90,000 Mortgage job losses

CNN have reported that there were 90,000 mortgage industry job losses in 2007, I know of one of them, my old room-mate in Chicago Maurice Mulroe. He is a father of two and was in the industry for a decade, then one day he walks into work and out of the blue is told to go home ‘it’s over’. It took him 7 months to find another job that his skillset could qualify him for, and even low paid jobs were being hotly contested by the new wave of skilled redundancies.

Often redundancies are in industries that are mainly unskilled or manual but the Mortgage Crisis in the US has put people with college degrees, years of expertise and experience out in the cold, and that was part of what gave early January’s increase in the unemployment statistics.

The same thing has happend (albeit to a lesser degree) here in Ireland, Fresh Mortgages entered the market during 2007 and they were a good bunch of people, good at what they did too but then they …

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One prediction you don't want to hear for 2008

I want to make a quick prediction for 2008. It will be (contrary to what everybody else in this industry says) that the property market is going to fall further and the mortgage mess is far from over. My whole living revolves around property so I don’t say this lightly, but it kills me when estate agents and the like keep saying that it will be o.k. when that is clearly not the case, this is a time where you need to be tuned and ideally experienced in order to gain from it.

Remember: when markets almost as much money can be made, in the same way you can buy then sell a share you can also sell and then buy, things moving downwards doesn’t spell disaster or the end of the world as we know it, it just requires looking at the market and being honest with your view, and it means that you may have to work a little harder for the same gain or move away from certain things altogether.

I spoke to a friend of mine …

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One prediction you don’t want to hear for 2008

I want to make a quick prediction for 2008. It will be (contrary to what everybody else in this industry says) that the property market is going to fall further and the mortgage mess is far from over. My whole living revolves around property so I don’t say this lightly, but it kills me when estate agents and the like keep saying that it will be o.k. when that is clearly not the case, this is a time where you need to be tuned and ideally experienced in order to gain from it.

Remember: when markets almost as much money can be made, in the same way you can buy then sell a share you can also sell and then buy, things moving downwards doesn’t spell disaster or the end of the world as we know it, it just requires looking at the market and being honest with your view, and it means that you may have to work a little harder for the same gain or move away from certain things altogether.

I spoke to a friend of mine …

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Obama wins Iowa caucus.

I take an active interest in American politics, and their economy, because so much of what happens there affects us and because I’m half American too. Born in Los Angeles and lived here and there including three years in Chicago which is where I first heard of Barack Obama, an inspirational and highly intelligent politician.

It is on the basis that several months ago I made the first political donation of my life, and it was to his campaign. Naturally I was absolutely delighted to see him win the Iowa caucus. The Iowa caucus is considered to be an early indicator of who will gain the nomination of their political party. Sometimes the losers win out, Bill Clinton (my favourite president since George Washington) only got 2% in the Iowa caucus in 1992.

However, only once since 1974 has the winner of the Iowa caucus actually won the election and that was George Bush, although he didn’t really win the election so I don’t know if it counts or not. Hopefully the next president won’t be a half-witted hillbilly …

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Financial Highlights / Lowlights of 2007

Last year was a market full of ‘surprises’ and here is my list:

1. Affecting my own livlihood the most was the credit crunch. It spread from the US to the Eurozone Australia and then on to Asia.

2. The sub-prime fiasco, and I don’t use the word ‘fiasco’ sparingly – on that note I would ask banks to stop inventing things like SIV’s because it was the inability to value them correctly and the subsequent failures of same which kick started the whole thing. The sub-prime mess hit everything from wall street to London, here, there, everywhere and it even raised rates for all new mortgages in Ireland because the Euribor sat at 6 year high and refuses to drop as far as the ECB had hoped with the latest cash injection, it went from almost 5% to (todays) 3 month money price of 4.64%…. are we getting value for our billions? Does it even matter any more? The fact of the matter is that the likes of Citibank should have its whole board resign and they should have …

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Expect more inflation as Oil Reaches $100

Inflation… commodities bull run is not finished by a long shot! the upsurge in prices of the basic things that we all need is going to cause base level inflation to rise, the kind that could upset China and India’s growth as the things they manufacture become more expensive to make, however the market doesn’t embrace increased end user prices as the are suffering already from the same inflation.

