drbubb

Inflation is going to help, if your income is being cut. People who talk about "inflating away the debt" in an environment like this are "smoking something." The debt burden only eases if rates drop, or your income rises. I dont see either of those happening in the present environment No, of course not. My point: we cannot get there "from here" - We have to go somewhere else first. And that "somewhere else" will not be kind to homeowners IMHO. It looks like the banks are already just beginning to close down some of the Blair/Brown era excesses: Lloyds clamps down on interest-only mortgages Lloyds will no longer offer an interest-only option on mortgages of more than £500,000, and will charge more for such loans Lisa Bachelor guardian.co.uk, Thursday 13 May 2010 Lloyds TSB says it will be more difficult for customers to get an interest-only mortgage. Lloyds Banking Group has said it will make it more difficult for customers to take out interest-only mortgages from today. The government-backed bank, which sells mortgages through Halifax and Cheltenham & Gloucester, will no longer offer an interest-only option for customers borrowing more than £500,000. This means a customer looking for a loan of more than £500,000 will have to pay back the entire amount on a repayment basis as the lender does not offer the option of a part-interest and part-repayment arrangement on large loans. It had recently made it more expensive to take out an interest-only mortgage by charging a 0.2 percentage point premium on its standard rates. Today's move, which is designed to reduce the lender's exposure to risky loans, is likely to have the greatest impact on workers in the City who typically borrow high value mortgages on an interest-only basis, with the intention of making repayments with their bonuses. David Hollingworth of mortgage brokers London & Country said: "Large loan borrowers will not be pleased with this news as they will see it as a withdrawal of flexible lending rather than a more responsible approach." Interest-only loans have proved popular over the past decade as millions of borrowers took them out to keep their monthly repayments down during the housing boom. Someone paying off only the interest each month on a £150,000 loan at 4% over 25 years, for example, would pay £500 a month compared to £792 a month if they also repaid part of the capital. Lenders have become increasingly cautious, however, about lending on an interest-only basis. Last October the Financial Services Authority officially branded interest-only home loans as "high-risk", lumping them in with so-called liar loans and mortgages for people with dodgy credit records. It proposed that, in future, people applying for an interest-only deal would have to show they could in theory afford a more costly repayment mortgage. Since then, many lenders have made it more difficult for people to take out such loans, with most reducing their maximum loan-to-values (LTVs) on interest-only lending to 75%. Stringent criteria Lloyds also announced today that is imposing more stringent criteria on all customers wanting to borrow on an interest-only basis. New customers will no longer be allowed to rely on the equity in their home to repay the loan as the sale of the borrower's home, the sale of other assets or a business, and an anticipated windfall from an inheritance are no longer accepted as repayment vehicles. Instead, borrowers will have to prove they have something like an Isa or endowment plan in place and the bank will want further proof that regular monthly payments are being made into such a vehicle. Some lenders, such as Nationwide, do still accept the sale of the borrower's main residence as an acceptable repayment vehicle, but lending to such customers is restricted to a 66% LTV and there must be at least £150,000 of equity in the property. /more: http://www.guardian.co.uk/money/2010/may/1...-only-mortgages == == Squeeze the pips - make the "speculative" property owners squeal, and the others can now be forced to have a sensible amount of equity in their homes.

I agree! Inflation is going to help, if your income is being cut. People who talk about "inflating away the debt" in an environment like this are "smoking something." The debt burden only eases if rates drop, or your income rises. I dont see either of those happening in the present environment

SOME CAUTION is called for Gold-in-Euros has reached a key resistance level. Will it die here, or push up to the next one?

THe Asian currencies are doing well. The Malaysian Ringit was a top performer, I believe

Want to be crushed like a beer can? Try this car: Available in California since Oct.2009 - starts at $25,000 With this one: You can fly to work

Mans., Can you make any sense of this? http://www.bibliotecapleyades.net/ciencia/...ookingglass.htm If it is true, then Wormhole / Stargate techology is already in use More on Dan Burisch: http://www.projectcamelot.org/dan_burisch_summary.html There's more about wormholes here: ...and also about a supposed "treaty" between Majestic and p-45's and p-52's

