuts and the UK Economy
updated 24-Nov-08
The madness of an ever greater public sector funded, in an ever increasing proportion, by a booming service sector at the expense of a weakening manufacturing division had been pointed out ad-nauseam by various commentators over the past ten years. The huge tax revenues created by...read article: VAT Budget Cuts and the UK Economy

High UK Interest Rate Problems
updated 14-Nov-08
The Sterling / Euro spread is now at €1.1649 - €1.1653. That means that against our major trading partner, whose currency has also dropped alarmingly, we are over 20%...read article: High UK Interest Rate Problems

Market Liquidity, Sainsbury and British Land
updated 12-Nov-08
For all of my bearishness over the past year or so the fact that bad news is now not being acted on would seem to indicate that, for the moment, a base has been reached. Markets have a habit of building up for...read article: Market Liquidity, Sainsbury and British Land

The November Interest Rate Cut
updated 07-Nov-08
So now we look to see what the effect of 3% (and maybe more to come) will have on the general economy. Initially the immediate winners will be those in debt (of whatever form) and whilst the banks may not be able to pass the full 1.5% on immediately the long term prognosis...read article: The November Interest Rate Cut

Where to Spread Bet During the Credit Crunch
updated 06-Nov-08
For the investors across the world there are further important considerations: Am I trading on a stable platform? Are my funds safe? What happens if I trade on...read article: Where to Spread Bet During the Credit Crunch

The Financial Markets and Barack Obama
updated 05-Nov-08
So, the US election is finally out of the way and Barak has confounded the sceptics. He passed the finishing line first and starts his new job in Jan. Congratulations Barack. Unfortunately for the new leader...read article: The Financial Markets and Barack Obama

Volatile Markets and Vanilla Trading Products
updated 23-Oct-08
After such a huge sell off yesterday we can expect the opening levels to be attracting buyers hunting for the 'bottom'. Yesterday's late evening action saw the FTSE being quoted down at...read article: Volatile Markets and Vanilla Trading Products

The Markets, RBS and Tax Bills
updated 21-Oct-08
RBS seem to have bounced from the lows of last week when the share price seemed to indicate that it was touch or go whether the company would survive. With the stock closing last night at 85p and the Government underwriting the right issue at 65p this might...read article: The Markets, RBS and Tax Bills

Have the Markets Been Rescued?
updated 15-Oct-08
The markets seem to believe the hype so I suppose that is the main thing. The entire problem, sorry, the majority of the problem, has been the lack of confidence in the interbank lending markets. There have been huge...read article: Have the Markets Been Rescued?

The Gold and US Dollar Trading Relationship
updated 10-Oct-08
What will happen to the US Dollar, Gold and other Precious Metals as countries around the world enter recessions? What are the rules that investors should know?...read article: The Gold and US Dollar Trading Relationship

Spread Bets and Banking Valuations
updated 07-Oct-08
With a ban on shorting most financial stocks are there any buying opportunities? Should investors be buying banking shares and spread betting on banking stocks to increase in value?...read article: Spread Bets and Banking Valuations

Spread Betting on Banking
updated 07-Oct-08
Should we be buying banking shares? Share prices react to news and information, but price alone is not always an accurate reflection of a company's value in the short-term, as information gaps, market sentiment and rumours can cause price to deviate from a company's intrinsic value...read article: Spread Betting on Banking

Falling Markets and Euro Problems
updated 07-Oct-08
In spite of my repeated advice to clients to sit on their hands a steady stream of buyers was seen throughout yesterday's sessions as punters tried to "bottom pick". The steady destruction throughout...read article: Falling Markets and Euro Problems

Freaky Friday, Payroll and Lloyds HBOS
updated 03-Oct-08
The wild swings in markets over the past few weeks have not been conducive to sensible decision taking and the advise continues to be 'sit on your hands and do nothing'. It is all very well for the Sage of Omaha to be entering the market but not many people can have his time horizon. Nearly all hedge funds get...read article: Freaky Friday, Payroll and Lloyds HBOS

