Survey shows Brokers are the most trusted advisers

Research carried out by Nottingham Business School has shown that Brokers are the most trustworthy group of financial advisers.

The post below is taken from Mortgage Strategy which published the findings:

Brokers and advisers have come out on top in a consumer survey on trust within the financial services industry. Nottingham University Business school has put together the latest Trust Index on behalf of the Financial Services Research Forum which measures how trusting consumers are of the industry.

It found that brokers and advisers received the highest rating on trust and trustworthiness at 81.67.

Brokers and advisers have consistently been ranked the most trusted among financial services firms though have experienced a marginal decline this year. Findings in the latest study, which has been running since 2005, rank independent brokers higher than tied ones.

Banks, life insurance companies and credit card companies received the lowest ratings, at 73.96, 72.69 and 71.55 respectively.Overall the sector earned a trust rating of 75.02, and was deemed more trustworthy than institutions such as the National …

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Magic Thursday 7th of May 2009.

This Thursday there will be a big market move as bank stress tests are officially released, the latest news has indicated that 10 of the 19 largest banks will need to raise more capital, what this means is that 9 banks will have stock prices due for a big leap while 10 will likely see a further sharp decline in their prices.

Some reports indicate that the problems are not actually as bad as some of the analysts have been indicating, however, every bank being considered is currently on a ratings watch in advance of this date with Standard and Poor’s.

There may be some unusual price fluctuations Thurs/Fri if short positions are unwound or covered, likely there will be a lot of people burned on speculation in the coming week, but the good news is that if the new bullet-proof stress tests are met by some of the banks then it will be a sign that the sector is on the …

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European stimulus plans

The ECB meeting is due to meet this week on the 7th and a further 0.25% rate cut is expected which will bring European base rate lending to 1% which is the lowest it will go according to guidance given in the past by Jean Claude Trichet. For mortgage holders this will be a further advantage for those on tracker mortgages and for those who hold variable rates where the cut is passed on.

The question currently is whether or not there will be any stimulus packages mentioned or any idea on what to expect in the coming months, with very concise plans afoot in the US, UK, China, and elsewhere it is likely that the Eurozone will need to make some formal plan as well and move beyond the monetary options of only playing with interest rates.

The EU has a problem other currency zones don’t, that of political cohesion, the USA is all dollar denominated and all under one flag, the UK is the same, as is Japan, …

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A look at Euribor, GBP Libor, and Libor

The graph below shows that despite different base rates in the US, UK, and Europe that our general interbank lending rates are correlated.

One of the issues the US has been struggling with is to get their long term rates down and you can see in the 5-7 year money range (I don’t have the 10yr TNote figures to hand), the idea is to get lending kick-started again, credit flowing is healthy, just not at the bubble levels. The 5yr figure is significant for personal lending and financing away from credit cards via personal facilities.

On the GBP Libor and Euribor the two yield curves are roughly matched so despite the UK having a base rate which is a full 75bips less than the ECB base they are still trading at higher margins. This is down to historic money pricing in the UK and it shows that Europe is truly pursuing a ‘middle of the road’ approach to rates, while the media focus is purely on the base rate …

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Euribor yield curve changes April 2009

Below are two charts of the Euribor yield curve (many thanks to Bank of Scotland Treasury for their excellent daily reports!).

Here we can see that there is not much of an inflationary expectation at year two or three, it is virtually a dip at the 3year mark, then there is some uncertainty, in year four it goes up by about 75 basis points, then we are back into a general steady upward trend.

Only a few days later and the three year price has shot up by 50 basis points, we would read this as being an indication that the markets are forward pricing in some expectation of inflation at the two or three year mark, if the rise filters through to the left hand side then it will be showing a stronger and stronger likelihood of this happening. Appropriately banks have just raised their fixed rates meaning that the window in which people on variables can cash in low are …

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The bear market is bull

The current bear market was ‘seen coming’ by many commentators, the people who believed this have an agenda and reasons for their thinking just as much (although in equal and opposite directions) as ‘always upwards’ promoters have. In other words, trees don’t grow to the sky, but equally their roots don’t grow down the centre of the earth.

Daily on bloomberg, yahoo finance or tech-ticker, CNBC, CNN and other channels there is a select group of commentators who are building notoriety on the basis of having seen the ‘bubble forming’ and while I commend them on this, and have gained some great insight from many, there is a fly in the ointment, that of the unexpected, that of a market that always does what hurts the most people.

The point in this: The super-bears are (in my opinion) about as accurate as the super-bulls. I had an idea last week of deciding that I might start to say ‘we are going to see a recovery, we are going to see a serious market …

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Are we in a cyclical bull market?

Steve Leuthold talks on Bloomberg about the reasons he feels we are going to see a cyclical bull market (as opposed to the secular bear that many feel we are in). Small cap stocks (likely some pinksheets) and many others are headed upwards according to Leuthold who feels that this we are seeing the best valuations he has come across in his 45 years of studying the markets.  He says that a split of 65% in stocks is now advisable, that is a huge weighting given the market moves we have seen lately where equity holders have been continuously wiped out. Big tech stocks and gold both feature in his talk.

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We need to clear our bonds, ensure there are retail offerings.

Ireland has been downgraded by Standard and Poors, we are on a ratings watch with Fitch and Moody’s as well. The last bond issued by the NTMA was not subscribed as widely by the international financial community as they were previously and the Irish stepped up and bought up 55% of the bond, we saved the day ourselves. Now we are at a crossroads, we need to raise money, it will be more expensive given our national outlook and at the same time investors are shying away from our sovereign debt, equally we can’t cut back spending enough to bridge the gap and impressing the international investor market with taxation will hurt our national economy.

There is enough money in this country to clear all of the bonds required, and it is held in ready cash format. …

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