May 26, 2006 | posted by Michael Baxter in Uncategorized | comments (0) |

The adjoining sea is black in name, but the investment potential and leisure escape that Bulgaria represents is pure gold - Lance Nelson tells us more

With yields on bonds still at an incredibly low level, investors are increasingly looking elsewhere for a home for their money. Yet the obvious alternative, property, has its disadvantages. Even the most optimistic reports on the UK housing market are predicting lacklustre movements in price over the next few years. The good news is that Capital Gains tax on recent property investments will probably be lower for the next few years; the bad news, that’s because capital gains are likely to be miniscule.

Given the high value of properties in the UK, what does the would-be property investor do? Many would argue the answer lies in investing in property abroad.
Not in the traditional locations; many fear Spain too is sitting on a property price bubble; the obvious alternative locations are the burgeoning economies of Eastern Europe. And for a whole host of reasons, Bulgaria is currently seen by many as top of the pile.

First there’s value for money. Then there’s the natural beauty of the country. Combining winter skiing with summer sun, Bulgaria really does seem to offer the best of both worlds - or is that the best of three worlds: value for money, sun and snow?

A candidate for the 2014 Winter Olympics, and set to join the EU next year, the country is joining the rest of the world with aplomb.

The savvy investor has already spotted the trend. 2004 saw typical property prices rising by 47.6%, and last year they were up by a more sedate, but still mouth watering 21.6%.

Experts say 2006 won’t see quite such a big jump in prices, but even in this year, the calm as it were before the EU membership growth engendering storm, property specialists in International Property Investment have judged Bulgaria as the best overseas investment market.

Bulgaria is often seen as challanging Cyprus to occupy its lofty position. But then with the average new two-bedroom apartment in Bulgaria now costing about £60,000 and with yields of around 12% per annum, perhaps that’s not surprising.

Did we say Bulgaria offers the best of all three worlds? Actually there’s a fourth benefit.

Many investors like the idea of having a second home in the country. Their investment property is also their holiday retreat.

According to foreign currency specialist, HIFX, France and Spain are still number one for buying property abroad - taking up 43% of the overall market between them. Australia was in third place with 11%, and then sits good old Bulgaria with 10%.

According to Svetla Kostadinova, a senior Bulgarian economist at the Institute for Market Economics: ” The economic environment in the country improved significantly in the past five years - we have one of the lowest corporate rates in Europe, inflation is lower, incomes are rising constantly, predictability has improved, economic freedom increased and overall people’s expectations are positive.”

But, of course, investing overseas carries risks. In some regions money has poured in, but planning has not been so good. But the Bulgarian government is learning. With help from a specialist, there are bargains to be had, both in the capital, Sofia, and in the unspoilt mountain and coastal areas for your investment and leisure time.

Lance Nelson is the Director of Bulgarian property experts, Jet2Let Ltd. Tel: 0870 428 3567 or www.jet2letproperty.com for more info jet2let

May 26, 2006 | posted by Michael Baxter in Uncategorized | comments (0) |

Perhaps Kenneth Lay came across as too
much the alpha male. And Jeffrey Skilling too much as someone playing a
game.

As you have no doubt heard, the Enron duo were found guilty
yesterday. And Lay had the ignominy of being found guilty by two
different courts on two separate sets of charges. Maybe Lay’s problem
was his attitude in court. As one juror said: “He seemed very much
wanting to be in control#133;He seemed to have very much of a chip on his
shoulder… it made me question his character.” If a man projects the
persona of being top dog, of being in control, it’s difficult to believe he had
no idea of the wrong doing being carried out in the company beneath
him.
You may recall the Worldcom trial, when former boss Bernie Ebbers,
who also came across as something of a man who liked to be in control,
played the “I am a simple man - I used to work as a milkman, and don’t
know much about maths - card”. No one believed Ebbers, and it would
appear the jury formed a similar view about Lay.
And what of the other Lay trial? He was found guilty of borrowing
money and using most of it to invest in shares, something that is not
allowed under US law. This time, Lay’s excuse was simply that he was “far
to busy to worry about details like that”. Again, this ignorance of what is
going on excuse did not wash because he was presented as man in
control.
As for Skilling, who, like Lay, is likely to spend the rest of life in
prison, he told press: “Obviously I’m disappointed, but that’s the way the
system works.” And the Americans say the Brits understate things#33;

Sources
Lay and Skilling’s day of reckoning CNNMoney

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May 26, 2006 | posted by Michael Baxter in Uncategorized | comments (0) |

Yahoo and eBay are clubbing together
to take on the world. And, while Microsoft looks over its shoulder,
wondering how adverting funded products threaten its business model,
Google must be looking over its shoulder wondering how this latest
partnership will threaten its ambitious plans.