Strange FTSE Move and Bank Deposits
updated 02-Oct-08
Off to the races again and the going does not look like easing one jot for the time being. The late rally in the FTSE futures after the close of the cash markets seems to have been one of those strange...read article: Strange FTSE Move and Bank Deposits

Short Selling Ban and Spread Betting
updated 16-Jan-09
So how are the various short selling bans affecting spread betting? What can you do / what can't you do?...read article: Short Selling Ban and Spread Betting

Where to Invest
updated 25-Sep-08
Yesterday I was asked what people should be investing in at the moment. This is a difficult question as investors are supposed to take reasoned decisions over events, as they see them, combined with the future prospects for the actions that they take. I had to say in all honesty that how can anyone possibly make a...read article: Where to Invest

US Markets and the Poulson Bad Bank Strategy
updated 24-Sep-08
We still await the US Congress's ratification of the framework of Mr Poulson's Bad Bank strategy but law-makers are understandably a...read article: US Markets and the Poulson Bad Bank Strategy

The Run on Banks and the Credit Crunch
updated 18-Sep-08
Everyone slams Northern Rock for its reliance on the money markets for its business model. Well we can now see that HBOS, BB, Alliance and Leicester, Lehman, Merrill, Bear Stearns etc etc had (effectively) the same model. And let us not stop there...read article: The Run on Banks and the Credit Crunch

Gold Prices and the US Dollar
updated 18-Sep-08
It is plausible to assume that a weakening in the Dollar, coupled with an increase in global income, especially from emerging market economies, may have contributed to a boost in demand for...read article: Gold Prices and the US Dollar

Spread Bet on UK Banks
updated 16-Sep-08
Of the FTSE 100 banks it is HSBC, RBS, HBOS and Barclays were the worst casualties in terms of writedowns and credit losses. Although the sector has incurred a large amount of writedowns, there remains a view that further losses are in the pipeline: analysts recently stated that...read article: Spread Bet on UK Banks

Precious Metals Spread Trading Trends
updated 12-Sep-08
Gold may be at its lowest point for 2008 and other metals may be on the way down too but what were the five key influences on their meteoric price rise? Over the past five years the price of...read article: Precious Metals Spread Trading Trends

World Economies, Tax and Inflation
updated 13-Aug-08
As the FTSE struggles to maintain the rallies of the last week traders try to add in the effects of 4.4% inflation. On the face of it Sterlings decline and the prospect of high interest rates for longer will drag on returns and clients are...read article: World Economies, Tax and Inflation

Government Guarantees and Mortgages
updated 31-Jul-08
The headlines in the newspapers today will almost certainly focus on the 1.7% monthly drop in house prices which will be adding further pain onto an already hurting building sector. The net fall on the year is now over 8% and if you add in...read article: Government Guarantees and Mortgages

Market Reaction can be a Fickle Mistress
updated 22-Jul-08
With virtually every piece of nasty medicine now consigned to the back of the dispensary the country can look forward to two or three years of drift as the incumbent administration looks to mitigate its current disastrous low in the polls. Out of the window has gone the...read article: Market Reaction can be a Fickle Mistress

Trading the Banking Sector
updated 17-Jul-08
An exceptionally strange day with European markets pluming the depths in the morning only for the US to come in and completely alter the sentiment. Markets are expected to open substantially to the good this morning with financials especially favoured (for once). RBS hit 144p during the morning session with the board presumably thankful to have the rights issue out of the way already. No such luck for the underwriter of...read article: Trading the Banking Sector

Banking Sector Problems Continue
updated 15-Jul-08
The belief that the good times would go on forever has now cost us two banks with a third clinging on for grim life. Santanders audacious bid for Alliance and Leicester looks to be going through on the nod to the relief of all concerned (shareholders, Treasury, BOE and FSA) and little will be made of the fact that they are paying a valuation that was...read article: Banking Sector Problems Continue

