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IDS World Markets Fri 21st September 07


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t?s=%5EAORD

 

 

A dip into the red today but the action is not looking particularly bearish. All Ords -0.4% with all sectors down apart from Materials, +0.2%. IT and Telecomms are down the most, both -1.1%.

 

Not much happening with the heavyweight miners, BHP +0.5% and RIO +0.1%. In the golds, Newcrest down after a few big days, -2.4% and Newmont +1.3%.

 

Oils mixed: Woodside +0.7%, Santos -2.5% and Caltex +0.1%.

 

Slight gains in Asia: Taiwan +0.3%, Singers and Sth Korea +0.2%.

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Northern Rock Shares Drop After U.K. Limits Guarantee

 

Northern Rock Plc stock fell 28 percent after the U.K. Treasury said it won't guarantee deposits into new accounts at the lender, which was bailed out by the Bank of England.

 

The U.K. Treasury won't protect new accounts set up at Northern Rock after midnight on Sept. 19, it said. The exception is re-opened accounts that were closed between Sept. 13 and 19. The Treasury also declined to protect debt instruments including covered bonds, subordinated and other hybrid capital, it said.

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w?s=%5EAORD

 

 

A bit of a nowhere day really; All Ords closed -0.5% but most sectors closed down far more than that so it's surprising the index wasn't lower. IT had the biggest drop, -1.4% followed by Telecomms, -1.3% and Utilities -1.2%. The solitary green was Materials, +0.1%.

 

Miners mixed: BHP flat, RIO +0.4%, Newcrest -0.8% and Newmont +0.5%.

 

Oils also varied: Woodside +1.8%, Santos -2.5% and Caltex +0.5%.

 

Mixed & muddled in Asia: China -0.9%, Nikkers -0.6%, Honkers -0.3%, Sth Korea +0.5% and Taiwan +1.4%.

 

 

Over to UK/Europe:

 

t?s=%5EFTSE

 

t?s=^GDAXI

 

t?s=^FCHI

 

http://finance.yahoo.com/intlindices?e=europe

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I guess foreign investors will lose confidence in agency debt now too

 

 

Accord Seen on Revising Mortgage Rules

By EDMUND L. ANDREWS

The Bush administration is softening its opposition to proposals that would expand government-backed mortgage companies ahead of an expected wave of foreclosures.

 

http://www.nytimes.com/pages/business/index.html

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I guess foreign investors will lose confidence in agency debt now too

 

 

Accord Seen on Revising Mortgage Rules

By EDMUND L. ANDREWS

The Bush administration is softening its opposition to proposals that would expand government-backed mortgage companies ahead of an expected wave of foreclosures.

 

http://www.nytimes.com/pages/business/index.html

609574[/snapback]

 

Foreign investors have surely lost confidence. Foreign central banks are another story. They may or may not have any confidence but it doesn't matter. The issue with them is that they are playing defense, propping this market in order to keep feeding their own export driven economies. In the long run, it can't work, but they own so much of this crap already that they have no choice. Who they gonna sell to? And what happens to the 3/4 trillion that they already hold?

 

Seems like a no-way-out proposition to me. I look at the failure of the spreads on these to widen very much and I can only shake my head in wonderment. Unbelievable.

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Anybody see any good deals in Florida real estate?  I'm looking to buy.

609578[/snapback]

 

I have lived in Florida for 20 years, 15 of them as a professional real estate anal cyst. I still watch the supply and demand data curves there very closely. I sold my home in June 2005 and currently rent seasonally spending 8 months a year there.

 

Prices have fallen 20-30% in some areas. But that does not make them cheap. Because of the explosion in insurance costs and real estate taxes even at 20-30% price declines, total housing costs have not fallen. Rising mortgage rates will further compound the affordability problem on the demand side. Few people outside of Florida may be aware of the fact that Florida is no longer benefiting from in migration, as it always has. That's what drove Florida's economy all these years. But now so many people are leaving that the population has stopped growing. In some areas it is even falling. Last year, Palm Beach County had its first decline in school enrollment ever. Prior to that it was always one of the fast growing locales on the planet.

 

On the supply side, there are still countless thousands of condo units coming on stream. Supply will not begin to stabilize until the construction cranes leave the sites and the landscape is dotted with unfinished building shells standing as ghostly monuments to yet another great Florida real estate folly. Based on trends currently in place, it will be years and years before these markets hit bottom. The trends are still negative. I expect prices will need to decline by at least another 30% to even begin to see stabilization.

 

When I see signs of a bottom, in other words, when prices get really cheap, to the point that the rent/buy equation becomes at least a tossup, that's when I would begin to consider buying again. Not before. The truth is, I don't expect it to happen for a generation.

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