Loans and Finance

Loans and Finance

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News and information about loans, money, debt, finance and business issues.

Wednesday, May 31, 2017

Europe's Moral Obligation To Greece

Greek Finance Minister Euclid Tsakalotos has said that Europe has a moral obligation to grant Greece some form of debt relief, and the International Monetary Fund needs to make up its mind whether it will join the country's bailout.

All very true, maybe. 

However, the fact that Greece has gone through financial hell as a result of its dishonesty/stupidity and the stubbornness of the EU/IMF, I wouldn't bet any money on the IMF or Europe coming round to Mr Tsakalotos's viewpoint any time soon!

Tuesday, May 30, 2017

RBS Reaches £200M Settlement

RBS has reached a last-minute deal worth about £200 million with thousands of investors who claim they were misled during the bank's 2008 rights issue shortly before a government bailout wiped out its share price.

In a letter to shareholders released Monday, the RBoS Shareholders Action Group recommended accepting the deal for 82 pence per share, below its previous damages range of 92 pence per share to 234 pence per share.

The group is the last of five sets of shareholders still pursuing claims that the bank misled investors with its £12 billion rights issue during the 2008 financial crisis, before the £45 billion government bailout wiped out RBS' share price. A trial had been set to begin in late May but was repeatedly postponed after RBS made the 82 pence per share offer on May 20.

Law360UK quotes the shareholder group's letter:
"Until this offer was made, we were not satisfied that previous offers proposed by the bank were close enough to what may be considered an acceptable amount, bearing in mind our legal team's advice as to the true merits of the case.

In contrast, we did consider that the offer of 82p per share, being almost double that of the bank's previous offer, to be worth serious consideration."
This of course means that Fred Goodwin will not be appearing in court.

Wednesday, May 24, 2017

Moody's Downgrades China

Moody's has downgraded China's long-term local currency and foreign currency issuer ratings by one notch to A1 from Aa3, with the outlook falling from stable to negative.

The downgrade will lead to increased borrowing costs. As such, it is not surprising that China's finance ministry said Moody's was exaggerating the mainland's economic difficulties and underestimating reform efforts.

Moody's said in a statement that the downgrade reflected expectations that China's financial strength would "erode somewhat over the coming years, with the economy-wide debt continuing to rise as potential growth slows".

Ironically, the Chinese economy expanded by 6.7% in 2016 compared with 6.9% the previous year, the slowest growth since 1990. Other countries would kill for that level of growth!

Friday, May 19, 2017

Fred GoodwinTo Appear In Court

Reuters reports that Fred "The Shred" Goodwin (ex boss of RBS and ex knight of the realm) will appear before disgruntled investors in court next week.

He will become the first senior banker in Britain to be challenged in court over his role in the financial crisis.

A civil trial brought by thousands of RBS investors opens on Monday, alleging the banks' shareholders were misled by Goodwin and other former executives over the bank's financial health ahead of a £12BN cash call in 2008.

Don't expect any dramatic revelations though!

HSBC's "Secure" Voice Recognition System Sucks


The BBC have managed to shoot holes in HSBC's claims that their voice recognition system is secure.

BBC Click reporter Dan Simmons set up an HSBC account and signed up to the bank's voice ID authentication service.

HSBC says the system is secure because each person's voice is "unique".

However, HSBC let Dan Simmons' non-identical twin, Joe, access the account via the telephone after he mimicked his brother's voice.

The bank said it would "review" ways to make the ID system more sensitive following the BBC investigation.

HSBC introduced the voice-based security in 2016, saying it measured 100 different characteristics of the human voice to verify a user's identity.

Customers simply give their account details and date of birth and then say: "My voice is my password".

Although the breach did not allow Joe Simmons to withdraw money, he was able to access balances and recent transactions, and was offered the chance to transfer money between accounts.

To add insult to inury, HSBC allowed him seven attempts to mimic his brother's voiceprint and get it wrong, before he got in at the eighth time of trying!

Thursday, May 18, 2017

Wednesday, May 17, 2017

UK Unemployment Lowest In 42 Years

UK unemployment rate has fallen to 4.6%, its lowest in 42 years.