Taylor Wimpey, M&S and US Data
updated 03-Jul-08
And the pain continues. M&S and Taylor Wimpey produced a real shocker yesterday morning but initially, somehow, the FTSE actually managed to shrug off the disastrous news and at one point was trading 80 points up on Tuesdays close. It was not until the US joined the fray that a bit of sense seemed to drift into proceedings and down we came once more to close 53 lower. This morning the opening level is forecast to be another 30 points lower at around 5390 having been as low as 5365 in late Futures ...read article: Taylor Wimpey, M&S and US Data

Employment and Major Construction
updated 02-Jul-08
A grim day on the exchanges yesterday as virtually everyone decided at the same moment that discretion was the better part of valour. At one point in after hours dealing the FTSE was being called 200 point...read article: Employment and Major Construction

Spread Betting on Banking Sector
updated 01-Jul-08
Banks took yet another battering yesterday even though the FTSE rallied some 96 points and the steady selling seems to now be almost masochistic (yields on Barclays are almost 12%) and the feeling spreads that...read article: Spread Betting on Banking Sector

Investing in Construction Companies
updated 26-Jun-08
Looking at the disaster which has been the UK centric portion of the FTSE 350 it is tempting to wonder if the whole thing has been rather overdone. Yes we know that people are feeling the pinch, that retail sales are down, that banks were sucked into the huge mortgage fraud over in the States, that petrol is now almost as expensive as...read article: Investing in Construction Companies

Weakened Banks and House Price Forecasts
updated 25-Jun-08
The 'vulture funds' appear to be sniffing around the smaller banks and weakened Boards are struggling to justify not talking to them. Bradford and Bingley's curious attitude to their shareholders over the past month coupled with their outright rejection of a deal that seems, on the face of it, to be rather better than...read article: Weakened Banks and House Price Forecasts

Reality Retail Sales Figures
updated 20-Jun-08
Retailers, like farmers, are always pessimistic and will describe any situation as a 'tough trading environment' but the idea that spending was up a rather ludicrous 8% had many coughing into their tea. I did wonder if...read article: Reality Retail Sales Figures

Credit Cards, Personal Debt and Missing Targets
updated 19-Jun-08
Not a very hopeful day yesterday with the FTSE taking its cue from an RBS analyst's doom laden prognosis followed by Sainsbury missing targets, Tate and Lyle worrying about commodity prices and Woolworth ousting their CEO. Last night Mervyn King gave the startling news tha...read article: Credit Cards, Personal Debt and Missing Targets

The Great Short Selling Debate
updated 17-Jun-08
For all of the fireworks over the last two or three months who have been the ones proved to be a) correct and b) truthful? Firstly, most of the Banks denied point blank that they would need capital injections and then (it would appear) deliberately mislead on the size of the cash call required before...read article: The Great Short Selling Debate

Who is Right: BoE, ECB, The Fed?
updated 13-Jun-08
With the three major Western currency blocs acting in different ways to the current financial, growth and inflationary problems (one slashing rates, one holding steady and the third looking to tighten) it will be educational in a few years time to...read article: Who is Right: BoE, ECB, The Fed?

Investing in Brewing, Gambling and The Other
updated 12-Jun-08
Many years ago I was reliably informed that, aside from utilities, the best performing sectors in a recession were brewing, gambling and ***. The first seems to be being brought home in the only takeover interest of note for some time with the $46bn bid for Anheuser-Busch. The second is...read article: Investing in Brewing, Gambling and The Other

Building Companies and Land Valuations
updated 11-Jun-08
The drip, drip, drip of bad news was replaced by a veritable deluge yesterday. The building and property sectors plumbed to new lows on figures showing that house viewings and sales for the last three months were actually significantly lower than the worst period of the last house price slump back in the early nineties. The really worrying fact about this is that...read article: Building Companies and Land Valuations

