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Case-Shiller shows home price plunge






The S and P/Case-Shiller Home Price Index for the U.S. housing market came out yesterday and the news was not good. MarketWatch said: Home prices in 20 major U.S. metropolitan areas have dropped a record 14.4% in the past year, Standard & Poor’s said Tuesday. The 20-city Case-Shiller home price index fell 2.2% from February to March. This is the […]

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Chart of the day: OFHEO House Price Index

Chart of the day: OFHEO House Price Index






Although I prefer the S&P/Case-Shiller House Price Index to look at U.S. house prices (see residential property posts), the OFHEO index has more data, going back to 1975 (instead of 1987 as the 10-city Case-Shiller does). Ultimately, they both tell the same story: accelerating declines in house prices in the US. From a real (inflation-adjusted) perspective, housing price losses in […]

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Chart of the day: Home Prices versus Inflation

Chart of the day: Home Prices versus Inflation






When looking at the 20 biggest markets in the US, home prices have risen at a rate far above the rate of inflation since Jan. 2000. Prices would need to fall 26% nationally to move back to the trendline. However, looking at the 10 biggest markets, using data back to 1987, the inflation trendline shows that prices actually need to […]

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Latest additions to Credit Crisis Timeline






2008 05 19 Crédit Agricole boosts risk controls after writedowns hit €3.3bn2008 05 19 Subprime Losses Top $379 Billion on Balance-Sheet Marks: Table2008 05 19 Banks Keep $35 Billion Markdown Off Income Statements2008 05 19 AIG to raise roughly $20 billion in capital2008 05 20 Credit Crisis Will Extend Into 2009, $170 bn in additional writeoffs2008 05 20 Wachovia, Fifth […]

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UBS warns on non-US property losses






Surprise, surprise. Consider this a holiday surprise as many are out in the U.S. for Memorial Day and in the UK for the Bank Holiday. Multiple sources were reporting that UBS warned in its 985-page capital raising prospectus late on Friday that it anticipates potential further losses in its non-U.S. property portfolio. Well, I could have told you this was […]

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Ed’s Forum: Memorial Day Makeover






Dear Readers, In honor of Memorial Day and the Bank Holiday in the UK, I have given my blog a bit of a makeover. The look and feel is quite different. Hopefully, you find it easier on the eyes and better for navigation. The title has changed from “Ed’s Forum” to “Credit Writedowns: Ed’s Forum” to reflect the subject matter. […]

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George Soros warns UK on economy, oil and inflation






George Soros talked to the Telegraph, and in an article released today, sounded very downbeat about the prospects for the UK economy. M. Soros also said that their were many fundamental supports for the price of oil, including supply ad denand as well as inflation arguments. But ultimately speculative fervour has driven the price in a parabolic move to levels […]

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UK house prices are falling






From today’s Guardian Newspaper: House prices carry on falling Larry Elliott The Guardian, Monday May 26 2008 House prices in England and Wales fell for the eighth successive month in May as potential purchasers continued to shun the property market during the traditional spring buying season, according to a survey by Hometrack. The housing intelligence business said the 0.5% drop […]

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Warren goes to Germany






Warren Buffett is in Germany looking for large acquisitions of German companies. He’s been forced to go global as his size and the US’s competitive position has limited his options in the US. I caught a German-language article from Der Spiegel regarding his activities in Germany. While the article wasn’t particularly revealing, it did quote him as expecting a deep […]

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UK commercial property market falling as well






The Telegraph notes today that Vulture Funds are circling the London Commercial Real Estate (CRE) market. Prices have fallen, but funds are waiting for the other shoe to drop before stepping in. I imagine this will mean credit losses for financial companies in both residential and commercial property markets before all is said and done in the UK. Although there […]

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Debt financing gone






Another side effect of the credit crunch is the lack of availability of cheap debt financing for businesses. Companies have two alternatives: they can hold off on needed financing until the credit markets are more inviting or they can raise money through alternative means like convertible bonds and rights issues (equity offerings). According to The Telegraph, apparently, a lot of […]

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Tales of housing woe in the UK






The Guardian has a brilliant piece out today about how widespread the housing bubble’s downdraft has become. We’re not talking just the South east here but idyllic countryside villages like Ely just north of Cambridge. This should highlight how widespread price and transaction declines are in the UK. The piece is called, “Coming soon to Middle Britain: The Doldrums“ I […]

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