All about mortgage

Credit crunch: Markets sink as recession in US is confirmed

- 13 hours and 7 minutes ago

divimg alt="" src="http://hits.guardian.co.uk/b/ss/guardiangu-feeds/1/H.15.1/26782?ns=guardianpageName=Business%3A+Markets+sink+as+recession+in+US+is+confirmedch=Businessc3=guardian.co.ukc4=US+economy+%28Business%29%2CBusiness%2CMarket+turmoil%2CGlobal+economy+%28Business%29%2CInterest+rates+%28Business%29c5=Credit+Crunch%2CBusiness+Markets%2CProperty+Mortgages+and+Interest+Rates%2CUS+Economyc6=Dan+Milmoc7=2008_12_01c8=1127207c9=articlec10=GUc11=Businessc12=US+economyc13=c14=h2=GU%2FBusiness%2FUS+economy" width="1" height="1" //divpConfirmation that the US is in recession shook Wall Street tonight and set the Dow Jones industrial average on course to end a five-day winning streak./ppThe Dow fell 445 points to 8384 by the afternoon, a drop of 5%. Shareholders balked at an announcement by the National Bureau of Economic Research that the US economy entered recession in December last year. /ppBen Bernanke, chairman of the Federal Reserve, said today that further interest rate cuts were "feasible" but the scope to bring the key Fed funds rate below its current 1% was "obviously limited". /ppAnswering audience questions after a speech to business leaders in Austin, Texas, Bernanke said more constraints on risk-taking by large financial institutions were needed to ease the problem of banks being "too big to fail". /ppLimiting the risk-taking of institutions to "feasible" levels would mean "we don't privatise the profits and socialise the losses," Bernanke said. "We need a better system for resolving failing institutions," he added. This may include similar mechanisms to deal with problems at companies outside the banking sector./ppThe NBER's business cycle-dating committee gave Bernanke and his colleagues more bad news to digest when rates are discussed on December 15 by announcing that the US was in recession. The committee, which defines recession as "a significant decline in activity spread across the economy" and is considered an official arbiter of the economic cycle, said the downturn began last December as firms started to shed jobs in large numbers./pp"The committee determined the decline in economic activity in 2008 met the standard for a recession," said the privately owned group. President Bush expressed contrition over the downturn yesterday. In an interview with the ABC television network, he said: "I'm sorry it's happening, of course. Obviously I don't like the idea of people losing jobs." He added authorities would intervene if the financial system suffered further difficulties, after the Fed and US treasury bailed out Citigroup and nationalised mortgage lenders Fannie Mae and Freddie Mac. /pp"The American people have got to know that we will safeguard the system," the president said./ppThe Dow fell yesterday morning before the NBER statement, following factory output data for November that showed the weakest activity since 1982. /ppInitial optimism about a strong start to the shopping season also appeared to evaporate as retail stocks were hammered on concerns that heavily discounted sales would hit profits. The SP 500 and Nasdaq indices were off by more than 6%./ppMarket-watchers said the Dow would have struggled to retain recent gains because hedge funds are still dumping assets to pay investors who are withdrawing funds, and to settle bank loans. /pp"I don't know of a single investment strategist who thinks that we are at the beginning of a bull market. It looks like it will be a long recession," said Brian Gendreau, of ING Investment Management in New York./pdiv style="float: left; margin-right: 10px; margin-bottom: 10px;"ullia href="http://www.guardian.co.uk/business/useconomy"US economy/a/lilia href="http://www.guardian.co.uk/business/marketturmoil"Market turmoil/a/lilia href="http://www.guardian.co.uk/business/globaleconomy"Global economy/a/lilia href="http://www.guardian.co.uk/business/interestrates"Interest rates/a/li/ul/diva href="http://www.guardian.co.uk"guardian.co.uk/a copy; Guardian News Media Limited 2008 | Use of this content is subject to our a href="http://users.guardian.co.uk/help/article/0,,933909,00.html"Terms Conditions/a | a href="http://www.guardian.co.uk/webfeeds/1,,1309488,00.html"More Feeds/a pa href="http://feedads.googleadservices.com/~at/r1_Gs_wICuhqUud18l1RR5NriT0/a"img src="http://feedads.googleadservices.com/~at/r1_Gs_wICuhqUud18l1RR5NriT0/i" border="0" ismap="true"/img/a/p

