by Thomas Oatley

Conventional wisdom holds that banking crises have become ever more frequent during the last thirty years. Here’s some evidence.* I think conventional wisdom was perhaps correct from the vantage point of 2000. Not so obvious that this same conclusion emerges from the vantage point of early 2008. In fact, what is perhaps most stunning is how rare banking crises were during the naughts, at least prior to 2008.

I would also note that of the 90 banking crises that occurred from 1987 to 1998, exactly five involved an advanced industrialized economy (US in 1988, Finland, Norway and Sweden in 1991, Japan in 1998). Thus, 85 of these crises occurred in developing societies, many of which were deeply entrenched in economic reform.

*This time series derived from Luc Laeven and Fabian Valencia, 2010. Read all post…

The move is in sharp contrast to the sloppy practices adopted by most of the industry including Halifax at present which often see savers waiting weeks, and sometimes months, for their tax-free Isa cash to be transferred from one bank or building society to another.

This often leaves them significantly out of pocket due to the interest lost and means their cash is often trapped during the switch (see the Isa Transfers guide).

Halifax estimates transfer delays cost savers 24 million a year. It adds that a quarter of transfers take more than a month.

Instant interest

From Saturday, the Government-backed bank will pay interest when it receives a completed application form in branch or by post, even though it won’t be in receipt of the cash from the existing bank or building society.

If you apply by internet or phone you will still need to sign a form and send it.

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New regulations governing debt settlement and other debt help services are now in effect as the result of consumers complaining about being ripped off by scams that require up-front payment and offer little or no debt help. Highlights of new disclosures that must be made to consumers engaging debt settlement services include:

• Cost: Consumers must be notified up-front of all fees and costs associated with a debt settlement program.
• Time frame: Debt settlement services must advise consumers how long it takes to “see results” from the program being offered. This language leaves room for interpretation, so it’s best to ask prospective debt settlement companies how long it should take to complete the program being offered.
• Impact of debt help programs on consumer credit scores: Debt help services must advise consumers how their programs can affect consumer credit scores. Altho

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Sales remain deeply depressed with 11.6 months of inventory available for purchase and an estimated 1.1 million excess units actively in the market after an uptick in August sales of 7.6 percent.

The median price fell 1.9% in August and units of inventory fell slightly to 3.98 million. The NAR reported 414,000 sales closed, but 28% of those sales were all cash closings. That’s three times the norm, and an obvious sign of distress. One of three sales are officially “distressed” sales. Foreclosures, the highest stress transactions, sell for a discount of approximately 25%.

click to enlarge images

The rate of sales is the second worst on record according to Bloomberg and Marketwatch (but only going back to 1996 according to BNP Paribas). M

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The Tories say that a revaluation would be intrusive and cost families up to 320 a year in local tax hikes.

Yet the first valuation was nearly 20 years ago, a rush job of ‘drive-by’ assessments, and in England & Scotland they’ve not been revalued since. That means 400,000 homes could be in the wrong band.

Martin Lewis, creator of MoneySavingExpert.com, says: “I remember sitting opposite Eric Pickles on TV where he decried Labour for covering up that 400,000 people were in the wrong council tax band. Yet this means those people will remain in the wrong band – still based on valuations done by estate agents driving past homes in 1991. The system is flawed, and was never meant to last this long.”

“Worse still, millions have tried our council tax rebanding system, found their band is too high, but been wrongly told they cant appeal because they moved into the property more than six months before.

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Editor’s note: In ‘s continued absence; today’s DR comes from Greg Canavan, editor of the Sound Money. Sound Investments report (go here for a free trial). This article is from Greg’s most recent report. Mr Canavan, you have the floor…

–We’ve made this point before, but we’ll make it again. Today’s modern financial system depends critically on continued debt growth to stop asset prices from collapsing. In modern economies dominated by governments and their agents, central banks, money is debt and debt is money.

–Grasp this truth and you understand modern financial markets better than 99% of the investment community.

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Credit card debt is a luxury many people take on, only to find that it hurts them financially. Having credit cards can entice you to spend more, make decisions to make purchases easier (i.e. not requiring thought), and allow you to live outside your means – at least until the statement comes or you reach your credit limit. However, you can escape credit card debt (and live a happier life as a result):

1. EMERGENCY FUND: Start by developing an emergency fund; it is simply too easy for your well-laid intentions of never using your credit card again to be brushed aside in the event of an emergency. By building an emergency fund (ideally one equal to six months’ salary), you can be confident that you have the money to handle any of life’s surprises, no matter how big, without resorting to “plastic.” Besides, how nice would it be to know you “have it covered,” regardless what “it” is.

2. FREEZE YOUR CREDI

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You’ve paid off your credit cards, but it doesn’t take too many unplanned expenses to rocket your credit card balances back into the stratosphere. Here are options for getting the damage under control.

Debt management methods: One size doesn’t fit all

• Debt consolidation using home equity financing: Home equity loans have traditionally offered homeowners with enough equity an opportunity to borrow against home equity at lower rates than typically charged for personal loans or credit cards. Current housing markets have eroded home equity for many, but if you can qualify for a home equity loan or line of credit, this can provide funds to pay off multiple balances and consolidate several payments into one home equity loan payment. Borrowing against home equity can be risky; if home values fall, you could lose all of your home equity or owe more on mortgage loans than your home is worth.
• Debt consolidation loans: Consolidating multiple bills into one account with one payment and lower finance charges offers convenience and may help you pay off your debt faster and cheaper. The problem with unsecured debt consolidation loans is that they can be difficult to find unless you have good to excellent credit. Total your credit card balances and ask your bank or credit union about taking out a personal loan for the amount you need. Make sure to compare the annual percentage rates (APR) for your credit card accounts against the APR for an unsecured debt consolidation loan. A debt consolidation loan can help you clean up smaller bills.
• Loans from family or friends: In short: Don’t go there. Borrowing from relatives and friends can cost far more than the APR of your credit card debts. Misunderstandings and unpaid loans have caused many fall outs between families and friends. It’s not worth the risk.
• Vehicle title loans: This is a risky solution to pay down credit card debt; if you can’t make payments, you risk losing your vehicle through repossession.
• Consumer credit counseling and debt consolidation: Certified credit counseling services offer three services. They evaluate your finances and develop a cash based budget, they assess your credit card debt and negotiate affordable repayment terms based on your new budget, and they act as a debt consolidation plan by collecting the amount you agree to pay and distributing it among your creditors. Consumer credit counseling and debt consolidation services typically charge moderate fees for their services, and can generally arrange payment according to your ability to pay.

Knowing how much you owe and which options can work takes time and research, but unburdening yourself from credit card debt is a great investment of your time and effort.