Rocket? No. But when it does rocket, I want to be on the right side. One reason I took half my profits on PHYS and replaced them with in-the-money calls, was because we often get some seasonal weakness in Gold into the summer months

Saving up ... to buy cigarettes ... in 2016

You can thank Eric King probably

Your next move, Mr. Gold? A tiny rise may be signalling a major breakout has started. We are at a similar moment to when India bought gold back on Nov. 4th

Indeed ! It would be very satisfying if I have nailed the turn. Some criticised me last year for "missing the rally in Gold" (from maybe $950 to over $1200). But I didn't really "miss out": 1/ I bought C$ (FXC) instead of Gold, and that did well, rising 26%, and STAYING UP against the dollar*. 2/ I owned "Bull Calls" on GLD, and some junior miners, that had a good run. 3/ By not being loaded with physical gold, I missed out on the approx. 10% drop from over $1200 to under $1100. *FXC

You are right, of course. My line was a bit "whimsical", but it did show a change - a PM move up in gold. I can redraw it this way:

Tom Obrien says the quick pop in Gold was due to a South Korean boat "going down", with rumors that the North Koreans were involved. The fact that it can even move that way suggests that Gold was oversold.

I didn't wait for that test - I have been buying gold rather aggressively in recent days as: + PHYS / Sprott Gold trust + Some calls on GLD + A handful of mining equities + "Paper Gold" MACE / Taels thru HSBC + Gold coins, now safely stored in my bank vault I like the action in Gold, and it may be set for a run Short Term Daily-GLD .. update == == + + + For those property lovers, we have a new concept: We are going to "let our tenant pay for our Gold purchase". Here's how this works: + We sold several flats, generating enough cash to pay off our mortgages, and also get back our capital + Profits from flat sales more than cover to cost of one of the remaining flats, which is rented + There is a residual mortgage which is more than 50% of our cost, and about 40% of the current value + The rental we receive covers the mortgage payments, and rates are now about 2% With the cash now rolling in from flat sales, we considered to pay off the mortgage - but it is so cheap, that it "seemed a shame" to do that. So... + Instead of paying off the mortgage, we took the cash amount needed to do that, and bought Gold. Now we are sitting with a situation where: Our profits from selling other flats paid for the flat. The mortgage is covered by the Gold, and the tenant is "paying off the mortgage." This is a nice situation to be in, but we will be looking for an opportunity to improve it: + If Property prices spike up, we will sell the flat, repay the mortgage, and maybe buy more gold, or + If gold shoots up, let's say by 50%, we can sell 2/3rds of the gold, repay the mortgage, and keep 1/3 Done this way, Gold, property and debt can sit nicely in the same portfolio

Interesting to see that, and to consider that my 18 year cycle reading yields a projected 2015/16 peak in Hong Kong property. Before that peak, I think we may see a big selloff in HK as US rates rise, forcing HK rates up too. My guess is, that at some point, the HK dollar will be repegged to the Rmb, and that may kick off the last rally

Prechter would argue that very few companies will stay alive, and those few that are still paying dividends will be paying much less I have been building my gold holdings recently, so you could say that I am betting against his gold view (as you bet against his view on stocks)

Bubb's Cafe - what's that? On HPC, we had this discussion: The old one "exceeded bandwidth" and got cancelled. So I thought I'd run this for a few days, before switching. 2010 version . I switched it: Old version ... New version ... Newer .... You will have to live with that for a while, Noodle On GEI, I got tired of just spewing out pessimsitic forecasts, and thought it was time for a warmer and more friendly look, which is what we have had for several months now.

Agree. very interesting But the fractal is not done yet. There's still one more small leg down to complete the old pattern

PHYS - The redemption feature works as follows: An investor in the fund may take physical delivery of a minimum of one 400 ounce bar by contacting the fund on the 15th of each month outlining the details of the delivery request including number of bars and so forth. It’s up to the holder to make arrangements for delivery and this can be cumbersome. However, an investor may opt to arrange with Brinks or another armored car service to pick-up the gold and transfer it to another storage provider who will take and hold London Good Delivery bars. Currently this might cost $2500 per bar which isn’t that costly given prevailing value of a bar at around $450,000. Or, if you’re feeling man enough, you can pick bars up yourself and toss them in the trunk of your mini. Um, bring your shotgun. TAX Advantage What separates PHYS from other products like [[GTU]] (Central Gold Trust) and [[CEF]] (Central Fund Canada) is the redemption feature plus perhaps certain tax advantages. The tax advantage per the prospectus states: “Any gains realized on the sale of units by an investor may be taxable as long-term capital gains (at a maximum rate of 15% under current law)”. This would then avoid the 28% tax on collectables also under current law. There may be circumstances where this can all change obviously. /more: http://finance.yahoo.com/news/PHYS-Another...172888.html?x=0