The Yahoo eBay deal will mean Yahoo ads on the eBay site, and
Paypal on Yahoo. And it will bring together the world’s leading portal with
the world’s leading e-commerce site in an alliance that, perhaps, poses
the biggest threat yet to what had been looking like a long road inevitably
leading to Google hegemony.

At face value, it looks like a potential backward step for eBay. After
all, the last thing the company wants is to advertise products that are in
competition with products its clients are trying to sell. But the deal tie up
will be more sophisticated than that. For example, an eBay auction for
shoes would have ads for complementary products, such as socks.

Perhaps, however, the ultimate money spinner could lie with Skype.
The problem with Skype is that the more successful it is, the less money it
will make. Phone calls between Skype users are free. So if the world
adopts Skype, where will the money come from? The Yahoo tie up could
solve this problem.

Yahoo, eBay
join forces in defense against Google San Francisco Chronicle

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May 26, 2006 | posted by Michael Baxter in Uncategorized | comments (0) |

If BT is serious about becoming a major challenger in the
brave new world of free broadband, but premium content, some say it will have to do
better than this. Starting the season after next, BT has agreed a deal to broadcast nearly
live football over its BT Vision service for three years. But with the service only being
applied to games not shown live- ie the ones people are less interested in, is it a case of
too little, and, considering the games aren’t shown until after 10pm, a lot too
late?

Alternatively, maybe BT is being clever, the Internet is, after all, about choice and
catering for niche interests, and perhaps the fans of middle of the table premiership clubs
are alienated by the level of focus on the big games. BT has enabled itself to tap into this
market, and on the cheap.

The deal for nearly live football broadcasting was actually awarded to both BT and
BSkyB, who, between them, forked out £84.3 million. The deal kicks off at the start of
the 2007/08 season. Games will be shown on BSkyB and over the BT Vision service,
which is due to be launched later this year.

But BT is facing ever stiffer competition. Sure, it recently announced a good set of
results, but now Wanadoo has joined Carphone Warehouse in offering free broadband in
combination with cheap fixed line calls, and with VoIP representing an ever-growing
threat to the company’s traditional business model, BT has to be bold, or failing that, very
clever.

BSkyB and Setanta paid £1.7 billion to broadcast live games. For the TV broadcaster,
premiership football coverage has been a Trojan horse, no doubt pulling customers in by
the millions.

But by not showing live games, has BT settled for second best? Is it a half-hearted
gesture? TV broadcasting is for big boys, serious about their intent. BT Vision is a brave
move, but is the fact that BT has been left with the leftovers in football coverage a sign of
a company that’s been brave, but not nearly brave enough?

The company made a profit of £629 million in the last quarter, and when your long-
term business model is under threat, does it not make sense to re-invest most of this
money into protecting the future?

On the other hand, Internet broadcasting is likely to bring in more transient benefits
for the big players. When customers sign up to BSkyB, they often stay there for good.
The churn rate is not too bad. But the psychology is different for the ‘net’. Forking out
hundreds of millions of pounds on offering services as a way to lock in customers for the
future might have worked for BSkyB, but for the Internet, which is the fastest changing
business the world has ever seen, this is a far more risky strategy.

The nearly live broadcasting deal applies to 242 games. The deal might not apply to
the big games, but there are plenty of fans out there who want to watch their team. And
the Internet is perhaps less about live coverage anyway; it’s about the user choosing the
time they view. So broadcasting after 10pm might not be such a bad thing#33;

May 26, 2006 | posted by Michael Baxter in Uncategorized | comments (0) |

style=”color:#35;666666;”gt;Perhaps the computer desktop is the most valuable piece of real
estate in the world. - or at least it will be. As Internet advertising and shopping continues
to eat up market share, the computer desktop could ultimately become your prime TV
channel, High Street, and window onto the world. And how do you dominate this private
space? One way is to supply software and charge for it, another is to supply software
free and make money from advertising. Yesterday, Dell - the world’s largest computer
manufacturer - seemed to nail its colours firmly to the advertising masts, when it agreed
a deal to install Google’s search engine software on the machines it ships.