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settles,economy,chairman,mortgages,margins

Leading firms announce more than 2,000 job cuts

Guardian Unlimited

- 14 hours and 17 minutes ago

divimg alt="" src="http://hits.guardian.co.uk/b/ss/guardiangu-feeds/1/H.15.1/15616?ns=guardianpageName=Business%3A+Leading+firms+announce+more+than+2%2C000+job+cutsch=Businessc3=The+Guardianc4=Manufacturing+sector+%28Business%29%2CCredit+crunch+%28Business%29%2CRecession+%28UK%29%2CGlobal+economy+%28Business%29%2CBusinessc5=Credit+Crunch%2CBusiness+Marketsc6=Ashley+Seagerc7=2008_12_01c8=1127128c9=articlec10=GUc11=Businessc12=Manufacturing+sectorc13=c14=h2=GU%2FBusiness%2FManufacturing+sector" width="1" height="1" //divpShares in London suffered another torrid day as leading companies announced more than 2,000 job cuts and figures showed that the country's manufacturing output and orders had fallen to a record low./ppThe FTSE 100 shed 5.2% of its value to close down 223 points at 4,065.5, while oil dipped under $50 and the pound fell back below $1.49 as investors anticipated a deep and prolonged recession in the UK and the possibility of more rate cuts when the Bank of England monetary policy committee meets this week. /ppSimilarly bad data on manufacturing in the US pushed the Dow Jones Industrial Average down by 400 points and a think-tank declared its economy in recession./ppHSBC, Britain's biggest bank, began the jobs cull when it said it would cut more than 500 posts across the country following a review of the business and "current economic conditions". /ppDespite weathering the economic crisis better than many other banks, HSBC will cuts jobs at the London head office, Leeds, Birmingham, Sheffield and Chester. It said no retail customer-facing staff in branches or call centres would be affected. /ppCredit Suisse, the Swiss investment bank, added to the gloom when it announced that it was cutting 650 UK jobs. It has offices in London, Birmingham and Manchester. /ppMeanwhile, Halfords became the latest retailer to suffer from the slowdown on the high street, saying it would cut about 200 posts across its network of more than 450 stores, along with 50 more at its head office in Redditch, Worcestershire. /ppAnd luxury sports car maker Aston Martin said it was planning to axe 600 full-time and temporary jobs because of the downturn in the world economy. The jobs will hit the company's factory at Gaydon in Warwickshire and follows a fall in sales. The Unite union said it was "devastating news" for the workers, especially so close to Christmas. /ppThe latest monthly snapshot of the manufacturing sector from the Chartered Institute of Purchasing and Supply showed the worst activity reading since records were first kept in 1992 and a record low in employment intentions, showing firms are laying off workers in droves. The so-called purchasing managers' index â€” a broad measure of activity, orders and employment in the sector â€” plunged to 34.4 last month, much lower than expected and way below the 50 level that divides expansion from contraction./pp"The scale of the downturn in the UK manufacturing PMI during November is unprecedented," said Rob Dobson, economist at Markit, which compiles the survey./ppThe survey's employment indicator fell at a record pace, spelling further job cuts ahead. Unemployment has been rising all year but the pace of increase has been accelerating and experts expect it to reach two million by Christmas, up from 1.8 million now./ppThere was also a string of bad figures on manufacturing around the world with the eurozone, US and China all showing output on the downturn. The euro zone manufacturing PMI tumbled to a record 35.6, while the Institute of Supply Management in the United States reported its PMI for manufacturing fell to 36.2, the lowest since 1982. /pp"The November US ISM manufacturing survey has continued today's run of awful purchasing managers' index data from around the world," said James Knightley, economist at ING financial markets./ppCompounding the gloom, the respected National Bureau of Economic Research, a group of economists based in Cambridge, Massachusetts, said "the decline in economic activity in 2008 met the standard for a recession"./ppThere was also grim news from China as figures showed its industrial output had slumped because of the world economic downturn, putting paid to the notion that the nation would "decouple" from the world economy and pull ahead by itself./ppThe United Nations said the world economy faced its biggest downturn since the Great Depression of the 1930s. In its Global Outlook report, the UN lowered its forecast for worldwide growth to 1% for 2009, from 2.5% this year and way below the 4%-5% enjoyed for much of this decade. It warned the world economy could contract if economic stimulus packages were not implemented by governments immediately./pp"Most developed economies entered into recession during the second half of 2008, and the economic slowdown has spread to developing countries and the economies in transition," it said./ppThe 13 member eurozone has fallen into recession â€” defined as two quarters of contraction â€” and Britain is almost certainly in one too, its economy having contracted by 0.5% in the third quarter of the year, a number that is likely to double in the fourth quarter according to economists./ppManufacturing bodies over the weekend appealed to the Bank of England's monetary policy committee to make another big interest rate cut at its meeting this week, supplementing the 1.5 percentage point reduction it made last month./ppEconomists said yesterday's figures, including another awful showing for mortgage lending, made a cut in the Bank's key base rate to 2% more likely./ppGeorge Buckley, economist at Deutsche Bank in London, said: "On account of the PMI we have revised our view for this week's decision. We now see a 100bps cut from the MPC on Thursday, taking bank rate down to 2%. As a result, it seems very likely that interest rates will fall below the trough of 1.5% we currently expect."/pdiv style="float: left; margin-right: 10px; margin-bottom: 10px;"ullia href="http://www.guardian.co.uk/business/manufacturing"Manufacturing sector/a/lilia href="http://www.guardian.co.uk/business/creditcrunch"Credit crunch/a/lilia href="http://www.guardian.co.uk/business/recession"Recession/a/lilia href="http://www.guardian.co.uk/business/globaleconomy"Global economy/a/li/ul/diva href="http://www.guardian.co.uk"guardian.co.uk/a copy; Guardian News Media Limited 2008 | Use of this content is subject to our a href="http://users.guardian.co.uk/help/article/0,,933909,00.html"Terms Conditions/a | a href="http://www.guardian.co.uk/webfeeds/1,,1309488,00.html"More Feeds/a pa href="http://feedads.googleadservices.com/~at/fv3iS4CMM9QWrIelvyBAXVBGhD8/a"img src="http://feedads.googleadservices.com/~at/fv3iS4CMM9QWrIelvyBAXVBGhD8/i" border="0" ismap="true"/img/a/p

