Sterling sinks below 1.50 again

The consolidation period for Sterling did not last long with overnight Asian trading and so far this morning it has been under selling pressure again. 

The reason for the fall today has again been attributed to narrowing polls showing that Labour and conservatives are "neck and neck". 

In addition credit rating agency Fitch has stated that the UK sovereign credit profile has deteriorated and Moody’s has warned that some UK banks could face downgrades. 

To top it off we have received poor economic data with UK RICS house price balance coming in weaker than expected and the UK January trade balance was also weaker than anticipated.

Elsewhere the euro has come under some pressure too against the USD and the JPY. 

Although the Greece situation is becoming yesterday's news, there are a number of other economies to replace Greece such as Portugal and Italy for starters. Expect the euro to remain under pressure for the foreseeable future.

The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.

Sterling crashes through 1.50 to US Dollar

After being sold aggressively across the currency markets yesterday the markets have taken a breather and we now await the next move. 

The political focus with the opinion polls over the weekend indicating that the chances of a hung parliament were much higher. A hung parliament may actually prove successful, however the markets do not like uncertainty and the consensus is that a coalition government will have less political clout to push through the decisive decisions especially in relation to tough fiscal planning which is inevitable.

The Conservatives have come out of the traps today stating that protecting the AAA status is central to their plans- however some feel their proposed aggressive cuts will be detrimental to recovery. 
 
On the other hand Labour propose to wait and cut later but waiting too long could mean that the horse has already bolted and the AAA rating could be lost. So this uncertainty and division is leading to a weaker pound. 
 
Yes this could be good for the UK economy and for recovery but there is a fine line between a weaker pound and the loss of confidence in Sterling and the UK economy- this would lead to a sharp rise in import prices and inflationary pressure especially if commodity prices remain high- not good; this would spill into a pressure on the UK gilt markets and inevitably the UK losing the AAA rating adding yet more pressure. 
 
So you can see the problem that uncertainty is creating. The Pound needs to get back above the psychological 1.50 level against the US Dollar. 

Sterling also lost yesterday on the purchase by Prudential of AIG’s Asian business which led to further selling of GBP and buying of USD in the light of this purchase. 

The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.

Sterling exchange rate lowers against the US Dollar

Fiscal concerns and the contining dovish stance from the MPC continue to weigh on the Pound. 

Throw into the mix increased political uncertainty with the narrowing of the polls and the future does not look bright for the Pound. 

Today we had members of the MPC commenting on the quarterly inflation report where the bank lowered its growth and inflation forecasts underlining a dovish stance on monetary policy. 

King was his usual cautious self and highlighted the fragility in the UK economy and reaffirmed that inflation is likely to come down later in 2010. On the deficit he did note that we have a very large fiscal deficit and that rating agencies are to remain "somewhat uncertain" until the deficit is tackled. 

King affirmed that he would be immensely surprised if rating agencies downgraded the UK.

Another MPC member David Miles noted that the decision not to raise QE was very finely balanced and this has contributed along with the dovish tone overall to sterling slipping 1% against the USD and over 0.5% against the euro.

Later this week we have important feedback in the form of the second revision of UK GDP and also important numbers from RBS and Lloyds- especially critical due to the government involvement. 

The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.

Sterling softens as UK debt is in the spotlight

Sterling has lost over 1% against the euro and just under 4% against the US Dollar in the last month. 

The surprising move is the fall against the euro as the Greek fallout has held court in the media for sometime now and yet sterling falls against the euro. 

Weaker retail sales and weak business and mortgage lending have compounded the weak sentiment, however the real danger for sterling is the UK deficit. 

The economists are arguing with each other on whether to cut now or later- the common agreement is that cuts are inevitable but when? Economists should focus more on the how and what to cut and the politicians should lay their cards on the table with their full deficit reducing plans outlined now to avoid further uncertainty. 

The credit agencies want credible plans and not political or economic disagreement.

Lots of politics thrown into the mix over the weekend with news of a narrowing in the polls and Heseltine touting a hung parliament did not dent sterling further. However we can expect the election run up and the focus on the deficit to continue to affect the pound.

Sterling also lost further ground against the USD following the Feds decision to increase its discount interest rate by 0.25% on Thursday evening. 

The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.

Greeks bonds tragedy in the making

The “Greek tragedy” continues with rumours swirling that the Greeks  have approached China looking to offload €25 billion of their debt. 

The European dream is starting to crumble when on the back of the warning from the ECB that the Greeks will have to sort out their own finances they look instead to the East for a solution.