ECB, Inflation and US Markets
updated 06-Jun-08
Mr Berlusconi in particular, never a fan of the EC experiment, must be seriously tempted to publicly voice disapproval with ECB policy and to once again shake the weapon of disengagement from...read article: ECB, Inflation and US Markets

Bank of England and Interest Rates v Inflation
updated 05-Jun-08
Reams will be written about what the Bank of England should do, would do, will do and wants to do. A bit will be written about what various vested interests want them do (generally cut rates) but not much will be written about the whole 'independent bank' experiment and whether it is in fact working...read article: Bank of England and Interest Rates v Inflation

Employment Data, Interest Rates and Growth
updated 04-Jun-08
Employment prospects are finally moving in the direction that the events of the last six to nine months would have led us to expect. Hiring in May was the lowest for five years as companies...read article: Employment Data, Interest Rates and Growth

UK Recession To Be or Not To Be
updated 30-May-08
US preliminary GDP for Q1 duly came in at plus 0.9% which rather makes a mockery of all that talk of recession over the past six months or so. Whilst the rise in energy and fall in house prices since the end of March will...read article: UK Recession To Be or Not To Be

Crude Oil Prices and Tax
updated 29-May-08
Crude Oil is on everyones lips these days and politicians across the globe are falling over themselves blaming just about everyone under the sun for the dramatic rises. Traders, producers, terrorists, refiners, OPEC, the Oil companies...pick a name, any name...of course the real reasons...read article: Crude Oil Prices and Tax

UK Government Taxes and US Housing
updated 28-May-08
US housing numbers were also on the lips of most commentators after the Shiler home price index came in at minus 14.4% and we think things are bad here after property values 'slumped' by all of 1.5% in the past twelve months. This brings out a major factor in...read article: UK Government Taxes and US Housing

Banking Stocks and Market Review
updated 20-May-08
Banking stocks are becoming very worrying indeed. Since B&B announced their ?300m call and Barclays stated a kind of 'we will wait and see' banking stocks have been in ...read article: Banking Stocks and Market Review

Commodity Prices and Interest Rates
updated 17-May-08
Anyone hoping for a cut in interest rates next month can think again as this surprise news would have done nothing for the doves who expect inflation to be capped by a slowing British economy. Whether the economy slows by more than...read article: Commodity Prices and Interest Rates

Time to Spread Bet on Tesco?
updated 13-May-08
Tesco seems to have suddenly decided that enough is enough and is vigorously defending itself across the globe against perceived malicious journalistic falsehoods. For many years the British propensity to denigrate any...read article: Time to Spread Bet on Tesco?

The FTSE 100 and the Credit Crunch
updated 12-May-08
Oil is the word on everyones lips at the moment with economists trying to add in the braking effects of the move from $90 to $126. It is very difficult to be anything other than majorly pessimistic as the US was rumoured to be in recession and Europe and the UK slowing sharply even before the recent price spike. What, you might quite reasonably ask, will be the overall economic impact of ...read article: The FTSE 100 and the Credit Crunch

Spread Betting on the Retail Sector
updated 09-May-08
There is finally a sense of spring in the air from shell shocked investors as the feeling continues to permeate through that the worst is possibly over. Strange as it might sound, from the view point of the stock exchange, this is not as weird...read article: Spread Betting on the Retail Sector

Interest Rates and Commodities Spread Betting
updated 08-May-08
Pushing up interest rates is hardly going to make much impact on the price of Crude Oil, Wheat or Rice. These, and others, are globally competed for commodities and are going to...read article: Interest Rates and Commodities Spread Betting

Spread Betting on Crude Oil Prices and UBS
updated 07-May-08
The unexpected loss reported by Carlsberg this morning might have rather more long term visionary practicality than the Goldmans Oil statement. The company was expected to report a profit of some 37m DKr but actually came in with a 129m loss. The reason given was...read article: Spread Betting on Crude Oil Prices and UBS

