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Kenya finally feel Credit Crunch World

Can you believe the term credit crunch has entered the dictionary now?

Often defined as "a severe shortage of money or credit" Are you kidding, Kenyans, Africans have not suffered from this principle of crisis for years even decades. So the West is taking his medicine, finally, and over time. The beginning of all this has been considered August 9, 2007. Investment bank French BNP Paribas caused shock around the world causing a sharp increase in the cost of credit. In short the whole problem is all about buying and selling irresponsible Credit, transfer of bad debt until there was nobody left to buy it.

……………….. But the story begins in the U.S. market High risk capitalism at its worst when nobody was denied credit to buy their own home. People who could barely pay the ugali on the table, are proud owners home for the first time, that was fine while interest rates were low. But interest rates rose from 1% to 5.35% (2004-2006), causing a slowdown in the U.S. housing market as mortgage defaults soared. High risk loans to customers with little or no credit histories rose to levels unprecedented. U.S. caused this global crisis, but cleverly packaged and sold to banks and investors to hide the problem any longer. Many argue the signals warning may have been interrupted in April 2007 when New Century Financial, the specialist in high-risk mortgages, requested bankruptcy protection Chapter 11 and cuts its work force in half. As has been sold in many of the bad debts to banks, the collapse of the subprime mortgage market risk to be unstoppable, with ripple impact on banks around the world. Poor performance of hedge funds to bring investment bank Bear Stearns to its knees by forcing them to tell investors July 2007 that they will get little, if any, of the money invested. Ben Bernanke of the Fed's estimate of the crisis could cost up to U.S. $ 100 billion. Could not be more wrong. In the August 9, 2007 raises the scale of the crisis, BNP Paribas can not value the assets of two of its funds due to evaporation "total liquidity on the market. It is the clearest sign that banks refuse to do business with each other.

The global fight back sees 95 billion euros that the Central Bank Europe, in an attempt to improve liquidity, adding more days later 108.7bn. The Bank of Canada, the Bank of Japan and the U.S. Federal Reserve also begin to intervene. For the first time talk of credit crunch risk to the forces of U.S. economic growth Fed cut the rate at which banks lend to half of a percentage point to 5.75%. Do these types seem less Kenyans? Why access to credit been so affordable and cheap to the west, while we pay a high price for financial aid? Could this reluctance of banks to take these risks actually protected us in the long term. Banks charge properly here in Kenya for services rendered unlike the West, where charges apply only if you really need a loan or misuse of your accounts.

Rumors that banks either worry whether other banks will survive, or urgently need the money themselves in the press in the UK. In the September 13 Northern Rock 2007 granted emergency financial assistance from the Bank of England. Northern Rock was based on markets rather than savers' deposits to finance loans mortgage. Poor liquidity and the onset of the credit crunch dried up funding. The day after depositors withdraw £ 1bn in what was the highest run in a bank for over a century. Run continues until the British Government's measures to guarantee the savings. The pressure on the Government of the United Kingdom was immense because unlike the U.S. Fed that was happy just print more dollars, the UK Government wanted to ensure that good money does not follow the bad investments. The pressure on the Bank of England reaches melting point and the September 19, 2007 finally injected 10 billion pounds in the markets. A period of concern followed by the major banks and investment houses losses startling revelation, almost a contest to declare the extent possible, before the patience of Public dried. The Swiss bank UBS, Citigroup, Merrill Lynch joined the group at risk and all related investments blamed subprime mortgages. On December 5 major central banks around the world billions of dollars in supply of loans to banks by injecting money into the system, but who benefits and where is he going? The banks are still shy more than lend to each other.

2008 heralds a new beginning and a new beginning, that we are fooling the problem remains in the immediate future as insurers that guarantee to repay the loans if the issuer goes bankrupt feel the heat. agency Standard and Poor's rating downgrade its investment rating of bonds hitting ensuring the liquidity of banks. So far, the richest nations that seem to be suffering more than anyone the dependence of those living in the local credit punt. Kenyans are still on the sideline, watching and waiting involved in their own political problems at home, without worrying about the West's past indulgences. Talk of recession global stock markets, including Britain's FTSE 100 Index suffered its biggest declines since September 11, 2001. U.S. Losses high risk continue to grow as a major bond insurer MBIA announces $ 2.3bn credit losses uncollectible. Prices are a cut over the world. 17th February decision on the future of Northern Rock is known, nationalization Virgin group favored over the rescue plan. A month after Wall Street's fifth largest bank, Bear Stearns, bought by JP Morgan Chase for $ 240 million at the time considered to be a real bargain as a year earlier, Bear Stearns was worth £ 18 billion.