The euro has again tumbled on the back of this and €1.40 is now the line in the sand. The spread of the 10-year Greek bond yield over benchmark German Bunds also hit a high not seen since Greece adopted the euro in 2001

The US Dollar moved higher yesterday evening after the Fed's monetary policy meeting ended. 

As expected, the central bank left interest rates on hold at the historically low range of 0 – 0.25%, and has been worded in previous statements indicated that it will continue to do so for an “extended period". 

However, it was noted that one member of the committee, Thomas Hoening, voted to eliminate the extended period phrase. It also confirmed the continued plan to unwind its support to financial and credit markets. 

Also of note was its presentation of a brighter economic outlook for the economy than highlighted in its previous statement in December.

The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.

Sterling kicks off 2010 in bright form

As usual, the trading periods between the Christmas and New Year holidays threw up some sharp moves, especially in the Dollar/Sterling cross, with one 24-hour session seeing cable trade up from 1.5850 to 1.6225 before settling back down below 1.6100. 

The few Banks still operating certainly enjoyed themselves. Today we start with Sterling looking relatively firm and the Yen soft. Euro/Dollar, which didn’t experience the more extreme moves seen in cable, remains in the mid 1.43s. 

The Yen has been the weakest currency over the last month since the newly elected government embarrassingly forced the Bank of Japan to change its established tack and boost QE whilst expanding fiscal spending. This has renewed appetite for using the Yen as a funding currency and with expectations that interest rate differentials are set to widen against the Japanese currency, this trading trait looks set to grow, to the Yen’s detriment. 

An article in the Wall St Journal today gives reasons for caution as we enter 2010, singling out the UK as having the worst fiscal position of all the industrialised nations, noting that, unlike several other headline grabbing countries, the UK does not have either an implicit or explicit guarantee from a friendly nation that stands behind its debt should things take a turn for the worse. 

Given that PIMCO (Pacific Investment Management Co), which runs the largest largest bond fund, have announced that it is cutting its holdings of both UK and US government issues owing to the spiralling debt burden in both countries, it suggests that Sovereign standing is going to be the focus going forward.

The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.

Dubai still grabbing the headlines

The Dubai furore continues and undoubtedly will do so for some time; the market seems to have contained the news with a rally in Asian stocks and US stocks steady yesterday. 

What we do know is that if Dubai World defaults then lenders will have to take the hit, however the market feels this is unlikely. As UK banks will be the hardest hit in this eventuality, then sterling has remained soft as the USD gives up its gains. Let us see if the pound can start to play catch up today- it is certainly out of the blocks well.

There were other things happening in the world although they all took a bit of a back seat. Most important was the result of and action that followed the Monetary Policy meeting in Japan this morning. Interest rates were, as expected, left unanimously at 0.1% but the market was surprised by the announcement of a Yen 10 trillion injection of funds into the economy to attempt to stave off the ongoing deflation in the country. 

The cash would be introduced to lenders and be backed by JGBs, Corporate Bonds and Commercial Paper. The Yen dipped initially, recovered a tad and then eased again- nothing substantial but a move in the right direction as far as the Government is concerned.

The Reserve Bank of Australia, as predicted, raised their official rate by 25 basis points to 3 3/4% completing a hat-trick of interest rate rises- a first for the central bank. 

The Aussie remained very quiet with both the decision and the comments that followed widely anticipated. The Nationwide BS in the UK this morning released data that indicated house prices had risen by 0.5% in November and a slightly more sustainable 2.7% on the year. 

No real reaction from the FX markets although this data will help consolidate the Pound.

The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.

What will the impact of the situation in Dubai be?

Well so far, nobody is really sure. Given that both Abu Dhabi and the UAE Central Bank have quickly come forward to assure markets of their support for the beleaguered Emirates State, then the financial impact should be quite minor. 

Certainly, there will be repercussions for Western lenders and there is no guarantee that Dubai’s ‘fairy godmother’ will stand behind its liabilities carte-blanche but equity markets are viewing the situation as containable.

The potential problem is any growth in concern over global Sovereign stability and the fact that CDS spreads have continued to widen suggests that even though things look calm on the surface, there is a lot of thrashing about below the surface. 

If things do begin to look a little dire, then expect the Dollar to come back into focus as risk aversion trades re-emerge.

Despite markets starting to draw their horns in for the run up to Christmas, there might be just time for one more spate of trading especially if the support for Dubai offered from the UAE Central Bank is less rather than more. 

The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.

IVA Individual Voluntary Arrangement service through Wise Money

Our Individual Voluntary Arrangement (IVA) Service offers you access to Schemes for clients who have debt problems but still have income and wish to avoid bankruptcy.

