2008 will be regarded as the year the financial world changed forever.

When your Trumpo started querying the financial ripples back in September 2007, I had no idea that from those little ripples we would find ourselves in the heart of this financial tsunami.

You will have noticed the lack of entries towards the end of 2008, and this is down to the fact that I stated I would only be reporting positive news - hence the lack of entries.

However, for 2009 we are going to tackle the major subjects head on and with our ususal constructive and positive loyal comments from professional advisers, we will continue to keep you all one step ahead.

I started writing the Trumpo blog back in September 2007, mainly as a result of the collapse of Northern Rock and I can’t believe 15 torrid months have gone by and things have snowballed to such a level.

I must admit, I thought we would have some pretty big business failures around the world, but not a “financial world war” that has seen business casualties of such unthinkable proportions. Even your forward thinking Trumpo couldn’t predict the scale of the Banking and Insurance collapses.

I think the biggest shock for me was AIG – American Insurance Group, also known as the largest insurer in the world. AIG have always been “The Daddy” and many of the largest banks in the world advised their well heeled clients to put their money with them as “a safe alternative to bank deposits”. A famous little bank with whom our Queen is famously a client “Coutts” is currently feeling the wrath of one of its affluent and well know clients, Sir Keith Mills. A copy of his open letter published in the Telegraph http://www.couttsaigactiongroup.org/letter.html outlines the major issues.

Such a mammoth worldwide institution (AIG) needing to be bailed out by the US Govt will actually impact on us all. Some of the obvious results are now clear to see on your high street.

The British Mortgage Market collapsing in line with the American Mortgage Market has had a devastating effect on British Banks and Building Socities. HBOS and RBS have basically being nationalised, wiping out 100’s of years of proud high street prominence and heritage that will never be seen again and the smaller mutual building societies only hope for the future is a merger with the largest mutuals either by choice or regulatory intervention.

It needs to be noted that this level of turmoil is not exclusive to Britain and Amercia, most worldwide financial institutions are seeking some form of state aid financial shelter, if not world wide aid at this moment in time. And I expect this to be the case for some years to come.

On a more constructive note.

During the last twelve months Trumpo has been championing rapid cuts in interest rates, and I am relieved to see these now flowing through, albeit later than hoped. I do however feel that If the UK had cut rates in early 08, the situation for savers may not look so bleak and we wouldnt be playing catch up with America.

We have an unfortunate position now in the UK, in that all our personal finances may be turning into a bit of a govt lottery - “Savers and Borrowers come on down”. If you have savings with the countries largest building society Nationwide, they are going to penalise those Nationwide mortgage borrowers on tracker mortgages in favour of the Nationwide savers,  however if you are with the state owned Northern Rock, they will penalise the Northern Rock Savers in favour of the Northern Rock Borrowers. Now call me old fashioned, but if we have nationalisation of the banks due to a banking crisis and govt intervention being in the national interest, surely it should be one rule for all.

Trumpo expects further visits to No 10 Downing Street to sort out this terrible situation from the UK’s top banks and building societies, with Gordon well and truly banging their heads together.

The biggest crisis now facing the world economy is the lack of available credit , both to businesses and equally important the consumers. The national press and TV keep making us aware of the well known retail failures, but what they are not highlighting is that credit is the lifeblood of the UK and US economy and we cant convert the financial make up of our economy overnight, the Tory plan to convert us all to compulisve savers is fantasy land – people cant afford to pay their bills, how the hell can they afford to or even think of saving! All parties, yes working together ideally with Vince Cable in the Chair, should be focussing on the lack of available mortgage and consumer credit as parliaments No 1 priority. If this is not dealt with, Trumpo estimates a further 1 million job losses in the next 6-9 months, and record levels of reposessions that would send the property market into a complete and utter meltdown, it really is that serious.

I will say again that the continual and necessary rate drops are the right course of action and if passed on to borrowers this should ease the pain somewhat. Savers will need to start making their money work for them and seek out those stocks paying steady dividends to offset the reductions in their savings rates from their banks and building societies. There are some good value stocks out their, remember people will always need to eat, keep warm and have a roof over their head.

The strong will come through this and prosper, if you are still in business and reading this then you are one of the strong, keep fighting!

For the number crunchers, a property baron has just sent me his statistics to implement his 2009 strategy!

• New build figures could be as low as 80,000 units, less than 1/3 of government target for new homes
• Homes & Communities Agency (quango) lacking resources needed to help meet government targets for new houses.
• Sales of properties have slowed to fewer than one per week at estate agencies
• A brisk trade reported at auction deals (These figures do not appear in the usual price indicies)
• 75,000 repossessions predicted in 2009
• Neither Halifax or Nationwide have issued their usual predictions for 2009 (probably because they got it so wrong in 2008)
• 2007 net mortgage figures were £108billion, 2008 were just £55billion
• Bank of England Figures indicate homeowners paid off record £5.7billion off their mortgages in 3 months to Sept.
• Mortgages only available to the credit worthy with large deposits of 25%-40%, or those with large amounts of equity.
• Lenders to return to higher loans to value
• Lack of FTB making it almost impossible for market to get moving once bottom is reached.

Forecast change in house prices across UK for 2009

1.       Northwest -10.1%

2.       North -5.9%

3.       London -12.2%

4.       South East -9.6%

5.       South West – 8.4%

6.       Yorkshire -10.5%

7.       East -11.6%

8.       W.Midlands -9.6%

9.       E.Midlands -9.4%

10.      UK Avergage – 11%

AND THE GOOD NEWS, Market expected to begin recovery in 2010 as liquidity returns to market, strength of euro to bring foreign investment, FTB’s take advantage of low prices, investors look to increase protfolio’s

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