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Awesome Opportunity - lucrative income!

Ground floor opportunity, awesome income!

Do You Own A Home? Are You In Debt?

Government warned of mortgage meltdown

Mortgage approvals still falling

Towleroad Guide to the Tube #398: Thanksgiving Leftovers

-Daily. Gay. News.- Towleroad: a premium site for modern gay men.

- 1 days ago

BARACK OBAMA: His Thanksgiving YouTube address. Also transcribed, AFTER THE JUMP...

RACHEL MADDOW: What she's thankful for.

MACY'S PARADE RICK-ROLLED: Rick Astley appears at the parade's best moment.

ROSIE LIVE: Clay Aiken arrives for a lame gay joke on what was perhaps the worst television special I've ever witnessed. Others agreed.

Remarks of President-elect Barack Obama
Thursday, November 27th, 2008

Good morning.

Nearly 150 years ago, in one of the darkest years of our nation's history, President Abraham Lincoln set aside the last Thursday in November as a day of Thanksgiving. America was split by Civil War. But Lincoln said in his first Thanksgiving decree that difficult times made it even more appropriate for our blessings to be -- and I quote -- "gratefully acknowledged as with one heart and one voice by the whole American people."

This week, the American people came together with family and friends to carry on this distinctly American tradition. We gave thanks for loved ones and for our lasting pride in our communities and our country. We took comfort in good memories while looking forward to the promise of change.

But this Thanksgiving also takes place at a time of great trial for our people.

Across the country, there were empty seats at the table, as brave Americans continue to serve in harm's way from the mountains of Afghanistan to the deserts of Iraq. We honor and give thanks for their sacrifice, and stand by the families who endure their absence with such dignity and resolve.

At home, we face an economic crisis of historic proportions. More and more Americans are worried about losing a job or making their mortgage payment. Workers are wondering if next month's paycheck will pay next month's bills. Retirees are watching their savings disappear, and students are struggling with the cost of tuition.