The ONS reports that the number of people unemployed fell by 53,000 to 1.54 million in the three months to March.

Average weekly earnings excluding bonuses increased by 2.1%.

There were 31.95 million people in work, 122,000 more than for October to December 2016 and 381,000 more than for a year earlier.

The employment rate (the proportion of people aged from 16 to 64 who were in work) was 74.8%, the highest since comparable records began in 1971.

So much for Project Fear!

Trump's Solution For A Strong Dollar - Himself!

Tuesday, May 16, 2017

Inflation Hits 2.7% - Easter Blamed

The UK's inflation rate rose last month to its highest since September 2013.

ONS figures show that inflation now stands at 2.7% - up from 2.3% in March - and above the Bank of England's 2% target.

The reason?

Higher air fares were the main reason, which rose because of the later date of Easter this year compared with 2016.

This is not yet a major concern, as the Bank of England are expecting inflation to peak at around 3% this year.

Monday, May 15, 2017

JPMorgan Buys 1,000 Staff Office In Dublin


Reuters reports that JPMorgan Chase has agreed to buy a Dublin building with room for 1,000 staff in the first sign of a financial services firm expanding significantly in Ireland since the government began a major campaign to attract firms in the wake of Brexit.

JPMorgan will acquire a 130,000 square foot (12,000 square meter) building at the Capital Dock development in Dublin's docklands.

"This new building gives us room to grow and some flexibility within the European Union," senior country officer for J.P. Morgan in Ireland Carin Bryans said.

Friday, May 12, 2017

Greek Bailout Deal Delayed Again

Unsurprisingly the much vaunted Greek bailout deal is no nearer fruition.

The IMF is dragging its heels. The Fund’s managing director, Christine Lagarde, said that she expects eurozone lenders to be “far more specific” in their commitment to a debt-relief package for Greece.

Quoted by Keep Talking Greece, she said:
We will carry on working on this debt relief package.

There is not enough clarity yet but I hope that the European partners will continue to progress in that.

We have two issues, policies which are being voted on now, I hope, by the Greek authorities. Much progress has been made and we certainly hope that the Europeans will be far more specific in terms of debt relief, which is also an imperative.” 
In other words, the Quadriga and Greece are still nowhere near a deal.

No surprises there then!

Thursday, May 11, 2017

Buy-To-Let Rates Rise

The Telegraph reports that figures from Mortgage for Business, the specialist broker, show average fixed-rate deals reversed the rate cuts made in March.

The average two-year fixed term loan was 2.9pc in April, up from 2.86pc in March. Three-year deals rose from 3.53pc to 3.56pc, while the average five-year buy-to-let mortgage went from 3.74pc to 3.76pc.

It is the first time buy-to-let rates have increased this year, and the first time three-year fixed mortgages have risen since April 2016.

However, the average tracker mortgage fell, from 4.85pc to 4.74pc in April.

It would appear that mortgage providers are using the increases in buy-to-let rates to offset reductions in rates offered to residential customers.

Monday, May 08, 2017

House Prices Rise 3.8% Year on Year

Despite the fact that house prices (year on year) have increased by 3.8%, the Halifax has released figures that show that house prices are "stagnating" and have actually fallen in the last three months.

As per the BBC in the three months to April, prices fell by 0.2% - the first quarterly fall since November 2012.

However, for the year to April, prices rose by 3.8%, the same figure as in March. The average cost of a house or flat at £219,649.

It seems that the reason for the "stagnation" is the fact that prices (when compared to salaries and mortgages) are hitting the ceiling of affordability.

Friday, May 05, 2017

Greece Failing To Hit Targets




Given the poor performance of Greece wrt meeting targets and forecasts, why are people deluding themselves about the chances of a bailout deal being agreed?

Wednesday, May 03, 2017

Forgery Proof £1 Coin Falls Apart


Oh dear it appears that the new £1 coins, that are allegedly forgery proof, have one small defect.

They fall apart!

It seems that thousands of new £1 coins have been produced with major flaws that have seen the centres fall out. 

Owners of £1 coins with centres missing have been putting them up for sale on eBay, with some reportedly selling for almost £2,500.