Guarduan/Reuters: BoE to cut to 1.5% in Dec

setmefree2

!!!!!!? wrote: »

Property, chiefly.

Labour costs also seem to have risen considerably . Especially anything requiring professional work.

The stock market was over inflated too - a lot of money looking for a home and not in banks as the interest rate was so low.

Plenty of inflation in commodity prices as well.

And at the very end we saw energy (and food) spiralling. That was pretty much the end-game as overpriced energy is going to choke off growth and create demand destruction.

But these "Asset Bubbles"/ inflation spots are all areas in which people "invest". So what do we do - stop people investing?

dealornodeal_3

setmefree2 wrote: »

I totally agree that HPs will fall along way - some areas may see 70% price falls, some areas hardly anything...

I think that depends on unemployment.. Which I am convinced will hit nearly all areas eventually. And of course the £ falling in value!

Dithering_Dad

!!!!!!? wrote: »

Were you reading the housing board in August 2007? That wasn't the general perception at the time amongst MSEers there I can tell you.

There is nothing magical about forecasting a crash in the housing or stock markets, it's simply a historical fact that boom follows bust follows boom.

I could just as easily start talking about a boom in house prices that will be starting soon and people should start buying. Everyone will laugh, but eventually there will be a boom and I'll be able to say "See, I told everyone there would be a boom and they should buy a house before rampant HPI, but no one listened to me!! The idiots!".

Anyone who decided to STR in 2002 has had 5 years of fear and sweating, waiting for prices to crash down, probably just to the level that they sold at in the first place. Anyone who bought at the peak will probably have 5 years of fear and sweating until prices reach the level they bought at.

Then the whole cycle will repeat, and no doubt experts like !!!!!!? will tell you that 'they told you so', :rolleyes:

StevieJ

!!!!!!? wrote: »

Were you reading the housing board in August 2007? That wasn't the general perception at the time amongst MSEers there I can tell you.

I wasn't here then, but what have you been saying about inflation and buying a house. Who was it who said something like 'when the facts change, I may change my mind'
The point is the credit crunch (I am cannot be bothered repeating the US thing again) has caused the market to crash. This was in no way part of the HPC rationale for the markets to crash, in fact you still say it is because the banks have lent stupidly in the UK.

WTF?_2

StevieJ wrote: »

I wasn't here then, but what have you been saying about inflation and buying a house. Who was it who said something like 'when the facts change, I may change my mind'

That would be me. You still don't seem to get that I make my decisions on house buying based on how I see the market going, not on some stupid "I'm never going to buy a house, ever" dogma. If I see benefit in buying, I will buy.

The point is the credit crunch (I am cannot be bothered repeating the US thing again) has caused the market to crash. This was in no way part of the HPC rationale for the markets to crash, in fact you still say it is because the banks have lent stupidly in the UK.

The bottom line is that the credit ran out to fund the sky high borrowing. The global credit bubble collapsed and house prices were therefore not sustainable as they relied on copious, cheap credit being available to all.

It just so happened that the limit of the borrower to support the levels of debt they were taking on was reached in the USA first and since those cunning yanks managed to flog a lot of their housing debt off to greedy European bankers, Europe got hit by the crisis in the states too. HPI over here came to an end about 9 months or so after the USA market went off the boil.

Given that it was dodgy securitization in the USA which made possible the credit bubble and therefore HPI in the UK it's a bit rich to try to claim the credit crunch is some sort of arbitary external factor that impinged on an otherwise sustainable state of affairs. The whole thing was part of one gigantic global credit bubble.

(Oh, and as it happened the UK market started showing month on month falls about 3 months before mortgage availability started to take a big hit so the notion that somehow things would have been fine if only those yanks hadn't messed up is doubly wrong.)


And yes - UK banks did lend stupidly. Incredibly stupidly as we are about to witness as the homegrown debt defaults start to roll in. The UK market is even more overblown than the US market was and UK (and Euro) banks are even more heavily leveraged than US banks.

StevieJ

!!!!!!? wrote: »

That would be me. You still don't seem to get that I make my decisions on house buying based on how I see the market going, not on some stupid "I'm never going to buy a house, ever" dogma. If I see benefit in buying, I will buy.


The bottom line is that the credit ran out to fund the sky high borrowing. The global credit bubble collapsed and house prices were therefore not sustainable as they relied on copious, cheap credit being available to all.