Below is some further information regarding IVA’s that you may find suitable for you. We have a number of companies on our panel that will deal directly with you to assist them with your debt problems.

For financial help a fast online loans calculator APPLY NOW please click here now

Positives	Negatives
Debt free in 5 years	Possible release of home equity
Creditor calls and payment demands stopped	Lasts longer than a bankruptcy
One single monthly payment	All creditors have to be included
Repaired credit rating	There is a minimum level of debt
Legally binding	You cannot borrow during arrangement
Your job status is unaffected	Lasts for 5 years
Interest and charges frozen	You will have to pay back more than bankruptcy
Protection from court action	Your credit rating is damaged
Companies look at you more ethically than they would for bankruptcy	You must be able to service payment plan

What is an Insolvency Practitioner?
A voluntary arrangement is literally as it states – An Insolvency Practitioner (IP) organises an arrangement by a person with their creditors for the discharge of their debt. The schemes require the approval of the court and are monitored.

How long is an agreement for?
The agreement with the creditors allows for a reduced payment each month to be made towards the total amount of debt you owe your creditors. After a period of time usually 5 years the debt is then classed as settled.

How much can the process write off?
An agreement can write off up to 65% of your clients debts (subject to your circumstances). Once you have made your final payment all the outstanding debt is legally written off.

What is the eligibility for an agreement?
This depends on your circumstances. Usually the personnel debt must exceed £15,000 and should be with at least 3 creditors. You must have the income to be able to offer a reasonable amount of payment to your creditors.

Can anyone do an agreement ?
Yes, absolutely anyone in the UK can apply.

What kind of debts can I put on my agrrement?
Store cards, catalogues, credit cards, personal loans, overdrafts. All unsecured debts can be considered including guarantees on business overdrafts and personal debts to the VAT and Inland Revenue however these debts may be treated preferentially within the application.

For help and a fast online consolidate loans calculator APPLY NOW please click here now

The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.

Home Refinance at Wise Money- bad credit and self employed helped

Home Refinance- You may want your loan for major home improvement work, a holiday, to pay school or university fees, or to provide financial support for your children. 

Whatever you need to loan the extra money for we will be happy to listen.

Your loan can be for any purpose and once we have received your completed homeowner loan form your loan application will be processed quickly to ensure your secured homeowner loan is granted as soon as possible. Once your loan is granted you are free to spend your money on anything you wish.

Borrow £5,000 to £1,000,000
Borrow over 3 to 25 years
Simple, fast and straight forward
Free yourself from unwanted debts

For UK loans seekers looking for a fast online loans calculator APPLY NOW please click here now

For UK mortgage refinance fast online mortgage calculator APPLY NOW please click here now

Being refused credit or having a bad credit rating is nothing to be ashamed of and we won't judge you either.

We may still be able to arrange an unsecured bad credit loan for you even if you've been turned down or refused credit many times.

A bad credit history is just that, history. So why not fill in our online form today for a free unsecured bad credit loan quotation and perhaps we can turn your bad credit history into a positive result.

We specialise in helping those previously refused by other companies and high street lenders. Finance for tenants, homeowners, and anybody with bad credit or credit difficulties such as CCJs, defaults or mortgage arrears.

We even arrange loans for the self-employed and those who have difficulty in proving their income.

No matter what you need, experienced and friendly advisors will guide you every step of the way - so your loan application goes ahead quickly, easily and completely hassle free.

What is an unsecured bad credit home loan?

An unsecured bad credit loan is for people who have had problems in the past, and now have a less than perfect credit rating. An unsecured bad credit loan does not require you to use your property as a guarantee or security for the loan either. As it is unsecured, the loan offers a little more flexibility to the borrower that does not wish to put their home at risk.

Who are the loans for?

Unsecured Home Loan Calculator are in the first instance, best suited to those with a bad credit history who do not wish to secure the loan against their property. In the second instance, an unsecured bad credit loan is often the only option for people or tenants who suffer with a bad credit history and have no property to secure the loan against.

Who can apply for a loan?

The simple answer is anybody can apply for an unsecured bad credit loan, however in reality before an application can be processed your age and employment status are taken into consideration.

You may need to arrange finance for a new car, a well-deserved holiday, home improvements, to pay school or university fees, or to pay off credit cards or an overdraft.

Your finance can be for any purpose and your application will be processed quickly to ensure your monies are granted as soon as possible. Once your loans are granted you are free to spend the money on anything you wish.

As long as you are employed and you are over 18, you can apply. Please contact us today for a free no obligation quote.

Our lenders provide some of the most competitive finances in the UK. So if you’re looking for a help and you’re a UK resident why not ask for a quote?