In March 2008 the housing market in the UK and national level predicts stagnant prices UK will fall later this year. Mortgage lending had become a highly competitive industry, with tens of thousands of products on the market. 100% mortgage is a history as an astounding 20% of products withdrawn in just seven days. There are similarities with the Kenyan financial sector as very few institutions offer mortgages with such depth of choice and risk, with coverage of prudent lending market with its existing customer base. Kenyans can shop around, but your credit history is more difficult to transfer a secret financial environment now exists in Kenya. Long term relationships with financial institutions favored the style of Western-style supermarkets and credit transfer switches. The word "race" is often used as a low offer rates generally only last six months forcing the client to look again. The scale of the credit crisis was beginning to unravel as the International Monetary Fund (IMF) on April 8, says $ 1 trillion could be lost by the credit crunch in the assets of other sectors are exposed, such as commercial property, consumer credit, and the company debt.

Are risky mortgage debts for secure government bonds left a bad taste in the mouths of many people like the matter to help comes from or why not simply dropped the subject of almost every conversation. Royal Bank of Scotland announced the largest profit and loss for a bank yet British. Towards the end of April prices, housing rates UK annual record first drop in home for 12 years by Nationwide. The prices were a% lower in April compared with the previous year, figures confirmed by Halifax in the UK, the biggest lender, days later.

Barclay's £ Plans 4.5bn share issue to strengthen its balance sheet, briefly falling FTSE 100, shares in a bear market, in which the market suffers a decline of 20% from its recent highs. At the same time Kenya markets falling at an alarming rate as investors look for safe places to keep your money. The real estate market remains very strong in Kenya, as all the factors explained above have no real similarities here at home. Banks have borrowed responsibly and many Kenyans opt to buy land and build slowly over time. In western developers to build large estates and is home and it feels like everyone else around him. Here Kenya developers are following this trend but only recently, say in the last five years. At first the houses and apartments that were developed immediately bought even sold the plans. Kenya's copy cat approach to business in that country and the market is saturated with high-rise apartments and town houses flattened class in affluent parts of Nairobi and Mombasa. But still not experiencing a fall in prices over a slowdown as a clock and wait for the political sector consumes.

More rescues U.S. in July 2008 and financial authorities to intervene to help the two largest U.S. lenders U.S., Fannie Mae and Freddie Mac As owners or guarantors of $ 5 billion of mortgage loans that are crucial for the U.S. housing market and authorities are of agreement could not be allowed to fail. The previous week there had been a panic among investors that could collapse, causing its share price fall sharply. The realization set in the minds of many that for now the stock markets were very unpredictable and heavy losses may still be around the corner. Talking about the lower end could be and speculation continues to dampen investment. Only 8% of HBOS investors agree to take the new shares offered in its issue of £ 4 billion rights because they are more expensive than existing shares are trading in the stock market. HBOS Still Gets the 4 billion £ I wanted, as the unsold new shares are purchased by the underwriters of the issue.

More bad news as the country, reveals that UK house prices have fallen 10.5% in one year. August 2008 sees a series of negative news from around the world as the FTSE notch to its biggest weekly drop since July 2002. U.S. Labour market figures, which showed the unemployment rate increased to 6.1%, were a shock to most investors have had to swallow a lot of poor economic data in recent days. September But things go from bad to worse, especially in the U.S. September 7 where mortgage lenders Fannie Mae and Freddie Mac – which account for nearly half the outstanding mortgages in the U.S. – Are rescued by the U.S. government in one of the largest rescue operations in U.S. history. Wall Street bank Lehman Brothers published a loss of $ 3.9bn in the three months to August and the search for a buyer, before filing for bankruptcy protection Chapter 11, becoming the first major bank to collapse since the start of the credit crisis. U.S. Federal Reserve announces a rescue package of $ 85 billion to AIG, the country's largest insurance company, to save it from bankruptcy. AIG gets the loan in exchange for a 80% share in the company. In a flurry of mergers and acquisitions announced that Lloyds TSB is to take over Britain's biggest mortgage lender HBOS in a deal of £ 12 billion to create a giant bank holding about a third of UK savings and mortgage market. The deal follows a run on HBOS shares. In the largest bank failure yet in the United States, Washington Mutual, the giant mortgage lender which had assets of $ 307bn, is closed by regulators and sold to JPMorgan Chase. The Financial crisis hits European banking sector as the European banking and insurance giant Fortis partially nationalized is to ensure their survival.

Nationalization has returned to the headlines as Congress allows the Treasury to spend up to $ 700 billion buying bad debts from troubled banks. In Britain, mortgage lender Bradford & Bingley is nationalized. The British Government takes control of £ 50 billion bank and mortgage loans, while its savings operations and branches were sold to Santander of Spain. The Icelandic government takes control of third largest bank, Glitnir, after the company is facing financing short-term problems. Wachovia, the U.S. bank the fourth largest, was acquired by rival Citigroup in a rescue operation supported by the U.S. authorities. Under the agreement, Citigroup will absorb up to $ 42bn of Wachovia losses. Dexia becomes the latest European bank to be rescued as the credit crisis continues to shake the banking sector. After of all-night talks, the Belgian, French and Luxembourg say they will put in 6.4bn euros (U.S. $ 9 billion, £ 5 billion) to keep afloat.