It's going to take bold and immediate action to confront this crisis. That's why I'm committed to forging a new beginning from the moment I take office as President of the United States. Earlier this week, I announced my economic team. This talented and dedicated group is already hard at work crafting an Economic Recovery Plan that will create or save 2.5 million new jobs, while making the investments we need to fuel long-term economic growth and stability.

But this Thanksgiving, we are reminded that the renewal of our economy won't come from policies and plans alone -- it will take the hard work, innovation, service, and strength of the American people.

I have seen this strength firsthand over many months -- in workers who are ready to power new industries, and farmers and scientists who can tap new sources of energy; in teachers who stay late after school, and parents who put in that extra hour reading to their kids; in young Americans enlisting in a time of war, seniors who volunteer their time, and service programs that bring hope to the hopeless.

It is a testament to our national character that so many Americans took time out this Thanksgiving to help feed the hungry and care for the needy. On Wednesday, I visited a food bank at Saint Columbanus Parish in Chicago. There -- as in so many communities across America -- folks pitched in time and resources to give a lift to their neighbors in need. It is this spirit that binds us together as one American family -- the belief that we rise and fall as one people; that we want that American Dream not just for ourselves, but for each other.

That's the spirit we must summon as we make a new beginning for our nation. Times are tough. There are difficult months ahead. But we can renew our nation the same way that we have in the many years since Lincoln's first Thanksgiving: by coming together to overcome adversity; by reaching for -- and working for -- new horizons of opportunity for all Americans.

So this weekend -- with one heart, and one voice, the American people can give thanks that a new and brighter day is yet to come.

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Mortgage approvals fall back following slight rise, says the Bank of England