At Wise Money we work with a number of different financial services providers. As a result we find that we are able to provide competitive rates and terms for a wide range of different personal circumstances.

You can choose between a secured or an unsecured credit and it can be for any purpose. All that our lenders ask is that you can meet the monthly repayments and that you’re a UK resident.

You can expect a prompt and efficient service. An in-principle decision will be made as soon as possible and once your application has been fully processed your money is made available to you as quickly as possible which you are then free to spend as you wish.

Please click here now to APPLY NOW online here now

The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.

Debt Management UK through Wise Money

Debt Management UK consolidates all your outstanding loans in to one affordable monthly or weekly payment.

This is an informal arrangement made between your and your creditors. We have a number of providers of finance that may be able to assist you. The finance company will take details of your outstanding credits, income and outgoings, and provide proof to your creditors that they can't afford current repayments. 

You will then make one affordable payment to the finance company, which will in turn distribute this to your creditors. Typically, the new payment is half your existing payments, but will depend upon individual circumstances. The company charges an administration service for arranging this for you.

How can this help you?
* It creates lower payments for you.
* Payments are based on your disposable income.
* One payment.
* Less hassle, you pay the company and they forward payments to your creditors.
* Creditors liase with the company not you.
* Client control.
* If your circumstances change for the better or the worse, you may adjust your payments accordingly.
* No need for you to get involved in legal proceedings.
* Unlike an IVA, this is an informal agreement, not involving the courts and it does not require minimum loans levels.
* Does not put your home at risk.
* Unlike a secured consolidation loan, you do not run the risk of having your home repossessed should you not be able to make payments.
For financial help a fast online consolidate loans calculator please click here now

Examples of where credit refinancing fits in...

Total loans amount: £39,000
Was paying: £891/month
Now paying: £396/month
Client has totals outstanding loans of £39,000 with 7 creditors. He was aged 67 with a household income of £1,150 per month (including his own and his wife's pension). He was paying out £891per month. He owns his home, without a mortgage, valued at over £400,000. He was unable to get a mortgage or secured loan due to age and insufficient disposable income. We have reduced his payment to £396, with a view to getting a mortgage or downsizing his home in the future.

Total loans amount: £12,950
Was paying: £350/month
Now paying: £180/month
These clients were repaying all their monthly credit payments until the husband lost his job, halving the household income. A few months later the savings which they had were all gone and so they tried looking at an unsecured loan to reduce monthly payments, not being homeowners they were unable to borrow against their property. Their low income ment that they were unable to get any type of loans and now they were beginning to miss payments. The clients looked at the possibility of an IVA but as the husband would be returning to work, an IVA would effect the client for too long given that the husband may be able to return to work within the year. A credit arrangent was the right solution for them because the payments were flexible and could be increased when they were both working again.

For financial help a fast online consolidate loans calculator please click here now

Even if you’ve got a bad credit history you can still apply for help. A bad credit history should not put you off applying for finance and we have helped many customers who have been turned down in the past by other lenders. Being refused credit or having a bad credit rating is nothing to be ashamed of and we won't judge you either.

A bad credit history is just that, history. So why not fill in our online form today for a free quotation and perhaps we can turn your situation into a positive result.

Finance for tenants, homeowners, and anybody with bad credit or credit difficulties such as CCJs, defaults or mortgage arrears. We even arrange loans for the self-employed and those who have difficulty in proving their income.

For help and a fast online consolidate loans calculator APPLY NOW please click here now

The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.

Debt Consolidation Loans with Wise Money for bad credit and self employed

Debt Consolidation Loans by Wise Money- UK loans calculators and UK mortgage calculators for the self employed, contractors, consultants, company directors, freelancers- people in adverse, poor and bad credit situations, tenants, arrears or court judgments- monthly payments can be consolidated and reduced by up to 70%

For UK consolidation debt loans seekers a fast online consolidate debt loans calculator APPLY NOW please click here now

For UK mortgage holders looking for a fast online mortgage calculator APPLY NOW please click here now

Debt Consolidation Loans- if your debts are becoming unmanageable you may be considering a debt consolidation loan. This may mean you will be repaying your loan for a longer term but debt consolidation loans could lower your monthly repayment to a more manageable amount.

Debt consolidation loans can be secured or unsecured: if you wish to borrow a considerable amount of money, or your credit history is poor, or you may just want the lowest possible interest rate, it may be necessary to secure your debt consolidation loan against an asset you own, usually your house. Talk to an Finance adviser to discuss your situation and they will help you decide the best option for your situation.