High Crude Oil and Energy Prices
updated 06-May-08
With Oil showing no signs of wishing to fall back to a more reasonable level investors must now be wondering what the effect of increased energy bills will be on bottom line numbers. It is easy to criticise companies for not taking adequate hedging risk against...read article: High Crude Oil and Energy Prices

Spread Betting on Unchanged Markets
updated 02-May-08
At the moment our Capital Spreads clients who are following this simple strategy are doing very well indeed just at the moment. Sellers of everything above 6100 and buyers below 6050 have seen six separate opportunities in the last five...read article: Spread Betting on Unchanged Markets

US Interest Rates and Lending
updated 30-Apr-08
I am not sure that the current woes in the US economy can be easily solved with further interest rate cuts as you have the feeling that if you cannot afford a loan at 2.25% what makes you think that 2% will be any better and there is always the...read article: US Interest Rates and Lending

Improving Markets and UK Housing
updated 28-Apr-08
The financial sector seems to be taking the (expected) HBOS rights issue in its stride. With only Barclays to come, and even that is not certain, this is likely to be amongst the last of the big calls. Punters are now trying to look...read article: Improving Markets and UK Housing

Spread Betting Indices and Equities
updated 25-Apr-08
Finally the Capital Spreads Accounts are tiring of Mining and Oil stock and we have seen some lightening of positions and even a few brave shorts. The strength of the main indices across the globe would seem to fly in the face of...read article: Spread Betting Indices and Equities

Credit Suisse Losses and RBS Shares
updated 24-Apr-08
Credit Suisse has managed to hammer the market down this morning after coming with a loss of $2.1bn against estimates of around $600m. Analysts will be sharpening their knives as there...read article: Credit Suisse Losses and RBS Shares

Retailers, UK Centric Stock and the FTSE 100
updated 23-Apr-08
The performance of UK centric stock has been pretty abysmal over the past year or so with many frontline stock virtually halving (RBS, Barclays, Marks etc) whilst the FTSE 100 has actually...read article: Retailers, UK Centric Stock and the FTSE 100

Mortgage Swaps and High Commodities Prices
updated 22-Apr-08
It is difficult to get excited about buying something when you know that there may be more along the way. The Bank of England ?50bn cash for mortgages swap is all very well and at least has the prospect of longer term availability than the ECB or Fed...read article: Mortgage Swaps and High Commodities Prices

Bank Stocks and House Prices
updated 21-Apr-08
The next banking brick to drop remains the prospects in the property markets. Whilst I do not actually envisage a house-price fallout we may get into the equivalent situation but 'in reverse'...read article: Bank Stocks and House Prices

The Bank of England and the Failure of Mark to Market
updated 17-Apr-08
The actions of the BOE may loosen the credit markets temporarily but they are unlikely to make much difference to the levels of suspicion prevalent between the major lenders. Official announcements that there are possibly almost a trillion dollars of poor credit to...read article: The Bank of England and the Failure of Mark to Market

Spread Betting Margins
updated 16-Apr-08
We have been in touch with a number of spread betting companies to see what affect the current credit crunch is having. So far it looks like business as usual and with the operators keen to keep margin requirements...read article: Spread Betting Margins

Is the FTSE 250 outperforming the FTSE 100?
updated 15-Apr-08
When we focus on UK centric FTSE 100 stock the picture is much less positive. The retail and banking sectors are performing pretty poorly with many valuations languishing at a 50% discount compared to just eight months ago. The FTSE 250 is off almost...read article: Is the FTSE 250 outperforming the FTSE 100?