Guardian Unlimited

- 1 days ago

divimg alt="" src="http://hits.guardian.co.uk/b/ss/guardiangu-feeds/1/H.15.1/74066?ns=guardianpageName=Money%3A+Mortgage+approvals+back+at+record+lowch=Moneyc3=guardian.co.ukc4=Mortgages+%28Money%29%2CProperty%2CMoney%2CMortgage+lending+figures+%28Business%29%2CBusiness%2CHousing+market+%28Business%29%2CUK+news%2CBorrowing+and+debt%2CCredit+cards%2CPersonal+loansc5=Personal+Finance%2CCredit+Crunch%2CNot+commercially+useful%2CBusiness+Markets%2CProperty+Mortgages+and+Interest+Ratesc6=Hilary+Osbornec7=2008_12_01c8=1126770c9=articlec10=GUc11=Moneyc12=Mortgagesc13=c14=h2=GU%2FMoney%2FMortgages" width="1" height="1" //divpThe number of a href="http://www.guardian.co.uk/money/mortgages"mortgages/a approved for house purchases fell back to a record low in October, despite a fall in a href="http://www.guardian.co.uk/money/interestrates"interest rates/a at the start of the month, figures showed today./ppLenders approved 32,000 home loans for buyers during the month, the same record low as in August, according to the Bank of England. This a href="http://www.guardian.co.uk/money/2008/oct/29/mortgages-property-borrowing"reverses a slight uplift in September/a when 33,000 mortgages were approved./ppThe value of the loans fell below August's level, however, to £3.9bn, as falling house prices and lending restrictions pushed down the value of each loan./ppMortgage lending for new purchases is running at more than 60% below the level of last October, when 88,000 loans worth a total of £12.2bn were granted to buyers. /ppThe drop follows a year of falls in the a href="http://www.guardian.co.uk/business/housingmarket"housing market/a, which have shaken the confidence of buyers, and a period in which lenders have clamped down on high loan-to-value deals, with many now insisting on deposits of at least 25%./ppOctober's figures also show a slump in the value of loans advanced during the month, following low approval levels in previous months. /ppThe value of net mortgage lending, which takes into account repayments and redemptions, dived by 70% from £1.5bn in September to just £459m, and represented just 6% of the figure for October 2007. br / br /The fall dragged down the total net lending to individuals, offsetting an increase in the value of other borrowing taken on during the month./ppConsumer credit rose to £844m from £345m in September, and made up the majority of the total £1.3bn advanced to borrowers./ppThe increase was driven by a rise in borrowing on a href="http://www.guardian.co.uk/money/creditcards"credit cards/a, which rose from £274m to £398m, and other consumer credit including a href="http://www.guardian.co.uk/money/2007/oct/25/loans.banks"personal loans/a and overdrafts, which increased more than six-fold to £446m./ph2Building societies slump/h2pSeparate figures from the Building Societies Association (BSA) show net lending by its members was down 45% year-on-year in October to £413m, but had improved slightly from September's figure of £314m. /ppGross mortgage lending stood at £3.2bn, a decline of 30% on October last year. /ppThe director general of the BSA, Adrian Coles, said: "With the depressed state of the housing market, it is no surprise that mortgage lending by societies remains low, albeit slightly improved in September.br / br /"With confidence in the market so restrained, homeowners are choosing to stay put rather than move, while a href="http://www.guardian.co.uk/money/firsttimebuyers"first-time buyers/a continue to wait for further falls in prices."/ppHoward Archer, chief UK economist at IHS Global Insight, said the low number of approvals suggested a href="http://www.guardian.co.uk/money/houseprices"house prices/a "still have a long way to fall"./ppHe added: "Ongoing very tight credit conditions, still relatively stretched housing affordability on a number of measures, recession, faster rising unemployment and widespread expectations that house prices are likely to fall a lot further form a powerful set of negative factors weighing down on the housing market."/ppThe BSA also reported a drop in the value of a href="http://www.guardian.co.uk/money/savings"savings/a deposits paid into societies. During October, net receipts added up to just £115m, down from £170m in September and just 3% of last October's figure of £3bn. /ppOctober 2007 was a record breaking month for payments into societies, which was a result of savers looking for a new home for money taken out of Northern Rock, but this year's figure is still below normal./ppColes said: "With the continuing squeeze on household incomes, people have less to save and are possibly choosing to repay existing debt rather than save."/pdiv style="float: left; margin-right: 10px; margin-bottom: 10px;"ullia href="http://www.guardian.co.uk/money/mortgages"Mortgages/a/lilia href="http://www.guardian.co.uk/money/property"Property/a/lilia href="http://www.guardian.co.uk/business/mortgagelendingfigures"Mortgage lending figures/a/lilia href="http://www.guardian.co.uk/business/housingmarket"Housing market/a/lilia href="http://www.guardian.co.uk/money/debt"Borrowing debt/a/lilia href="http://www.guardian.co.uk/money/creditcards"Credit cards/a/lilia href="http://www.guardian.co.uk/money/loans"Personal loans/a/li/ul/diva href="http://www.guardian.co.uk"guardian.co.uk/a copy; Guardian News Media Limited 2008 | Use of this content is subject to our a href="http://users.guardian.co.uk/help/article/0,,933909,00.html"Terms Conditions/a | a href="http://www.guardian.co.uk/webfeeds/1,,1309488,00.html"More Feeds/a pa href="http://feedads.googleadservices.com/~at/SX6rOk5kYBn0q-fqzX1dT5VJseA/a"img src="http://feedads.googleadservices.com/~at/SX6rOk5kYBn0q-fqzX1dT5VJseA/i" border="0" ismap="true"/img/a/p

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house prices,first time buyers,mortgages,margins,purchases

Doris Dungey, Prescient Finance Blogger, Dies at 47 (David Streitfeld/New York Times)

House market to worsen - Absa

Tuition Increases Due to Mortgage Crisis?

Royal Bank of Scotland offers respite on mortgage arrears

Charities lose faith and hope as funding crisis leaves them with £2.3bn black hole

