The Great Debate UK
The assault on the Irish bond market by bond investors has continued with a vengeance this week with 10-year bond yields hovering close to nine percent at 8.91 percent. Since August yields have been trending higher, but they accelerated sharply in mid-October, when they were at six percent. At this rate, yields could be in double figures by next week.
Investors are concerned that Ireland will not be able to meet its financial obligations due to the costs associated with bailing out its beleaguered banking sector. The government has estimated that these costs may top 50 billion euro (£42.7 million), however this sum remains a guess and the true bail-out cost is unknown.
Since the Irish debt crisis was precipitated by the bursting of a mega property bubble, the final cost of writing down the bad debt will not be known until there are some stabilization in house prices. As Irish house prices declined seven percent last year and the fall in prices has accelerated in 2010, this could be some way off.
- David Kuo is director of financial website The Motley Fool. The opinions expressed are his own.-
The housing market is probably one of the most keenly followed markets in Britain. Every month we are hit between the eyes with no fewer than eight separate indices that provide pointers to the state of play in the property market. These include supply side figures from Rightmove, demand side numbers from Nationwide and mixed-adjusted indices from the Department of Communities and Local Government.
from The Great Debate:
-- James Saft is a Reuters columnist. The opinions expressed are his own --
When prophetic long time bears turn a bit cuddly, it is usually best to take notice. A real estate maven who rejoices in the "nom-de-blog" of Professor Piggington has now, after five years of correctly shouting bubble, labelled San Diego housing prices "reasonable" based on the latest available housing data.
Remember, San Diego has been, along with Phoenix, Las Vegas and parts of Florida, among the most bubbleicious markets in the U.S., and the massive busts there still represent a huge problem for bank balance sheets, for employment and for the U.S. economy generally.
from UK News:
Our own Reuters poll of 37 analysts at UK banks, published today, predicts that prices are likely to drop by about 11 percent this year and that it will take until 2010 before it gets better.