High Commodity Prices, Margins and Weak Government
updated 10-Apr-08
With Crude Oil and other essential commodities continuing to rise as the pound continues to depreciate it is tempting to suggest that the markets seem to be rather sanguine as to the profits expected from many...read article: High Commodity Prices, Margins and Weak Government

Fear and the Falling Housing Market
updated 07-Apr-08
It is difficult to not to think of the current situation as a sort of phoney war on the economic front line. After the initial bursts of activity over the past seven or eight months as the banks have been pummeled you could be forgiven for thinking...read article: Fear and the Falling Housing Market

The Federal Reserve and the Bear Market
updated 04-Apr-08
The Federal Reserve still seems to be, to some extent, in the pocket of Wall Street as virtually every move is designed to bolster equity prices and to keep the dream...read article: The Federal Reserve and the Bear Market

The Federal Reserves Triple Pronged Barrage
updated 03-Apr-08
As the US Federal Reserve does its impersonation of some sheriff in a Glen Ford western riding to the rescue of all that capitalism stands for there are some slightly worrying things that still remain to be...read article: The Federal Reserves Triple Pronged Barrage

Time to Sell Commodities?
updated 01-Apr-08
Big falls in Oil, Silver and Gold over the past few days come after all three failed to regain their highs after the initial sell off of a few weeks ago. For the first time in quite a while the downside looks more probable ...read article: Time to Sell Commodities?

The Capitalist Share Holder
updated 31-Mar-08
The capitalist share holder requirements demand better growth patterns than this and whilst it may weaken companies in times of crisis it also creates far more...read article: The Capitalist Share Holder

Cash and the Hunt for Safety
updated 29-Mar-08
The hunt for safety is becoming ever more problematic. The recent fallout in commodity values has reminded those who had forgotten that, as the adverts say, prices may also fall and past performance gives no certainty of future returns. Government treasuries from the US to Germany and the UK have had a pretty grim week as...read article: Cash and the Hunt for Safety

European Markets and Lower Interest Rates
updated 27-Mar-08
A mishmash of numbers out yesterday and today will leave investors rather fogged as to what is actually happening on the high street in the UK and on the global economy as a whole. Over in Europe the picture is even more confused as business leaders in Germany and France express...read article: European Markets and Lower Interest Rates

Interest Rates and the Property Market
updated 26-Mar-08
It was also nice to see that Citigroup and Barclays Capital are also bringing into question the Bank of England's handling of its role over the past months. The squeeze on liquidity is getting worse, not better, and yesterdays 3 month Libor fixing was at 6% showing that even the small rate cut that we have seen from the central bank has...read article: Interest Rates and the Property Market

Stock Market Rally vs Bank of England Commitment
updated 25-Mar-08
I see that the papers are still full of the *search for the abominable rumourman* but it is difficult to see what, if anything, this will achieve. What if the *culprit* is not an ...read article: Stock Market Rally vs Bank of England Commitment

Forex, Job Losses and Taxes
updated 21-Mar-08
Markets continue to wing all over the place. As I mentioned on Wednesday, if you discounted the moves induced on the days of Fed action the story has been pretty dire since the start of the year and yesterday was a classic case in point. Tuesdays rate cut caused a...read article: Forex, Job Losses and Taxes

The Fed Rally and Active Investors
updated 20-Mar-08
Markets continue to whistle around as we digest the latest Fed led rally in the States. Since mid January we have had five Fed initiative rallies (two liquidity injections and three rate cuts) which have all caused major moves to the upside on their respective announcements. In between times the direction has been, as you would expect, singularly grim. If we remove the...read article: The Fed Rally and Active Investors

Banking Sector Value Shares
updated 18-Mar-08
Rumours that Lehman might be the next in line for implosion after DB Singapore apparently refused their name in the money markets were quickly quashed. The stock was at one point some 50pc down on the day at around $20.50 but later bounced as investment banks...read article: Banking Sector Value Shares

Job Cuts, School Finance and Career Politicians
updated 13-Mar-08
Cowardice in high places is not a new phenomena but this administrations spinelessness is now beginning to show as bright yellow streak across the finance of UK plc. Yet another Budget long on raising revenue but short on...read article: Job Cuts, School Finance and Career Politicians