Guardian Unlimited

- 1 days and 10 hours ago

divimg alt="" src="http://hits.guardian.co.uk/b/ss/guardiangu-feeds/1/H.15.1/17804?ns=guardianpageName=Society%3A+Charities+lose+faith+and+hope+as+funding+crisis+leaves+them+with+%26pound%3B2.3bn+black+holech=Societyc3=The+Guardianc4=Voluntary+sector+%28Society%29%2CRecession+%28UK%29%2CCredit+crunch+%28Business%29%2CBusiness%2CMoney%2CSociety%2CUK+newsc5=Society+Weekly%2CPersonal+Finance%2CCredit+Crunch%2CNot+commercially+useful%2CBusiness+Markets%2CSocial+Care+Societyc6=Robert+Booth%2CPatrick+Butlerc7=2008_12_01c8=1126633c9=articlec10=GUc11=Societyc12=Voluntary+sectorc13=c14=h2=GU%2FSociety%2FVoluntary+sector" width="1" height="1" //divpCharities are facing a multi-billion pound black hole in their finances as companies withdraw sponsorship and individuals cancel standing orders as the economic downturn bites, according to an authoritative study published today. /ppA survey of 362 charities by PriceWaterhouseCoopers, the Institute of Fundraising and the Charity Finance Directors' Group reveals that charity incomes are expected to fall in real terms and costs to rise. PwC estimates that the shortfall could reach pound;2.3bn next year as the UK heads towards recession./ppThe forecast is the clearest sign yet of the crisis facing the charitable sector as a result of the credit crunch and has been met with warnings that charity services - often aimed at helping victims of financial hardship - will be curtailed, and some may even collapse./ppThe squeeze has already seen the value of corporate donations tumble. The British Red Cross was forced to cancel its winter gala ball beside the Thames this month as it could not find a corporate sponsor for an event which usually raises pound;500,000. Shelter, the housing charity, lost pound;400,000 in the space of six weeks this autumn when corporate sponsors, including the nationalised mortgage lender Bradford Bingley, cancelled donations./ppCharity chief executives will now press ministers further to release a pound;500m emergency fund to help see them through the slump. "There is no doubt that over the coming year we will see charities fail," said Stephen Bubb, director of the Association of Chief Executives of Voluntary Organisations. "We need help to help the victims of this recession."/ppDemand for services which deal with homelessness and mental illness has grown at the same time as a fifth of charities report increased cancellations of direct debits by individual donors - often a bedrock of income. Of the charities surveyed, 71% said they expected corporate donations to fall or stay static over the next year, and a fifth of those feared they could lose at least 15% of corporate income. Some reported declines of up to 50% already./ppAfter a decade of strong growth in revenues, the value of legacies and wills - which account for a third of the income of UK charities - has also plunged, and the charities' investment income has collapsed in line with the equity markets. According to the survey, the only growth looks set to come from charity shops, as bargain hunters turn to second hand goods. Even that is threatened by a lack of goods to sell, as some would-be donors try to raise extra cash by selling their bric-a-brac online./ppThis afternoon a group of 27 charities which have lost pound;46m in investments in Icelandic banks will lobby a creditors meeting for the release of their frozen assets. Among them are Cats Protection and the children's hospice Naomi House, which together invested pound;16.9m with Kaupthing Singer Friedlander./pp"In all but a technicality the recession is upon us and the economic climate is looking bleak," said Keith Hickey, chief executive of the Charity Finance Directors Group. "The one certainty is that our beneficiaries will need us more than ever. We must respond to this demand by ensuring that our charities are strongly led and able to ensure that we make the maximum possible use of resources."