Borrow £5,000 to £1,000,000
Borrow over 3 to 25 years
Simple, fast and straight forward
Free yourself from unwanted debts

For UK loans seekers looking for a fast online consolidate debt loans calculator APPLY NOW please click here now

Bad Credit History Loans- Even if you’ve got a bad credit history you can still apply for help. A bad credit history should not put you off applying for a loan and we have helped many customers who have been turned down in the past by other lenders.

You may need a loan to provide extra cash, to buy a van, take a short break, or to pay off credit or an overdraft. Whatever you need the finance for we will consider your application.

Being refused credit or having a bad credit rating is nothing to be ashamed of and we won't judge you either.

We may still be able to arrange an unsecured bad credit loan for you even if you've been turned down or refused credit many times.

A bad credit history is just that, history. So why not fill in our online form today for a free unsecured bad credit loan quotation and perhaps we can turn your bad credit history into a positive result.

We specialise in helping those previously refused by other companies and high street lenders. Finance for tenants, homeowners, and anybody with bad credit or credit difficulties such as CCJs, defaults or mortgage arrears.

We even arrange loans for the self-employed and those who have difficulty in proving their income.

No matter what you need, experienced and friendly advisors will guide you every step of the way - so your loan application goes ahead quickly, easily and completely hassle free.

Personal loans- If you’re looking for ersonal finance talk to a adviser today to discuss your financing requirements. We work with a range of providers to ensure we can offer you good terms and interest rates on personal finance.

Your personal finance may be for any purpose, from a new vehicler to an overseas trip, whatever you want the additional money for we will try and help. Once your application has been processed, an in-principle decision can be made very quickly. When your application has been approved your money will be made available as soon as possible, and you are free to spend it as you wish.

Please click here now to APPLY NOW online here now

The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.

Consolidate Debt Loans with Wise Money for bad credit and self employed

Consolidate Debt Loans by Wise Money- UK loans calculators and UK mortgage calculators for the self employed, contractors, consultants, company directors, freelancers.

People in adverse, poor and bad credit situations, tenants, arrears or court judgments- monthly payments can be consolidated and reduced by up to 70%

For Consolidate debt loans seekers a fast online consolidate debt loans calculator APPLY NOW please click here now

For UK mortgage holders looking for a fast online mortgage calculator APPLY NOW please click here now

Consolidate debt loans- if your debts are becoming unmanageable you may be considering a debt consolidation loan. This may mean you will be repaying your loan for a longer term but debt consolidation loans could lower your monthly repayment to a more manageable amount.

Debt consolidation loans can be secured or unsecured: if you wish to borrow a considerable amount of money, or your credit history is poor, or you may just want the lowest possible interest rate, it may be necessary to secure your debt consolidation loan against an asset you own, usually your house. Talk to an Finance adviser to discuss your situation and they will help you decide the best option for your situation.

Borrow £5,000 to £1,000,000
Borrow over 3 to 25 years
Simple, fast and straight forward
Free yourself from unwanted debts

For UK loans seekers looking for a fast online consolidate debt loans calculator APPLY NOW please click here now

Bad Credit History Loans- Even if you’ve got a bad credit history you can still apply for help. A bad credit history should not put you off applying for a loan and we have helped many customers who have been turned down in the past by other lenders.

You may need a loan to provide extra cash, to buy a van, take a short break, or to pay off credit or an overdraft. Whatever you need the finance for we will consider your application.

Being refused credit or having a bad credit rating is nothing to be ashamed of and we won't judge you either.

We may still be able to arrange an unsecured bad credit loan for you even if you've been turned down or refused credit many times.

A bad credit history is just that, history. So why not fill in our online form today for a free unsecured bad credit loan quotation and perhaps we can turn your bad credit history into a positive result.

We specialise in helping those previously refused by other companies and high street lenders. Finance for tenants, homeowners, and anybody with bad credit or credit difficulties such as CCJs, defaults or mortgage arrears.

We even arrange loans for the self-employed and those who have difficulty in proving their income.

No matter what you need, experienced and friendly advisors will guide you every step of the way - so your loan application goes ahead quickly, easily and completely hassle free.

Any purpose loans- If you’re looking for loans for any purpose come and talk to us about your requirements. Whether you’re considering secured or unsecured loans, we will help you find the best loans with the lowest interest rate and the most preferential terms available to suit your individual circumstances.

You may need to arrange a loan for a new car, a well-deserved holiday, home improvements, to pay school or university fees, or to pay off credit cards or an overdraft.

Your loans can be for any purpose and your application will be processed quickly to ensure your loans are granted as soon as possible. Once your loans are granted you are free to spend the money on anything you wish.