October 2008 to see a global struggle ever witnessed back several generations. They are pumping money into global markets and not let any fall in other houses financial. The underlying fear is that the entire financial system could collapse and fall if the intervention does not happen quickly. The U.S. House of Representatives approves $ 700 billion (£ 394bn) government plan to rescue the U.S. financial sector. Germany announced a 50 billion euro ($ 68bn, £ 38.7bn) plan to save one of the largest banks in the country. The British Government announces details of a rescue package for the banking system worth at least £ 50 billion ($ 88bn). The U.S. Federal Reserve, European Central Bank (ECB), Bank of England and central banks of Canada, Sweden and Switzerland make emergency interest rate cuts half a percentage point. The Fed cut its base interest rate to 1.5%, the ECB at 3.75% and the Bank of England to 4.5%. Finance ministers of the main actions commit industrialized nations to tackle the financial crisis. The G7 nations issue a five-point plan of "decisive action" to unfreeze credit markets, after a meeting in Washington. The British government announces plans to pump billions of pounds of taxpayers' money into three banks the United Kingdom on one of the UK's largest nationalizations. Royal Bank of Scotland (RBS), Lloyds TSB and HBOS will have a total of £ 37 billion injected into them. The U.S. government today announced a $ 250 billion (£ 143bn) plan to buy stakes in a wide variety of banks in an effort to restore confidence in the sector. The fight continues until around November 2008, the International Monetary Fund (IMF) approved a loan of U.S. $ 16.4bn to Ukraine to strengthen its economy, shaken by global financial turmoil. China provides a package of two-year $ 586bn economic stimulus package to help stimulate the economy through investment in infrastructure and social projects, and by reducing corporate taxes. Countries are beginning to look inward for answers and the U.S. decided to concentrate to improve the flow of credit to U.S. consumers. Promises In addition to the injection of cash to encourage banks to lend, only helps to stay up instead of paying. Because the U.S. and the world will enter the official announcement of job losses Recession become the regular topic of conversation as automobile manufacturers feel the heat. President George W Bush says the U.S. government use up to $ 17.4bn from $ 700 billion to the banking sector aimed to help the Big Three U.S. automobile, General Motors, Ford and Chrysler.

A new beginning for all of us as U.S. President-elect Barack Obama described the U.S. economy Together as very ill and that the worsening of the situation. I hope that rapid changes in policy and common sense can lead U.S. efforts to help a economic recovery. But official figures show U.S. The unemployment rate rose to 7.2% in December, the highest in 16 years. The figures also indicate most U.S. workers lost their jobs in 2008 than in any other year since the Second World War. China's exports recorded their biggest drop in a decade. The Irish Government says it is the nationalization of the Anglo Irish Bank after it decided to inject money into the lender was not enough to secure its future. As the Government's promise of money increases the understanding that future generations will pay in taxes for greed and wasteful spending in this generation. Smart People have made millions of dollars dealing with this uncertainty in large organizations are stripped of their wealth and assets. President Obama promised that his economic recovery package will be at the center of his administration. Obama says 80% of expenditure is carried out in 18 months. The concept of devoting his way out of recession is very worrying. At home in Kenya money has more power, a natural effect of what is happening abroad and less money is sent back to their friends and families. A positive effect is experienced Kenyan brothers and sisters are finally coming home after long pursuit of the Western dream of wealth and happiness. Part ironic is ultimately the people of Kenya who have less in comparison with others, but they seem to smile and enjoy life all the more. Economic growth worldwide will drop to only 0.5% this year, its lowest rate since World War II, warned the International Monetary Fund (IMF), but what it will mean for Kenya? The International Labour Organization said that as many as 51 million jobs worldwide may be lost this year due to global economic crisis. The environmental factors due to the lack of rain seem to be taking a more immediate impact daily life in Kenya. energy shortages as water levels that facilitate prey shutdown systems companies also effect. Failing crops, famine and starvation means that the Government of Kenya must look inward on problems Kenyans themselves. We are proud to be Kenyan and wants to contribute on the world stage, but this economic crisis is not being done. The so-called developed world, U.S., particular, living on credit just too long and eventually had to pay the price. PropertyLeo lets you make your own mind on this issue, but concludes that the credit crunch is eventually felt here in Kenya. We hope to have raised a debate among his colleagues and friends and feel free to express an opinion through the normal contact us channel. Remember that Real Estate is your home, not just an investment and contributes significantly to their lives and welfare. The fact that no Kenyan real estate sector has an accident does not mean no, but could just as easily continue to grow, but more likely to remain flat with fewer transactions. Visit www.propertyleo.com for many more thought provoking articles.

August 23, 2009

Aaron Diaz

About the Author

Aaron Dixon I am the owner of www.propertyleo.com
This is my first website project and it has shoked me the amount of effort required for a successful SEO campaign. The site is full of indepentent Kenyan Real Estate content and I welcome any feedback, info@propertyleo.com