/ppThe crunch has come at a difficult time for Shelter, which offers advice on mortgage problems, homelessness, keeping warm and coping with rent arrears. Banking donors, who account for a third of corporate donations across the sector, pulled the plug on sponsorship deals as a rise in repossessions precipitated a 20% increase in demand for services. It had already laid off 30 staff./pp"If the situation worsens there will be an impact on our services," said Adam Sampson, Shelter's chief executive. "It is the speed with which it has happened which has made it very difficult to adjust. We have to plan for a significant proportion of our loyal donors not being able to afford their five pounds a month standing order payments."/ppDonations from the rich and legacies have slumped, according to the survey. Of charities polled, 86% expected legacies to either decline further or remain static over the coming year./pp"Giving from rich individuals, which had been flagged up as the next big thing, has gone down the pan," Mark Astarita, director of fundraising at British Red Cross, said. "The bulk of the value of legacies is in property and shares, and their value has plummeted. We have predicted a 20% decline next year." That would wipe more than pound;3m off the charity's pound;100m annual income./ppOverall, however, the British Red Cross, believes its income will grow modestly next year, largely from monthly direct debit donations gathered through face-to-face fundraising./pp"It is going to be tough, but it is not all doom and gloom," he said. "We are watching our individual donations closely and there is no detectable change."/ph2Short of funds/h2pWith more than two-thirds of charity bosses believing corporate donations will fall or stay static in the next year, charities which rely on this stream of income will be under pressure./ppThe strongMoney Advice Trust/strong, which provides free advice for individuals struggling with debts, relied on corporate donations for 65% of its pound;7.3m annual income in 2006-07. Five high street banks each gave it more than pound;500,000 in that year, including Royal Bank of Scotland, now nationalised./ppThe strongPrince's Trust/strong depends on the commercial largesse for around a fifth of its pound;22.5m fundraising income./ppstrongBreast Cancer Care/strong depended on corporate donations for 52.6% of its income, strongBreakthrough Breast Cancer/strong, for 16.6% and the strongRoyal Opera House/strong for 16.1%./ppThe crisis-hit UK financial sector accounts for around one third of UK charities' income from corporate donors. Figures from financial information group strongCaritas Data/strong show RBS gave pound;57m in cash and kind last year, Barclays pound;52.4m and HSBC pound;50.7m./pdiv style="float: left; margin-right: 10px; margin-bottom: 10px;"ullia href="http://www.guardian.co.uk/society/voluntarysector"Voluntary sector/a/lilia href="http://www.guardian.co.uk/business/recession"Recession/a/lilia href="http://www.guardian.co.uk/business/creditcrunch"Credit crunch/a/li/ul/diva href="http://www.guardian.co.uk"guardian.co.uk/a copy; Guardian News Media Limited 2008 | Use of this content is subject to our a href="http://users.guardian.co.uk/help/article/0,,933909,00.html"Terms Conditions/a | a href="http://www.guardian.co.uk/webfeeds/1,,1309488,00.html"More Feeds/a pa href="http://feedads.googleadservices.com/~at/926Ypjk1CSQjwUdlv-98U_M_fs4/a"img src="http://feedads.googleadservices.com/~at/926Ypjk1CSQjwUdlv-98U_M_fs4/i" border="0" ismap="true"/img/a/p