Sprott's buying ... is one of the things that has helped Gold prices in recent days ++ And look at that Premium! (4.85%) Eric Sprott Has Purchased Nearly 9 Tonnes Of Gold Bullion This Week Jesse's Cafe Americain | Mar. 4, 2010, The Sprott Physical Bullion Trust (PHYS) is now holding 286,870 ounces of gold, with a market value of $327,003,510. The estimated net proceeds of their IPO are approximately $390,000,000, possibly higher depending on total fees for the IPO and initial bullion purchases. They have now purchased 8.923 tonnes of gold bullion since last Friday (at 32,150.746 Troy ounces per metric tonne). The total units outstanding are 40,000,000 for a Net Asset Value of 9.50 including cash and bullion. With the price of the Trust closing at 9.96 today, it is at about 4.85% premium according to their website. By way of comparison, the Central Gold Trust (GTU) closed at a premium of 8.2%. This is on the high side, reflecting gold's recent run higher, and a flight to safety over recent concerns regarding sovereign debt. Gold has reached record prices in the euro and the British pound. /see: http://www.businessinsider.com/eric-sprott...his-week-2010-3

That is good news !

PHYS - Sprott Physical Gold Trust (NYSE ARCA) Sprott Launching Physical Gold Trust It was only a matter of time. Sprott Asset Management has jumped in the recent gold fund pool by filing a preliminary prospectus in the US. While hedge fund Paulson & Co's new gold fund is aimed at betting on gold related investments, Sprott's offering is a little different. Eric Sprott's firm is aiming to launch a $575 million gold bullion fund that will store physical gold and offer investors easy exposure to the metal. This could easily serve as a competitor to the SPDR Gold Trust (GLD) that is currently a popular way for investors to get exposure to the precious metal. This really should come as no surprise given that Sprott had previously penned a piece entitled Gold: The Ultimate Triple-A Asset. Not to mention, their portfolio is littered with metals and mining plays. If their new product is approved, it will be traded on the New York Stock Exchange (NYSE) under the ticker PHYS and on the Toronto Stock Exchange (TSX) under the ticker PHY. The initial public offering price is to be set at $10 per unit. Sprott's physical gold trust is expected to hold 97% of assets in physical gold bullion in London Good Delivery bar form and will not invest in certificates or other instruments. This fund's goal is to be a play purely on physical gold. Their gold will be stored at the Royal Canadian Mint and unitholders will be able to redeem their units for physical gold bullion on a monthly basis if they so desire. Additionally, as of right now they will not make regular cash distributions to the unitholders. In summary, it looks like $4.4 billion Sprott Asset Management has entered into the gold fund game as a direct competitor to the SPDR Gold Trust (GLD). While Sprott is targeting a $575 million fund launch, they will have a long way to go to catch up to exchange traded fund GLD as it currently sports a market cap of $40.5 billion. We'll have to see if their offering takes off as Sprott is a relatively household name in the asset management business. For more thoughts from Sprott on the topic of gold, check out their special report on the precious metal. Read more: http://www.marketfolly.com/2009/12/sprott-...l#ixzz0hFspwVLa == == The option to take physical delivery from the Fund is something new, which brings this one giant step closer to action physical bullion than GLD. I have recently acquired a low 6-figure holding in Gold thru this fund, and may use GLD for options, and PHYS as my long term gold holding.

How much have house prices risen during that time?

from DrB's Diary

I have hedged about 2/3rds of my Dollar exposure recently, by purchasing in-the-money Puts on UUP (a Dollar etf). If I sell 1/3, I will be fully hedged, and if I sell more, then the UUP puts will hedge the Dollar exposure imbedded in my Put positions