Personal loans- If you’re looking for ersonal finance talk to a adviser today to discuss your financing requirements. We work with a range of providers to ensure we can offer you good terms and interest rates on personal finance.

Your personal finance may be for any purpose, from a new vehicler to an overseas trip, whatever you want the additional money for we will try and help. Once your application has been processed, an in-principle decision can be made very quickly. When your application has been approved your money will be made available as soon as possible, and you are free to spend it as you wish.

Please click here now to APPLY NOW online here now

The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.

Credit tightening threatens China's giant Ponzi scheme

China's loan growth plunged in July while exports fell 23pc from a year ago after grinding lower for nine months as consumers in the West tighten their belts further.

The data raise fresh doubts about the strength of global trade and whether the world can rely on China's growth miracle to power recovery.

Separately, the Baltic Dry Index – measuring freight rates for bulk goods – has tipped over, dropping 25pc since late July. The shipping figures buttress reports that China has stopped building up stocks of metals and other commodities after a spate of frantic buying over the early summer.

China's central bank said loan growth fell to $52bn (£31bn) from $248bn a month earlier, although it is too early to tell whether Beijing has begun to rein in credit after the explosion of bank loans in the first half of the year.

The loan figures are being watched closely by analysts and traders in the City. Excess liquidity in China has been a key driver of global markets since the rally began in March.

Beijing is walking a tightrope by trying to offset the collapse in exports – almost 40pc of GDP – with an investment blitz in roads, railways, and industry through state-owned companies.

The real economy cannot absorb the money, so it is leaking into asset speculation. The central bank estimates that 20pc of fresh credit has ended up in equity markets. The Shanghai index is up 80pc this year, though profits have fallen by almost a third. The pattern echoes the final phase of Japan's Nikkei bubble in 1989.

China is a big fat tail risk for world markets. Shanghai equities have reached the same extreme as in late 2007. The country will have to cut credit growth, and when this happens, Shanghai equities and commodities will suffer. That is what could bring this global rally to a halt.

The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.

FTSE 100 heads for sixth rise in a row

London shares climbed in early trade on Monday, on course to rise for the sixth straight day, tracking gains in Asia as a last-minute $3bn (£1.8bn) rescue of US CIT Group lifted sentiment.

By 0811 GMT the FTSE 100 rose 36.79 points, or 0.8pc at 4,425.54, after posting its best weekly rise since early January on Friday.

UK stocks were lifted after shares in Asia rose to a 10-month high, the best performance since the collapse of Lehman Brothers, as strong U.S. corporate earnings spurred optimism about the pace of global economic recovery.

Banks were the biggest gainers on the UK index, with Barclays, HSBC, Lloyds Banking Group and Royal Bank of Scotland rising between 1.2pc and 5.9pc.

The market also drew support from data from property website Rightmove showing that the falls in property prices in England and Wales over the past year may have bottomed out.

Miners were higher as metals prices benefitted from the prospect of a global recovery. Anglo American, BHP Billiton, Eurasian Natural Resources Corp, Kazakhmys, Rio Tinto and Xstrata were up between 0.6pc and 3pc.

Friends Provident gained 1.5pc after financial buyout firm Resolution sweetened its proposed offer for the insurer, including a cash element and a commitment on dividends.

Defensive stocks fell out of favour, with tobacco firms British American Tobacco and Imperial Tobacco down 0.7pc and 0.5pc respectively. Food retailers were also lower, led by a 0.5pc fall in British supermarket Tesco

Global markets were lifted by U.S. lender CIT Group's tentative deal with bondholders for $3 billion in rescue financing, a move which would prevent the firm becoming the latest casualty in the financial crisis.

Further positive news on the global economy came as a survey released on Monday by a group of economists found that the recession in the US appeared to be easing but had probably not yet ended.

The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.

UKFI to outline plans for bank investments after losing £11 billion

UK Financial Instruments (UKFI), the body that manages the Government’s shares in some of Britain’s biggest banks, today admitted that it is sitting on paper losses of £10.9 billion.

The body, which is in charge of the Government’s 70 per cent stake in Royal Bank of Scotland and its 43 per cent holding in Lloyds Banking Group, also refused to give an indication of when it expected to dispose of the shares in the lenders.

The UKFI said today that every household in the country has more than £3,000 invested in Lloyds and RBS shares

The UKFI said: “Our own task of returning these investments to the private sector is challenging.

“The amounts involved are very large, and a successful disposal of our holdings will require professionalism and patience.”

The losses in the banks is less than the £18.1 billion shortfall revealed in February.

UKFI’s report makes clear that it could be years before RBS and Lloyds are back in private ownership, although the ultimate decision on any disposal will be taken by the Treasury.