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RBS promises mortgage respite

Struggling families given six-month reprieve as RBS delays repossessions

Citigroup to sell Japanese clearing house to raise funds

Struggling families given six-month reprieve as RBS delays repossessions

Heed the visionaries who can ease the pain of recession

Guardian Unlimited

- 2 days and 10 hours ago

divimg alt="" src="http://hits.guardian.co.uk/b/ss/guardiangu-feeds/1/H.15.1/31884?ns=guardianpageName=Comment+is+free%3A+Heed+the+visionaries+who+can+ease+the+pain+of+recessionch=Comment+is+freec3=The+Observerc4=Economics+%28Business%29%2CRecession+%28UK%29%2CCredit+crunch+%28Business%29%2CMarket+turmoil%2CEconomic+policy%2CPolitics%2CBusiness%2CObserverc5=Credit+Crunch%2CBusiness+Markets%2CNot+commercially+usefulc6=Will+Huttonc7=2008_11_30c8=1126411c9=articlec10=GUc11=Comment+is+freec12=blogc13=c14=Comment+is+freeh2=GU%2FComment+is+free%2Fblog%2FComment+is+free" width="1" height="1" //divpThis recession is terrifying because it's assuming the character of an economic black hole. Property prices and economic activity slide, so that soon the problem becomes not the banks refusing to lend but the borrowers' worries. That creates a further downward spiral. The banks become even more cautious. Unless this cycle is broken, the economy is sucked away./ppStandard economics and standard policy responses are useless because gloom creates its own rationality. A herd effect created the bubble. Now a herd effect is creating the opposite. A solution requires finding economics and policies that break the bearish psychology./ppStep forward Robert Shiller, a softly spoken and mildly eccentric Yale professor, who specialises in studying the psychology of booms and busts. Financial markets, left to themselves he says, reliably mismanage risk. They get carried away in booms. And in busts there's a collective hysteria in which all we see is risk, uncertainty and loss. Letting 'financial markets work', as happened in Britain and America from the 1980s to today, has been disastrous. Instead, we need to devise interventions that help the markets manage risk better, which they will not do of their own accord. This, he thinks, is practical Keynesianism. I agree./ppHe was in London last week, promoting his new book The Subprime Solution and between events he met the Chancellor, the Governor of the Bank of England, the Secretary of State for Business and Regulatory Reform and even - for a few minutes - the Prime Minister. One reason for taking him seriously is that he's the only prominent economist who can claim to have predicted today's bust./ppBut his solutions are so non-standard and outside conventional thinking, and his manner so self-deprecating and academic, that it takes a while to get the radicalism of his message. Minds seemed to wander last week - and it took me a good few meetings before I understood./ppIf we are going to get banks to lend and borrowers to borrow, argues Shiller, we have got to reduce decisively the risks they confront. He starts with the mortgage market and the collapse in house prices because they are at the centre of this crisis. /ppMortgages, he thinks, always unfairly contained too much risk for ordinary borrowers. Now they are a disaster. Who in their right mind would pledge hard-earned savings as a deposit for a house in a falling property market and, on top, take responsibility for repaying a big mortgage over 25 years when they may lose their job? It is far too much risk and reflects an unfair balance of power between borrower and lender. A left-of-centre government should insist that mortgages are redesigned so they contain far less risk for ordinary borrowers./ppHis radical 'Shiller' mortgage has two components. The first is that repayments automatically adjust to the economic circumstances of the borrower over the life of the mortgage. Repayments rise in line with your growing income, but fall or stop if you lose your job./ppAt a stroke there are no more repossessions or fear of repossessions. In any case, banks hate repossessions because of the terrible PR and the irrationality of crystallising a loss on their mortgage books. For the borrower, a mortgage becomes less daunting./ppThe second component is that the borrower should be able to insure their down payment - and their housing equity - against loss. Shiller does not stop there. He thinks that the government should launch 'livelihood insurance', so that people can insure themselves against the risk of their wages being reduced. And he advocates a massive boost to the Citizens Advice Bureau network so there is an infrastructure of trusted advisers who can help citizens understand the case for better mortgages and insurance and take up the new financial packages./ppThese measures will help make the world safer for borrowers. The next step is to do the same for lenders./ppI persuaded Robert Shiller to read the Crosby report on the British mortgage market released last week by the Treasury, along with the pre-Budget report. In my view, it is one of the most alarming reports published by the Treasury in my working life./ppJames Crosby, deputy chair of the Financial Services Authority and former chief executive of HBOS, believes that without intervention in 2009, new net mortgage lending in Britain is very likely to fall below zero, spelling calamity for house prices and the wider economy./ppLike Shiller, he thinks that essentially there is too much risk for the market. Every available penny of new savings has already been earmarked, leaving none left over for new mortgages. Lenders are shellshocked. Even if the banks were nationalised, they would face the same problem./ppCrosby has a Shiller-style solution. The government must reduce the risks that are terrifying the mortgage markets. It should offer a pound;100bn guarantee so creating a pound;100bn flow of new credit to home buyers./ppThe Chancellor has promised to do something, but perhaps not this. Shiller, unsurprisingly, wholeheartedly backs Crosby. The two ideas together - Shiller mortgages and Crosby insurance - would break the gloom, take the risk out of the markets and bottom out the recession./ppThese principles could be extended to other areas of lending. The trouble is that it is not just ordinary borrowers who don't understand finance. Neither do many bankers, committed to keeping their power and offering the same old mortgages where the borrower assumes all the risk. Nor do officials, who understand the pros and cons of measures like last week's cut in VAT, but are outside their comfort zone when it comes to banks./ppIt can't go on; the risk of a deep recession is too great. We need the state to take the risks out of finance./pdiv style="float: left; margin-right: 10px; margin-bottom: 10px;"ullia href="http://www.guardian.co.uk/business/economics"Economics/a/lilia href="http://www.guardian.co.uk/business/recession"Recession/a/lilia href="http://www.guardian.co.uk/business/creditcrunch"Credit crunch/a/lilia href="http://www.guardian.co.uk/business/marketturmoil"Market turmoil/a/lilia href="http://www.guardian.co.uk/politics/economy"Economic policy/a/li/ul/diva href="http://www.guardian.co.uk"guardian.co.uk/a copy; Guardian News Media Limited 2008 | Use of this content is subject to our a href="http://users.guardian.co.uk/help/article/0,,933909,00.html"Terms Conditions/a | a href="http://www.guardian.co.uk/webfeeds/1,,1309488,00.html"More Feeds/a pa href="http://feedads.googleadservices.com/~at/ajVoUO1XoFUP5VvGMgBBMWIGPgU/a"img src="http://feedads.googleadservices.com/~at/ajVoUO1XoFUP5VvGMgBBMWIGPgU/i" border="0" ismap="true"/img/a/p

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