NIB's 'LTV' Tracker now extinct

NIB had long championed their ‘LTV Tracker’ as the best value product on the market. Indeed it was, but today we have seen the removal of it and must question why they even continued selling at a loss so far into the worldwide financial crisis as NIB themselves would accept, it was a negative margin offering for quite some time now.

NIB’s LTV tracker was born two years ago and ceased to exist as of close of business yesterday. NIB have shown a trend in their marketing, they were amongst the last to offer tracker mortgages and now they are amongst the last to cease offering them. The news comes hot on the heels of news that NIB is responsible for a third of the losses of parent company Danske Bank, those losses amount to c. €80 million.

We had mentioned in the past on this blog that their loans were unmatched, however, …

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ECB Cut Rates by 0.5% bringing the ECB base rate to 3.75%

The ECB rate change has given many of us a pleasant surprise, the ECB has cut rates by 0.5% giving a new base rate of 3.75%. For many of us that means new lower mortgage repayments (if you are on a tracker mortgage) for people on variables you will have to adopt a ‘wait and see’ approach because banks are not obliged to pass on the rate change. The pressure is coming down at least for now.

[Take note: this is not a ‘positive’ rate cut, it can have a positive result but the motivation behind it raises questions about the solvency and losses of major institutions as well as the threat of deflation.]

So, why would a bank opt to not pass on a rate reduction? Simply put, the income from many tracker mortgages does not cover the cost of funds that banks run on and therefore it would not make commercial sense to give people …

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Things are gonna change ’round here.

The banking sector is in for some big changes, today we will consider some of ‘what may be’, this article is taken with a view of looking at some of the results that could come out of the current financial market.

One brief mention is deserved for out all time low-popularity bankers. I am not banker, but I do have some understanding of the financial systems which is what forms my opinion… There are people calling for the government to cap the wages of bankers. We should not have government officials decide their wages, as bankers never decided government wages despite pay rolling the state for years during the upturn. Banks and credit flow are the basis of modern society, lack of which is one of the hallmarks of second and third world countries.

If politicians want to make a true difference they should cut their own wages, its seems ludicrous that our Taoiseach earns more than the President of the USA. And if they want to challenge them on the grounds that financial institutions ‘brought the country down’ it …

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Things are gonna change 'round here.

The banking sector is in for some big changes, today we will consider some of ‘what may be’, this article is taken with a view of looking at some of the results that could come out of the current financial market.

One brief mention is deserved for out all time low-popularity bankers. I am not banker, but I do have some understanding of the financial systems which is what forms my opinion… There are people calling for the government to cap the wages of bankers. We should not have government officials decide their wages, as bankers never decided government wages despite pay rolling the state for years during the upturn. Banks and credit flow are the basis of modern society, lack of which is one of the hallmarks of second and third world countries.

If politicians want to make a true difference they should cut their own wages, its seems ludicrous that our Taoiseach earns more than the President of the USA. And if they want to challenge them on the grounds that financial institutions ‘brought the country down’ it …

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Bailout Abuse – distortions occur within 24 hours of Finance Bill

It is no secret that your author is anti-intervention, we speak at times about market distortions caused by government intervention. The recent finance bill was barely born when Irish Bankers chose to abuse some of the security and opportunities it brought about.

First of all we saw an email go out from Irish Nationwide in the UK going out touting deposit business because the bank was now fully backed by the government. One oversight we will see is that we are now going to do the job of HM Treasury. How? Simply put, the current bill backs Irish banks, not only here, but their branches abroad as well. What that translates into is the Irish state backing sterling deposits for sterling/UK based customers. Obviously there is no issue with clients themselves, they didn’t initiate the finance bill, but is it really the responsibility of the Irish state to extend this protection to other nations?

A further issue is that it will distort …

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The road less travelled and life in the new world

I wrote Monday night/Tuesday morning about buying distressed stocks. So yesterday morning I bought Anglo Irish at €2.94 and today they are sold for €4.55 meaning that the idea brought in a 55% in just over 24 hours, it was risky, yes, but it also brought a return that would take about 7 years in a deposit account. Taking into account capital gains tax it is still 45% clean and clear (although I won’t have any as this is the first stock I sold and it the profit didn’t exceed the €1,270).

However, the point being made by the post yesterday was that it is a time of volatility, it is a time of risk and there are problems in the world, but there is also still PROFIT! The type of trading I did is also not advisable for the average person due to the risk attached, as stated in the first post I was willing to lose, to realise a total loss, if you don’t have the stomach …

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Don’t follow me down this road. Contrarian moves.

The markets took the single biggest battering since the 20% fall off experienced in the 1987 crash. It came on the back of a rejection of the $700 billion bailout plan in the USA. The markets had earlier rallied based on the belief it would go ahead. The S&P dropped 8.8%, the Dow is down 7%.

This is first for me, I was alive and well in 1987 but I wasn’t in the workforce and did not have a full appreciation for what was happening. This is the first big crash I will have worked through, the dotcom crash was no fun, but it was not as big as the mess we seem to be seeing form in the finance world.

In belief that everybody will run scared I am choosing to stay, tomorrow I will buy Irish financial stocks (Tuesday 30th Sept), I’m saying this on record, so if I lose then I lose, that can’t be glossed over. My intention is to get a small portion of the most distressed shares I can buy and to purchase them …

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Don't follow me down this road. Contrarian moves.

The markets took the single biggest battering since the 20% fall off experienced in the 1987 crash. It came on the back of a rejection of the $700 billion bailout plan in the USA. The markets had earlier rallied based on the belief it would go ahead. The S&P dropped 8.8%, the Dow is down 7%.

This is first for me, I was alive and well in 1987 but I wasn’t in the workforce and did not have a full appreciation for what was happening. This is the first big crash I will have worked through, the dotcom crash was no fun, but it was not as big as the mess we seem to be seeing form in the finance world.

In belief that everybody will run scared I am choosing to stay, tomorrow I will buy Irish financial stocks (Tuesday 30th Sept), I’m saying this on record, so if I lose then I lose, that can’t be glossed over. My intention is to get a small portion of the most distressed shares I can buy and to purchase them …

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Where is my bailout?

The average investor has seen their portfolio decrease in value by about 20%, the average property owner is not far off that either. The economy is slowing down and everything seems to be more expensive, so today’s question is: Where’s my bailout?

I am not Bear Stearns, or IndyMac, I’m also not Northern Rock, Fortis or Bradford & Bingley, I am not any number of financial institutions that will soon be set to receive money from the Fed, and even by third world terms I am not ‘too big to fail’. The fact of the matter is that I’m all alone on this one, and I don’t have enough faith in our leaders that I would be comfortable ‘leaving it up to them’. Instead, I want a port in this storm.

Now we can sit back and face the inflation, the inflation that will one day ‘inflate away …

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It’s Official, we are in a recession: Irish recession 2008

I had said back in January that we were on the cusp of a recession, that this would have started out in Q1 and only be realised further down the line. I was wrong, my estimates flawed by a few weeks. Having taken it in the neck from many colleagues I am now partially smug, but more so disappointed because to be honest it means that all the talk of ‘it might happen’ is no longer considered doom and gloom, instead it is fact.

This news is already being reported as far away as New Zealand! How did they get this story the day before we did? Something to do with the international date line I assume, the CSO (Central Statistics Office) released this information today and we had two quarters of negative GDP meaning that we are officially in a recession. How does it feel to ‘officially’ …

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