The Google Dell deal, will mean Dell computers will be supplied with factory installed
Google software, including Google Desk Top, and the Internet Home page will be pre-
configured to a Google search page, co-branded with Dell.

Goggle Desk Top includes a host of features, including the ability to search your
computer, add-ons such as a calendar, news feeds, share price feeds, the ability to spell
check online forms, and a scratch pad for you to make notes as you browse.

In the US, a weather gadget is also available, providing three day forecasts based
on post code.

It’s understood that Dell will share advertising and affiliate revenue generated with
Google.

As the PC becomes the centre for shopping and TV viewing, we believe that
hardware companies will find this type of deal increasingly attractive. By tying
themselves up with a supplier of powerful search tools, hardware companies have the
opportunity to generate revenue ad infinitum from each unit they sell. Take this approach
to its inevitable conclusion, and the day of free PCs, which are hard coded with software
for searching TV and Internet shopping applications, will be upon us.

And Microsoft’s strategy of charging money for its software, looks decidedly old
hat.

Sources

About Google desktop Google
About Google Toolbar Google

About Google pack
Google

Dude, you’re getting
Google on your Dell arts technica

Dell to offer Google software on PCs FT

May 25, 2006 | posted by Michael Baxter in Uncategorized | comments (0) |

Money’s cheap. Does that means investors are being
silly? With the rate of interest in Japan still at zero, credit has never been cheaper.
And perhaps that’s the problem, or so Anthony Bolton, head of the Fidelity Special
Situations Fund and city guru, speculated.

Speaking at a press conference yesterday, he suggested that the recent run on the
markets is no flash in the pan, rather a sign of an end to the bull market. He said: “I
think it could be the end of the bull market - therefore the correction will take
months rather than days.”

“We could see a series of small corrections and recoveries over the long term or
we could see a sharper drop,” he said. “However, the quicker the downturn, the
smaller the consolidation will be.”
Why is all this happening? According to Mr Bolton: “‘Investors are prepared to
take more risks and that’s always a warning sign. Then you have factors, such as the
situation in the Middle East and bird flu, which could have an affect on the
markets#133;When money is virtually free, that’s when people do silly things.’
.

May 25, 2006 | posted by Michael Baxter in Uncategorized | comments (0) |

The latest profit announcements from Scottish Power
caused much rancour. Annual pre tax profits have surged, hitting £675 million, 49
per cent up on last year. The UK’s fifth largest energy provider has upped gas prices
to customers by 15 per cent so far this year, while electricity prices have been
increased by 8 per cent.

The press and pressure groups didn’t like it. The consumer body Energywatch
described the Scottish Power price hikes as an “assault on the budgets of Britain’s
poorest households”. In the meantime, a statement on the simplyswitch.com web site
said: “If Scottish Power does increase their prices again, it may be too much for their
loyal customer base. Customers will realise that there is no prize for loyalty, and vote
with their feet, as we have seen with British Gas.”

But there is another side to the tale. Scottish Power’s chief executive Philip
Bowman put it like this: the residential energy business lost money, and the profit
making parts of the business should not subsidise prices. He explained that the
company plans to invest £4.8 billion between now and 2010. Much of this money
will be spent on measures designed to help the environment, for example on more
wind farms.

The truth is, of course, that energy prices are going up at present. If more energy
is produced without causing horrific damage to the environment, presumably
something else must give. Everything has a price. And energy that causes less
pollution will cost us. That’s simple economics. You can’t have your environmentally
friendly cake, and eat lots of cheap energy cakes too.

May 25, 2006 | posted by Michael Baxter in Uncategorized | comments (0) |

Those Anglo Saxons. They spend, they
borrow and they get into debt. It’s not just the individuals either; both the
US and the UK as a whole suffer from massive balance of trade deficits, as
the two nations import more than they export, and run up debts to the rest
of the world to fund it. That means consumers are leading our economic
growth and, unless spending is matched by corresponding increases in
production, sooner or later it will end in tears.