It adds that the most likely exit for the labour Government will be through an initial public offering of the stakes.

“While there are many possible approaches open to us, including strategic sales, our central assumption in thinking about our disposal programme is that we are likely to be selling shares to investors in the public equity markets,” said the government body this morning.

The Government’s stakes in RBS and Lloyds will increase when the Treasury’s insurance scheme — the Asset Protection Scheme — kicks in. At that stage, taxpayers will probably own more than 80 per cent of RBS and more than 60 per cent of Lloyds.

The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.

The perils of bangers for cash- Chinese style

Say what you like about the Chinese, they certainly know how to do economic stimulus.

The 3.9 per rise in British private car sales in June announced this week was hailed as a great success. It was clear evidence that the labour Government’s “bangers for cash” car scrappage scheme and other efforts to revive the economy were starting to work.

Big deal. In China, June car sales were up whopping 48 per cent. Now that’s what I call a stimulus.

It just shows what you can do when you own the banks. Yes, I know we own our banks, too, but that’s different because labour are too incompetent- and broke to do anything that really works.

When China decided it needed a stimulus package, it chose to create one by ramping up government spending and opening the lending spigots.

Bank chiefs were told to flood the economy with credit and competed with each other to get the most money out the door. The result was a tidal wave of cash, with bank lending in June twice the level in May.

The authorities are now worried about inflation, a property bubble and future bad debts. But it has kept the economy growing at a decent lick despite the slump in exports. This is good news for many foreign companies, particularly carmakers. Jaguar Land Rover will this year sell many more than the 12,456 vehicles it shifted in China in 2008.

But China’s growth may actually be a net negative for Britain in the short term because of its impact on commodity prices. As Barclays Capital pointed out in a recent report, the effect of Chinese growth on the price of oil and metals seems disproportionate to its share of the world economy.

For the British economy, the near-doubling of the oil price in the past six months is a high price to pay for selling a few more Jags.

Although the oil price has fallen back by more than $10 a barrel in the past two weeks, economists warn that at above $60 it is one more reason to be nervous that flickers of life in the British economy could be snuffed out.

Recent signs have been discouraging, notably the 0.5 per cent fall in factory output in May published this week.

Against this background, yesterday’s decision by the Bank of England’s Monetary Policy Committee not to extend its quantitative easing programme was a surprise.

The purchases of bonds using newly created money have had limited impact so far.

The Chinese are clearly storing up serious potential problems in the future. But the British economy is still in such a fragile state that there remains more risk in doing too little than too much.

The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.

US banks close as private equity evaporates

Seven banks were closed by the American banking regulator in one day last week.

The banks, including six in Illinois, were brought down by plunging property prices, bad loans and high-risk investments.

The bill to the Federal Deposit Insurance Corporation (FDIC), the country’s $49 billion bank deposit guarantor, for this round of failed banks was expected to hit $314.4 million (£194.4 million).

Coming on top of 46 collapses already this year, last Thursday’s failures — the most seen in a single day during the financial crisis — added a touch of urgency to the FDIC’s problem: how to offload these liabilities while not increasing the risks to its fund. “We want non-traditional investors,” Sheila Bair, the FDIC’s chairman, explained. “There is a significant need for capital and there is capital out there.”

The FDIC is funded by the banking sector and returns from its investment in US Treasury bonds. When a bank fails, the corporation protects customers’ deposits, usually up to the value of $250,000.

America’s recession has caused the number of bank collapses to rise steeply, increasing the FDIC’s interest in selling some banks to avoid pressure on its funds.

At the same time, the most likely buyers, from the private equity industry, have their own problems. According to Preqin, the data provider, private equity funds were sitting on a $1 trillion war chest at the beginning of the year — but they are unable to do the highly leveraged deals that they favour because banks are no longer offering big loans for buyouts.

So far, attempts by the FDIC to sell failed banks to private equity groups have been mixed. It sold IndyMac Federal Bank, of California, in January for $13.9 billion to a group of investors that included George Soros, Christopher Flowers and Michael Dell, the founder of Dell.

In May a consortium including Carlyle Group paid $945 million for Florida’s BankUnited Financial, which came with a guarantee that the FDIC would take most of the future losses from the bank’s existing books of business.

The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.

UK's debt will quadruple unless drastic steps are taken, says S&P

Britain's national debt will quadruple to peaks only ever seen in the wake of the Second World War unless the labour Government takes drastic steps to address the pensions and ageing crisis, Standard & Poor's has warned.