It just so happened that the limit of the borrower to support the levels of debt they were taking on was reached in the USA first and since those cunning yanks managed to flog a lot of their housing debt off to greedy European bankers, Europe got hit by the crisis in the states too. HPI over here came to an end about 9 months or so after the USA market went off the boil.

Given that it was dodgy securitization in the USA which made possible the credit bubble and therefore HPI in the UK it's a bit rich to try to claim the credit crunch is some sort of arbitary external factor that impinged on an otherwise sustainable state of affairs. The whole thing was part of one gigantic global credit bubble.

(Oh, and as it happened the UK market started showing month on month falls about 3 months before mortgage availability started to take a big hit so the notion that somehow things would have been fine if only those yanks hadn't messed up is doubly wrong.)


And yes - UK banks did lend stupidly. Incredibly stupidly as we are about to witness as the homegrown debt defaults start to roll in. The UK market is even more overblown than the US market was and UK (and Euro) banks are even more heavily leveraged than US banks.

Given that it was dodgy securitization in the USA which made possible the credit bubble and therefore HPI in the UK

How does british banks buying dodgy CDO's provide credit in the UK housing market?

(Oh, and as it happened the UK market started showing month on month falls about 3 months before mortgage availability started to take a big hit so the notion that somehow things would have been fine if only those yanks hadn't messed up is doubly wrong.)

When did Northern Rock go bust?

I tell you there is some truth in the adage !!!!!!!! baffles brains.

WTF?_2

StevieJ wrote: »

Given that it was dodgy securitization in the USA which made possible the credit bubble and therefore HPI in the UK

How does british banks buying dodgy CDO's provide credit in the UK housing market?

Good grief :rolleyes:

Where do you think that all that credit came from to make all those loans? :wall:

You accept there was a credit bubble, yes? Then apply some brainpower and ask yourself why it was suddenly possible to give out 95,100 even 125% mortgages to anyone who could fog a glass????????

How was it that practically everyone had access to thousands or even tens of thousands of pounds of credit?

The whole murky 'new financial instruments' mess in the US was powering the boom that we were enjoying by providing the credit that our boom was running on.

As soon as it collapsed over there (once defaults started) the UK 'success story' was bound to end sooner rather than later.

(Oh, and as it happened the UK market started showing month on month falls about 3 months before mortgage availability started to take a big hit so the notion that somehow things would have been fine if only those yanks hadn't messed up is doubly wrong.)

When did Northern Rock go bust?

Go back and take a look at the house price figures. They didn't just do a 180 degree turn overnight - they were slowing down, levelling off and heading for falls before the collapse of Northern Rock.

I tell you there is some truth in the adage !!!!!!!! baffles brains.

Why not put as much determination into thinking about the issues as you do into slagging me off? Then maybe you'd have some valid points to argue with.

StevieJ

!!!!!!? wrote: »

Good grief :rolleyes:

Where do you think that all that credit came from to make all those loans? :wall:

You accept there was a credit bubble, yes? Then apply some brainpower and ask yourself why it was suddenly possible to give out 95,100 even 125% mortgages to anyone who could fog a glass????????

How was it that practically everyone had access to thousands or even tens of thousands of pounds of credit?

The whole murky 'new financial instruments' mess in the US was powering the boom that we were enjoying by providing the credit that our boom was running on.

As soon as it collapsed over there (once defaults started) the UK 'success story' was bound to end sooner rather than later.


Go back and take a look at the house price figures. They didn't just do a 180 degree turn overnight - they were slowing down, levelling off and heading for falls before the collapse of Northern Rock.


Why not put as much determination into thinking about the issues as you do into slagging me off? Then maybe you'd have some valid points to argue with.

What do you mean by slagging off disagreeing with you?
Just out of interest, what was fuelling it when the markets rocketed in the late 80's?.

Are you saying that those CDO's contained UK debt? because that is not my understanding.

Go back and take a look at the house price figures. They didn't just do a 180 degree turn overnight - they were slowing down, levelling off and heading for falls before the collapse of Northern Rock.

You said month on month falls :eek:

StevieJ

You accept there was a credit bubble, yes? Then apply some brainpower and ask yourself why it was suddenly possible to give out 95,100 even 125% mortgages to anyone who could fog a glass????????

Just one other issue, are you not aware that 95% and 100% mortgages were available before Cdo's were a twinkle in their malevolent creators eye. In fact I secured a 100% mortgage when I bought my house.

sabretoothtigger

BOE must be estimating a collapse in the economy to put in another 1.5% cut