Finance Lesson from Japan
updated 12-Mar-08
So, the Fed and the ECB are now both taking dodgy mortgage debt as collateral against loans. One wonders how closely these deposits will be checked for value or will the western banks end up in the same boat as the Japanese financial institutions from the early nineties sitting with huge unrealised losses on 20-30 year loans being...read article: Finance Lesson from Japan

Recession or Value Shares
updated 11-Mar-08
As markets get tougher so the wolves begin to strike. Bear Stearns and Lehman were forced into swift denunciations after rumours circulated about possible Chapter 11 situations. Whilst the security of the companies is not reasonably in doubt the mere mention of weakness will have its negative effect. Twitchy depositors, fearful of losing substantial sums will...read article: Recession or Value Shares

AAA Rated Government Insurance
updated 10-Mar-08
Most people reading this article will be of the 40% paying slice of the population, the bit that the government is relying on, to an increasing extent, to balance its books. The taxes on virtually everything we do are now getting to...read article: AAA Rated Government Insurance

Slow Down, Interest Rates and Goodbye London
updated 09-Mar-08
We saw the knee jerk US political reaction to the Enron collapse seriously damage their financial industry by its implementation of the Sarbannes Oxley requirements and it is beginning to look as though the UK authorities are going to make the same mistake. What is the betting on...read article: Slow Down, Interest Rates and Goodbye London

Commodities Price Correction
updated 06-Mar-08
Other commodities are, likewise, not exactly *running out* (although copper is reputed to be looking a tad thin on the ground) and *softs* are an accident waiting to happen. As one product becomes ever more expensive so our food...read article: Commodities Price Correction

Second Class Financial Ticket
updated 04-Mar-08
With a snarling up of basic transport lines business will look elsewhere to invest. We might pride ourselves on the power of the financial sector in the city of London but finance is probably the most portable business on the planet. The logistics of moving money around could not be simpler. HSBC yesterday showed that some 50% of revenue...read article: Second Class Financial Ticket

Credit Crunch Finance
updated 04-Mar-08
Is this the second leg of the credit crunch? The rush into *secure* havens has accelerated over the past few weeks as US Treasury Bond yields slip below 2% and Gold and other Precious metals reach for the sky. Borrowing spreads for even high quality corporate names are at, what appear to be, ridiculous levels as banks scrabble to cover lending exposures in the money markets. Whilst the sharp point of this...read article: Credit Crunch Finance

Private Equity Trading
updated 29-Feb-08
If the credit crunch continues for much longer, many of the deals that companies had been expecting to offload via stock market floats could start to experience certain problems. Given that a number of them will now be coming up for rollover of their initial financing deals, in a dog eat dog environment it does...read article: Private Equity Trading

Private Equity Markets
updated 28-Feb-08
Guy Hands has put up his err...hands and admitted that turning round the entrenched philosophy at EMI was proving rather harder than he expected. When a major private equity house gets involved too heavily in a project of dubious return, especially one as high profile as EMI, investors may begin to...read article: Private Equity Markets

Strong Commodities and Weak Sectors
updated 28-Feb-08
With the economies of the world sucking in ever greater quantities of critical commodities we are now experiencing the classic effects of the first lesson for economics students. Supply and Demand. In places this producing odd results. Whereas a slight...read article: Strong Commodities and Weak Sectors

Long-term Financial Markets Slowdown
updated 26-Feb-08
Official numbers last week showed that, for all the woe, doom, disaster etc discussed in the last few months, there is still an economy out there doing well enough to hold its head above water. The biggest eye-opener was the January tax receipt numbers. In hindsight we should not...read article: Long-term Financial Markets Slowdown

Taxes, Rumour and Finance Directors
updated 25-Feb-08
Both BAE and Tomkins showed weaker numbers but better than might have been feared. Much of market movement can be attributed not to what the actual figure is but what as been *indicated* to the markets...read article: Taxes, Rumour and Finance Directors