The ratings agency has calculated privately that the UK's public sector debt could quadruple from its current level of just over 50pc of economic output to 200pc or above within the next four decades as the cost of servicing public sector pensions, ballooning social security costs and healthcare burdens becomes overwhelming, The Sunday Telegraph has learned.

The warning is doubly sobering since S&P last month placed Britain's debt on to "negative outlook" – an explicit signal that it could soon be downgraded.

Although the agency calculated two years ago that the effects of an ageing population, alongside high pensions and healthcare costs could push Britain's net debt up above 150pc by 2050, it now fears the added cost of the financial crisis means the debt mountain could in fact rival that in 1945, when the cost of fighting a world war pushed debt well beyond 200pc of GDP.

The warning coincides with research showing that the true size of the UK's unfunded public sector pensions deficit, which needs to be funded through taxpayer's cash, is now £1,177bn – a staggering £20,000 for every person in the UK.

A study for the highly respected British North American Committee, written by former Bank of England economist Neil Record, finds that the UK shortfall is far more severe than in the US or Canada.

The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.

Britain facing biggest deficit in Western world, warns OECD

Hopes that the biggest post war economic slump will soon end have been dashed after the rich world's leading economic institution slashed its forecasts for economic growth and warned that Britain next year faces the worst deficit in the industrialised world.

In a further blow for Alistair Darling, the Organisation for Economic Co-operation and Development also warned that the Government may have to pump more than £130bn extra into the banking system.

Most economic statistics released in recent months have been better than expected, including the CBI's distributive trades survey yesterday, which was the strongest for a year.

However, the OECD downgraded its forecast for UK growth this year to a contraction of 4.3pc – compared with a previous forecast of -3.7pc.

The cut is significant, since the OECD chose on the other hand to increase its growth forecast for the world's leading industrialised economies from -4.3pc to -4.1pc. It added that the 30 member OECD would grow by 0.7pc next year, while Britain would stagnate, not growing at all.

The OECD said that not only was Britain's fiscal position far weaker than its neighbours, following many years of high borrowing by Gordon Brown, the UK was also more vulnerable to a consumer slowdown associated with falling house prices.

The Paris-based institution said the Government's fiscal deficit next year would climb to 14pc of gross domestic product – higher than anywhere else in the OECD, including Ireland and Iceland. The report urged the Bank of England to keep "the [interest] rate as close to zero as possible up to end 2010."

It also warned that more taxpayers' money may have to be poured into the financial system, saying: "further bank losses may well require substantial further capital injections by governments." It said the UK may have to spend a further 3-9pc of GDP – equivalent to £45bn-£135bn.

The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.

ECB lends record €442 billion to banks

The European Central Bank said today that it lent a record €442.24 billion at 1 per cent in one year funds to commercial banks.

The previous record for the central bank’s refinancing operations was €348.6 billion in two-week funds on December 18, 2007 as crisis-hit commercial banks scrambled to bolster their balance sheets during the crunch year-end period.

Interest rates overall would be expected to remain low, a key issue as the eurozone grapples with what is likely to be slow recovery from the worst global recession in more than 60 years.

The ECB has resisted the so-called "quantitative easing" practised by the US Federal Reserve and Bank of England — essentially printing money to buy government and private debt to boost recession-hit economies.

The ECB, however, has generated a flood of cash through loans that will now extend to 371 days, or 12 months, from one week to six months in the past.

Analysts had expected banks to leap at the chance to get an unlimited one-year loan at the ECB’s lowest rate ever.

The central bank has said that in subsequent one-year operations — the next is scheduled for September 29 — the rate could be higher depending on market conditions.

By providing huge amounts of cash to commercial banks, the ECB aims to lower the cost of borrowing by companies and individuals, and spur economic activity.

Money markets influenced by central bank operations determine the flow of credit for vast numbers of people around the globe, from managers trying to fund their businesses to families and students seeking mortgages and personal loans.

The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.

Public borrowing hits record high of £20bn

Public borrowing hit a record £19.9 billion in May as the recession continues to take its toll, official figures revealed yesterday morning.

May's borrowing was nearly double the £10.6 billion borrowed in April. Public sector net borrowing for this financial year is now £30.5 billion — more than twice the level seen at the same stage 12 months earlier.

Even though May is traditionally a weaker month for public finances, borrowing over the month is the biggest figure since the Office for National Statistics’ (ONS) records began in 1993.

Public sector net debt reached £774.8 billion last month, equivalent to 54.7 per cent of gross domestic product (GDP), far exceeding Labour's now defunct fiscal rules which said that debt would never exceed 40 per cent of GDP.

The number of people claiming unemployment benefits has risen by more than 80 per cent over the last year as companies cut jobs in the face of the sharp economic slowdown.

The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.