Perhaps the twin pillars of discontent, amongst economists interested in
the UK, are manufacturing and investment. Actually, that’s not true,
economists seem discontented about everything - it’s just that gripes about
manufacturing and investment seem to top the list. At last, we have some
good news about both.
According to the CBI: “For the first time since February 1996 as many
firms said export orders were above normal as below, driven by renewed
demand for capital goods such as industrial engines and aerospace
equipment.”
Each month the CBI asks its members a series of yes no questions. For
example: “Are order books up on last year? Are exports up on last year?”
The balance forms the CBI industrial trends indexes.
The main index - the order book index - is still negative. It has been
below zero now for 22 months. But, it is getting better. The CBI said: ” 22
per cent of manufacturers reported total orders were above normal
compared to 34 per cent who said they were below normal, producing a
balance of minus 12. Although negative, this maintains the slowly improving
trend seen since the turn of the year and is comparable to April’s balance (-
11), which was the strongest since February 2005 (-10).”
CBI Chief Economic Adviser Ian McCafferty said: “The outlook for UK
manufacturing is more encouraging than it has been for some time on the
back of the stronger performance of eurozone economies and continued
growth in the US. However, while the signs are encouraging, the pick-up in
domestic demand of earlier in the year has not been sustained and there is
still little sign of an increasing appetite for British-made consumer goods.
Until this happens the recovery will remain fragile.”
Unfortunately, the good news about investment was not quite so clear
cut. According to the Office of National Statistics, investment in the first
quarter of 2006 is provisionally estimated to be 2.8 per cent higher than the
same period last year, and 1.7 per cent higher than the previous quarter.
But commentators still managed to put a negative gloss on the figures.
Capital Economics said: “However, business investment was always likely to
rebound in Q1 after the weakness seen in Q4, when it fell by 0.9 per cent.
And it is possible that the other 40 per cent of all investment in the economy
(government and house building) was much weaker.”

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May 25, 2006 | posted by Michael Baxter in Uncategorized | comments (0) |

style=”color:#35;666666;”gt;Not so long ago, the then Fed chairman Alan
Greenspan said he had a conundrum. The US economy was booming, all the
reports indicated the good times would continue, and yet#133; the short-term
rate of interest, typically set by the Fed, and the longer term rate, set by
markets, were converging. A phenomenon known as the inverted curve, was
emerging, and economic history tells us that inverted curves mean recession
ahead. But this was at odds with all the positive economic news, and
therefore, many of the experts argued, the inverted curve was an anomaly -
nothing to get too worried about.

Forward wind the clock just a few months to today and all of a sudden
the view looks different. When markets tumble, economists fret. Fears over
the resurgence of inflation, coupled with concerns that the US balance of
trade deficit will unravel are behind the recent market turmoil.

If the curve representing the difference between long-term and short-
term rates were to invert today, that would be a lot more worrisome. Here’s
the bad news. Yesterday, albeit for a short time, that’s precisely what
happened.

At the end of 2000, long-term rates moved below the short-term level,
and stayed there for around 11 months. Recession followed. But this time
around things are a little different. The inversion we saw a few months ago
was short lived; yesterday, the inversion lasted a matter of a few hours. It
went negative on news of a dip in sales of big ticket items, such as cars and
fridges, but on the release of another report showing good news in the US
housing market, the long-term rates went up, and normal relations between
short and long-term were resumed.

So, around ninety minutes of an inverted curve does not mean recession
ahead. The fear is that this will happen again, and then again, and it will
settle at an inverted point for a while.

Why is this serious? Banks and other lending institutions typically
borrow at the long-term rate and lend at a level that is commensurate with
the short-term rates. So an inverted curve could spell a shortage of
credit.

Why is it possible this won’t matter? Firstly, the Fed has been upping
the interest rate so quickly of late that it is, perhaps, hardly surprising that
markets have not kept up. Secondly, the rate of interest is much lower today
than in the past when rates inverted, leading some to speculate that this
time around an inverted curve won’t matter.

Either way, this is a story that will unravel as the months move on - and
if nothing else, the saga could make the rate of interest interesting.

Sources

Yields throw the Fed a curve CNNMoney

This time, inverted yield curve may signal US slump
Reuters

May 24, 2006 | posted by Michael Baxter in Uncategorized | comments (0) |

Maybe it’s all Ben Bernanke’s fault. At the end of April the Fed chairman told congress that the Fed might need to take a break from upping the rate of interest, and to give the recent hikes more time to have an impact before deciding on the next move. As a result, markets celebrated those apparently soft words, and shares rose.

But a few days later, Mr Bernanke was reported as telling a US TV presenter that “It’s worrisome that people would look at me as dovish and not necessarily an aggressive inflation fighter.” And, when these views were heard, shares fell. Yesterday, Ben did the honourable thing, and told Congress he was wrong to make those comments. “That episode was a lapse of judgment on my part,” he said.