High Commodities Prices
updated 21-Feb-08
Markets were in a bearish mood last night as the price of commodities surges virtually across the board from metals to energy and softs. Looking at the data this morning the only sector that seems not to have moved strongly higher is...read article: High Commodities Prices

Credit Crunch Markets
updated 19-Feb-08
Just because the BOE says base rates are at 'x' does not mean that banks can get hold of money at this level. As it happens, yesterday, I had a meeting with one of my oldest contacts who works as a broker with one of the big Money Houses in the...read article: Credit Crunch Markets

Bank Sector Trading
updated 18-Feb-08
For companies that are likely to be around for a very long time, these look (when compared to even their own issued paper let alone UK Gilts) to be very tempting indeed. Punters have been...read article: Bank Sector Trading

Credit Crunch Trading
updated 16-Feb-08
The US is suffering because house prices became a get rich quick route in a country that has one major product in abundance 'Land'. In the UK (although there are a few 100% plus mortgages) most loans are well covered and the value of the asset, the house, will almost certainly cover most...read article: Credit Crunch Trading

Banking Sector Shares
updated 15-Feb-08
The only real option open to Capt'n Darling became his final decision. Offloading the whole kit and caboodle into the private sector with a big government guarantee was never going to fly. The political fall out from...read article: Banking Sector Shares

World Market Trading
updated 14-Feb-08
An entire economy is like a massive super-tanker whose momentum takes an enormous amount of time and space to turn in another direction. Alterations of this magnitude should have shown up in shipping volumes, credit facility increases or just...read article: World Market Trading

The Bear Market
updated 12-Feb-08
The problem has not so much been any particular new piece of information on the UK economy but from the almost universally gloomy statements from the meeting of the 'great and the good' at the G7 Finance ministers get...read article: The Bear Market

Interest Rates Trading
updated 13-Feb-08
Adding the Northern Rock loans to the national debt makes for great headlines but it also shows how spineless the ONS actually is. At least the Northern Rock debt is backed up by a rather good mortgage book on the other side of the balance sheet. There is a whole host of much more...read article: Interest Rates Trading

Rogue Trader
updated 31-Jan-08
Jerome Kerviel, Rogue Trader. We can assume that an audit team, as is normal practice, requested a list of open deals from a counterparty bank and discovered that the counterparty had a series of...read article: Rogue Trader

More Spread Betting Markets Compared
updated 09-Feb-09
We have now added more markets to our spread betting comparison tables and also made a few further improvements. You can now see which companies provide candlestick charts. In the indices comparison tables we have now added DAX 30 and...read article: More Spread Betting Markets Compared

Financial Spread Betting Features 2012
updated 31-Dec-12
An index of spread trading features from 2012 which cover the largest moves in shares, stock market indices, forex and commodities. The articles are a high quality mix of financial commentary, analysis, trading news and...read article: Financial Spread Betting Features 2012

Financial Spread Betting Features 2011
updated 31-Dec-11
An index of financial spread betting articles from 2011 discussing the market moving events in forex, commodities and stock market trading. The features include commentary and analysis and on...read article: Financial Spread Betting Features 2011

Financial Spread Betting Features 2010
updated 31-Dec-10
An index of articles from 2010 with trading analysis and market commentary on the largest moves in stocks, currencies, gold and crude oil. The features also discuss...read article: Financial Spread Betting Features 2010

Financial Spread Betting Features 2009
updated 31-Dec-09
A range of trading articles from 2009 with commentary and analysis on the major forex markets, stock markets and commodities markets. These financial spread betting features cover...read article: Financial Spread Betting Features 2009

Financial Spread Betting Features 2008
updated 31-Dec-08
An index of financial articles from 2008 including analysis and commentary on the major moves across the stock markets, forex and commodities. These financial spread betting features cover topics such as...read article: Financial Spread Betting Features 2008

Spread Betting Strategies
updated 17-May-13
A range of features from industry professionals discussing various market opportunities, financial outlooks, sector trading, spread betting growth areas and...read article: Spread Betting Strategies

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