For Oil to hit $100 a barrel is something that people used to joke about, today its real. There is upset in too many of the worlds oil producing regions. Nigeria has some of the best oil but they also have some of the best examples of abuse in human rights (read the story of Ken Siro Wiwa) and there are rebels out there fighting agains the way oil profits are distributed they are called ‘MEND’ or Movement for the Emancipation of the Niger Delta.

Here is something to think about, not a consipracy theory so much as a novel observation: What if it serves the Oil companies to have such …

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ECB release half a Trillion just in case…

The ECB released a further 500 billion, Bank of England 10 billion and the Fed 20 billion This was done as a follow on the the USA’s liquid injection rather than rate cut, the idea is to lower interbank rates, increase liquidity and at the same time not promote inflation.

Thankfully and historically we are seeing a trend here. The Fed, ECB, Canadian Central Bank, Bank of England and the Swiss Central Bank all acted in unison, traditionally this was not the case and its great to see that internationally we can start acting in a global way in a global world. Prior to this we acted in a national way in a global world, central banks didn’t refer to eachother before making a move.

All the banks with the qualifying collateral could buy from the ECB at 4.21% which is what the old Euribor was, this will mean that the people selling from euribor rates will only be able to sell to institutions which don’t qualify for this money, it may also mean that the people who are most …

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Citigroup stock goes down further as COO Robert Druskin resigns.

Citigroup (I earlier mentioned how the Sovereign Wealth Fund of Abu Dhabi are bailing them out) lost another 46 cents on their share price as Robert Druskin the Chief Operations Officer resigned yesterday. The news comes as Vikram Pandit is announced as the new CEO.

Druskin was a close friend of Charles Prince (ex CEO of the group) who was tossed out earlier in the year because of the groups disastrous exposure to the sub-prime loan market.

I sincerely hope he’s not leaving with a golden handshake, I’m a firm believer that Exec’s who expose their shareholders should be treated the same way as a regular staff member who steals from the company. Making any decision that affects share price is what they get paid – damn well – to do, and failure to do it well should result in an equally dishonourable discharge.

The Americans are being disappointingly generous in the way disgraced exec’s are being treated: Enron and a few others being the exception. The market and the people need heads to roll, it’s the only way to …

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IBA invites you to… never mind…actually, we changed our mind. (PIBA & IBA merger is cast out)

The Irish Broker Association (IBA) made an approach to the Professional Insurance Brokers Association (PIBA) whereby their 300 strong membership might amalgamate with PIBAS nearly 800. They all went into a room and entered negotiations. This wasn’t a case where one had a gun to another’s head, it was something that would be of mutual benefit to all brokers in Ireland, because brokers, unlike almost any other industry, don’t have a single representative body.

So it makes total sense right? Of course it does! Standing as a united front and being able to ensure that members reach certain standards of operation, giving a voice to a multi-million euro industry, there is such great scope that I figured ‘even if we have to get over 75% in favour we’ll still be able to do it’. And we were.

Actually, PIBA were, the votes came in and in a voice of unity we voted with an 80% majority to go ahead and make one proper representative body.

The IBA on the other hand, who actually made the approach for all of this …

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IBA invites you to… never mind…actually, we changed our mind. (PIBA & IBA merger is cast out)

The Irish Broker Association (IBA) made an approach to the Professional Insurance Brokers Association (PIBA) whereby their 300 strong membership might amalgamate with PIBAS nearly 800. They all went into a room and entered negotiations. This wasn’t a case where one had a gun to another’s head, it was something that would be of mutual benefit to all brokers in Ireland, because brokers, unlike almost any other industry, don’t have a single representative body.

So it makes total sense right? Of course it does! Standing as a united front and being able to ensure that members reach certain standards of operation, giving a voice to a multi-million euro industry, there is such great scope that I figured ‘even if we have to get over 75% in favour we’ll still be able to do it’. And we were.

Actually, PIBA were, the votes came in and in a voice of unity we voted with an 80% majority to go ahead and make one proper representative body.

The IBA on the other hand, who actually made the approach for all of this …

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