Buying stocks to protect yourself?

Marc Faber makes some salient points to Yahoo! tech-ticker on where he feels the markets and world economy are going and he strongly disagrees with Ken Fisher about the USA having ‘too little debt’. He is strongly anti-cash and feels that commodities and stocks (despite what many believe is simply a bear market rally) are the place to be for the next 2-3 years. An interesting point made on tech-ticker was that the world economy doesn’t need as many people any more, it makes for compelling reading.

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Property Tax 2009: non-principal private residencies €200

The Local Government Act 2009 introduced a €200 annual charge for owners on non-principal private residences

The charge applies mainly to owners of private rental property and holiday homes.  It also applies to vacant residential property unless newly built but unsold (handy if you are a developer, lousy if you are the owner of a newly un-lettable gaff).  Liability to pay the charge is assessed by the owners themselves.  Ownership of a non-principal private residence on the ‘liability date’ (31st July 2009) determines liability to pay the €200 charge.

Payment is due by 30th September 2009. A €20 per month late payment fee will apply from 1st November in respect of each month for which payment is overdue. This bit is interesting – because normally surcharges and penalties for any unpaid tax are much much lower, this amounts to an ongoing 10% fine for every month – while €20 may not seem excessive, it is certainly (when viewed in percentage terms) extreme. Especially given that there is not much being published …

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How many kicks can a broker take?!

How many kicks can a broker take before rolling over and crying ‘uncle!’. A whole bunch it seems.

Today AIB informed the intermediary market that they were capping commissions at €1,500 per loan as a maximum irrespective of the loan size. We feel that banks reward people unfairly and in a ridiculous short-term manner, AIB are no different but they are doing so at the detriment of brokerage.

I’ll qualify that: currently, broker distributed loans are highly profitable for AIB, they don’t have to pay for broker overhead, branch costs etc. I have it on good authority that they have explained this to broker representation bodies in the past, so why curtail any money a broker might make? (As if the current market wasn’t making it hard enough already!).

Simple, because it means you have more money to keep branch distribution alive, and in order to support unprofitable branches you have to find excess profit elsewhere, one of the soft targets is …

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Hedgefunds, risk, and finding the silver lining of any dark cloud.

Here is a simple question: ‘how do you protect or even augment your portfolio returns when markets are crashing or where there is systemic risk?’ if you have an answer then you can be a little smug because the majority of fund managers, the best and brightest the world of finance has to offer, for the most part didn’t have an answer during the last two years and if they did they didn’t (by and large) act upon it.

The classic definition of a hedgefund is not the ponzi-schemes run by the likes of Bernie Madoff, rather it was a fund that strategically goes long and short to produce positive gains regardless of whether the market goes up or down, that was what Winslow Jones was doing when he started the first hedge fund in 1949, while managed fund managers are happy to post a 20% loss when the averaage is -30% (for instance), hedgefund managers are meant to be able to …

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Toxic traders, capitalising on volumes

Joe Saluzzi of Themis Trading (I mistakenly read the link initially as ‘the mistrading’!) have recently published a paper which accuses traders of intentionally trading huge volumes where they buy and sell for the same price and in the process make a half a cent per share. The volume of trading is fictitious ‘high frequency traders’, what they do is buy and sell and collect liquidity rebates from the exchange (note: 50 milliseconds is a huge amount of time) in this game. Do it 8 billion times and it really starts to add up.

This is just depressing, actual investors don’t get to join in because the firms engaged in this are doing it within the actual exchanges using the fastest computer technology available. They also have an unfair advantage in how they trade because they use rules intended to match buyers and sellers to their advantage, they find hidden liquidity and in essence remove it from the market as profit.

The most powerful deterrent would be to make a rule …

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WE HAVE MOVED! To 33 Pearse Street.

We have moved our offices to a new location (still on Pearse Street) to 33 Pearse Street.  It’s about 250 metres towards the city centre from our old offices, and three doors down from O’Neills pub (everybody in Ireland seems to use pubs as landmarks!).

The new office decision came when our lease on our old office came up for review, we felt that there were deals to be had on the market and it didn’t make any sense to stay put, if you drive down Pearse Street aiming to go to the north side then you’ll have to pass our offices, its the place painted red and yellow.

Other than our location everything else has stayed the same (our broadband is temporarily down), you can email us at our regular email addresses and our phone number is still 01 679 0990. Individual broker direct dial phone numbers have changed but we’ll publish them soon on our website and make sure that everybody gets an email.

The blog will be back up to full speed as of next week and …

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Why aren't mortgages MORE expensive?

In looking at any product or service you will often hear people mention ‘supply and demand’, it is one of the foundations of Microeconomics.

Generally if supply increases prices drop, if it decreases prices rise. By how much is a question of how elastic the demand is versus supply.

We know from our day to day experience that there is still a high level of demand for mortgage finance, charting our figures back to 2005 has shown us that if we take out ‘noise’ of m/o/m figures that demand is still at relatively high levels.

However, we also know, from our daily interactions with banks that criteria is getting harder, conditions more restrictive, underwriting is more forensic, the supply of mortgages is decreasing rapidly.

Using a simple chart you would get something along the lines the one below, the blue supply and demand lines show  the situation at a certain point in time, we’ll say that is a year ago, the green line of supply shows the current situation – it has moved to the left because of the decrease.

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Why aren’t mortgages MORE expensive?

In looking at any product or service you will often hear people mention ‘supply and demand’, it is one of the foundations of Microeconomics.

Generally if supply increases prices drop, if it decreases prices rise. By how much is a question of how elastic the demand is versus supply.

We know from our day to day experience that there is still a high level of demand for mortgage finance, charting our figures back to 2005 has shown us that if we take out ‘noise’ of m/o/m figures that demand is still at relatively high levels.

However, we also know, from our daily interactions with banks that criteria is getting harder, conditions more restrictive, underwriting is more forensic, the supply of mortgages is decreasing rapidly.

Using a simple chart you would get something along the lines the one below, the blue supply and demand lines show  the situation at a certain point in time, we’ll say that is a year ago, the green line of supply shows the current situation – it has moved to the left because of the decrease.

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