Archive for July, 2009
An independent review of the fee charging debt management sector has been published by the Money Advice Trust which highlights the rapid growth in this sector. According to the review in 1999 there were less than 40 companies who offered a debt management service and there are now over 150 companies in the UK. Money Advice said
“their findings had thrown up a great disparity in the way customers of these debt management companies were treated”
They welcomed a review by the Office of Fair Trading into this sector.
It also showed that many customers were unaware that a free service was also available and that if they had known, they would of rather gone with such service.
It is looking like another hidden tax is going to be introduced on the work force in England. Nottingham City Council are trialing a charge of £250 per parking space in the city centre aimed at commuters, and if successful rolled out to many other cities in England. Now this isn’t so bad if public transport was subsidized, but taking Manchester as an example, the train can cost up to £6 each way to commute. This is just not feasible for the majority of workers and only for the top earners of the city centre companies.
Surely this could lead to companies relocating out of city centre into smaller town business parks, which will do nothing to local economies
On hearing the news about the high amount of shops closures this year was very sad but expected, where this really hurts are in smaller cities and towns, mostly the cities built around manufacture and industry destroyed by the Thatcher reign. As I was originally born and bred in one of these areas I saw firsthand, the local city councils desperately trying to prop up local economies by building new shopping centre’s and investing in retail, but these are the first places where major chains are going to closed down.
More than 12,000 independent shops are of estimated to of closed over the past year resulting in the removal of the heart and soul and more importantly the sense of community in local towns. It is easy to see how a recession can lead to many social problems as well.
I like to see myself as an optimist, and I truly believe that we have seen the worst in the recession and that moving forward we will start to see an upward trend. This is backed by news today from Nationwide, the UK’s largest building society stating that, there is a “reasonable chance” that house prices could end the year higher than they started.
“House prices have been remarkably resilient so far this year, despite a recessionary economic background with sharply rising unemployment,” said Martin Gahbauer, Nationwide’s chief economist.
The government also announced on Monday that hundreds of housing developments which had been put on hold over the last 12 months will be restarted again with a £925m investment to kick start the industry.
Good news for home owners, bad news for first time buyers
The ease of credit and the high spirits of the good years have lead to a record amount of credit card debt said to be totaling over £1billion, the highest of any leading economy, according to the Organization for Economic Co-operation and Development (OECD). The Bank of England is due to release figures in the coming weeks which are predicted to show that lenders have had to write off approximately £1billion of credit card debt between the months of April 09 and June 09. This is the highest since 1993.
This is good news for Debt and IVA companies who charge a fee for helping and overseeing the write off of this debt. These companies can charge up to £6000 for an IVA and about 25% for administrating a debt management plan
The Land Registry has reported a 0.1% rise in house prices in June compared to May which is the first time since January 2008. This is since as more of a flattening of prices rather than a raise. Now this is good news for the economy and house owners but not so good for the first time buyers such as myself.
I know this might seem harsh, but I was hoping that prices would fall a bit more, making it easier for people such as myself to get on the property ladder. The price of a house is still over inflated from the boom years of 2001 – 2007 and with the restrictions on lending and the high deposit that banks are requesting from buyers, people such as myself are still finding it very difficult to get there foot in the door
There has been a lot of good news today regarding turning points in the recession. Story 1 – Banks approving more mortgages. Encouraging signs that lending has started again with 35,235 mortgages approved in June, 15 month high according to the British Bankers Association (BAA), although this has not been reflected in other types of lending such as remortgaging and borrowing. Story 2 – Increases in retail sale in June. The public are starting to spend again with sales up 1.2% in June. This is partly due to the good weather. Story 3 – Home sales in the US rise again. The US market is usually a good prediction to what is going to hit the UK 6 months down the line.
I have been asked this question many times over and each time I explain it, I think to myself, how did he get away with it for so long?
Madoff sold himself as an excellent investor, giving excellent return for clients, which then helped enlist further investors into his securities business. But what Madoff was actually doing was performing a very elaborate Ponzi scheme. This is where clients give an investor a large amount of money to invest for them and each month or year payout a percentage back to the client as their dividend as the investment matures. But this dividend is actually money gained from other clients investments. It is very similar to a pyramid scheme. This works for so long until the money dries up and clients wish to cash in their investments. This is what happened in Madoff’s case. When the credit crunch hit, clients wanted to cash in their investments, leaving the restriction of cash being unavailable to pay the dividend to clients.
It is estimated that the actual net fraud to be $10 – $17 Billion.
In any type of business it is important that the correct people get the correct information in the most concise format that is why it is vital for companies to introduce a Knowledge Processing System (KPS). This will enable strategic information to travel efficiently through the veins of the company without the onset of communication deflection (CD) occurring. CD could lead to unmanaged data being misinterpreted, clouding decision making, as always prevention is better and easier than cure.
The introduction of a good KPS starts at a centralized team sometimes referred to as the bridge team, whose responsibility is to oversee and manage all information to the business, in and out. This should be fully auditable to maintain a level of accountability and also improved security. Once this has been established a monthly review of all incoming and outgoing reports should be performed to streamline the KPS, making sure it doesn’t just become a dead cow left in the field.
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