The Business News Source

The International Monetary Fund warned that Britain could be heading for a housing market crash and urged Gordon Brown to curb spending growth.

In its latest bi-annual report, the world financial watchdog said UK property prices appeared elevated and "could come under pressure in a rising interest-rate environment".

The International Monetary Fund said that house prices are ‘overvalued by most conventional measures’ - raising the spectre of a damaging slump in the market.

To combat a significant downturn, the IMF warned yesterday that interest rates should be increased from the present 4.75% It said house prices ’still look elevated, and could come under pressure in a rising interest rate environment’.

On the USA it added: "The US housing market could cool more rapidly than expected, triggering a more abrupt slowdown of the US economy."
 The Fund forecast that cooling housing markets would slow the US economy next year from an expected 3.4% this year to just 2.9%.

According to the IMF, the situation in America should lead to a slowdown in the global housing market, but British figures seem to be reporting otherwise.

Meanwhile, a survey within the UK by the Royal Institution of Chartered Surveyors (Rics) reported that 35 per cent more of their members reported a rise than a fall in August, up five points from the previous month. Furthermore, buyer enquiries have risen by their fastest pace since September 2003.




Ian Perry, Rics spokesman, said: "Septembers interest rate freeze will mean that the housing market will maintain its current positive momentum. Would-be buyers have been encouraged by a strong economic performance, but additional rises in interest rates before the end of the year, could deter buyers as more pressure builds on personal finances. Further rises in house prices will prevent entry into the market."


The Business News Source has repeatedly called on the government and the Bank of England in the UK to focus on the impending crisis in the UK housing market.

As we’ve stated before it will be those who have borrowed heavily and bought in the recent year who will be most affected if a crash occurs.

The time for a ‘soft landing’ is unfortunately well past. The best the government can hope is that the decline is stedy and not rapid.

Clearly, Tony Blair won’t want house price crashes to spoil his last few months as Prime Minister, so it’s likely that the government will unwillingly precipitate the crash by not doing the ‘right thing’ now.
 

In Roman Catholic theology, Papal infallibility is the dogma that the Pope is preserved from error when he solemnly promulgates, or declares, to the Church a dogmatic teaching on faith or morals. This doctrine was defined at the First Vatican Council of 1870.

Whilst followers may confuse this with the simple Dogma that the Pope is never wrong, it should certainly be something that the Catholic Church airs and explains more openly after Pope Benedict XVI effectively apologized to Muslim Clerics on Saturday morning.

"The Holy Father is very sorry that some passages of his speech may have sounded offensive to the sensibilities of Muslim believers," Vatican Secretary of State Cardinal Tarcisio Bertone said in a statement.

In Tuesday’s speech the Pope quoted a 14th Century Christian emperor who said the Prophet Muhammad had brought the world only "evil and inhuman" things.

The Pope is known to have strong feelings about the relationship between religion and violence and is unlikely to retract the sentiment of his speech fully – though for the Vatican the statement is effectively a retraction.

One of the issues with religion across the board is that Dogma is effectively a driving force for those worshipping and following a faith, be it Christianity, Judaism, Islam or any other religious belief.

In many religions the worry is that without Dogma the faith
would collapse and control lost.

We call on the Catholic Church to discuss issues of dogma more openly – explaining and reviewing the dogma on a periodic basis. If other faiths followed suit perhaps there would be less conflict in the world.
 

It’s an ill wind that blows no good – goes the old wives tale. Well in the case of El Niño it seems that this, combined with structural improvements in Oil refining and storage may prove a bonus winter for the worlds largest consumer country.

Oil prices fell to a six-month low on Friday on expectations that the USA has built up capacity for enough fuel to see it through the Winter and more than meet capacity needs if any unexpected surges in demand or disruptions to supplies occur.

On the London Oil futures market November ICE Brent fell another Dollar to $62.54 a barrel – a four percent drop on the week. In New York the price of October West Texas Intermediate fell six percent on the week to $62.37.

Analysts are mixed about whether the decrease is a reflection of improvements in storage and infrastructure in the USA, or a seasonal halt in anticipation of the winter season.

The emergence of El Niño in the tropical Pacific may also have had a moderating effect on the hurricane season this year, which has been significantly milder than predicted by meteorologists -though effects next year could be worse.

Last August the USA suffered one of its worst ever hurricanes when Katrina ploughed through the Gulf Coast causing infrastructural damage to many refining facilities - much has now recovered.

The presence of El Niño usually indicates a milder winter in the northern US states. So the call on fuel stores may be less than usual. Of course, predicting the weather makes predicting the stock market look easy, so things can change.

Members of OPEC have indicated they would possibly reduce supplies if prices fall below $60 and are likely to debate this at the next meeting again in December.

Many analysts are predicting that prices could indeed fall below the $60 marker in the next few weeks – US supplies being sufficient to support the fall without any rush to buy at those prices. The next few weeks will test the confidence of the US in its current infrastructural capacity as the prices drop to tempting lows.

Across the board commodities seem to have been unfashionable this week with Gold, Copper, Zinc and Nickel declining as well. At $7,210 a tonne Copper was at a three month low.

Looking at the press reports and comments this morning you could be forgiven for thinking that Apple’s payoff to Creative had a hidden agenda. The new battle ground is hotting up.

Fat with its $100 million cheque from Apple, it seems that Creative is on the attack again – this time though its PR people have launched a full scale assault on one-time-partner, Microsoft.

In what must be the most amazing stroke of luck for Apple, it seems that the non-iPod player market is turning in on itself whilst Apple sits on the sidelines creaming in more sales and more plaudits.

Typical of this PR onslaught is this excerpt below from Information Week

Creative Technology has launched a portable media player that will compete against former partner Microsoft’s Zune.
Creative, based in Milpitas, Calif., released the Zen Vision W video, photo and music player on Thursday, the same day partner-turned-rival Microsoft unveiled details of Zune, which is expected to ship in time for the holiday season.
In announcing the new device, Creative played up its support for Amazon.com and the online retailer’s Unbox movie and video store, which would compete with Microsoft’s Zune online store. Amazon launched Unbox this week.

Creative’s Zen line of portable players run on Microsoft Windows Media, and can play any tune sold with the operating system’s copyright protection technology. Apple Computer uses its own digital rights management code in songs sold on the iTunes store. The tunes are not supported by Windows Media.

The Zen Vision W comes in two models, one with 30GBs of storage, which can carry up to 120 hours of video, and the other 60GBs. The devices cost $300 and $400, respectively. Microsoft has not released pricing for the Zune.

The marketing guys at Apple probably can’t believe their luck. To have two strong competitors fighting each other for ‘second place’ is likely to divide and waste their resources and lessen the impact of any marketing campaigns - splitting and confusing the messages to their target audiences.

Better still neither product is able to touch the newest Apple iPod’s in terms of specification or ‘cool’ appeal.

At the same time Creative has now clearly ‘nailed its mast’ to Amazon, which could spell more trouble for Microsoft when it comes to promoting their product through the Amazon site, with which it competes for downloads.

What seems to be a good idea for Creative in the short term, will probably end up benefiting Apple significantly more in the longer term – Bill Gates must be fuming.