Mortgage lending fall undermines recovery hopes

Graham_Devon

If the IMF bails us out, everything we know now goes out the window anyway, and, relating to a thread earlier, we'd most likely see soaring interest rates and house prices dropping like a stone.

bluey890

Graham_Devon wrote: »

If the IMF bails us out, everything we know now goes out the window anyway, and, relating to a thread earlier, we'd most likely see soaring interest rates and house prices dropping like a stone.

Evicting people from homes isn't a vote winner. It's getting votes that matters in politics (and the BoE is not free from politics), hence the parties 'focus groups'. Free market forces do not come into play.

Graham_Devon

bluey890 wrote: »

Evicting people from homes isn't a vote winner. It's getting votes that matters in politics (and the BoE is not free from politics), hence the parties 'focus groups'. Free market forces do not come into play.

I'm not sure if I understand correctly.

The IMF is not looking for votes. If they bailed us out, they would rightly, have terms attached. These terms would not be letting inflation erode debt. They would be much the same as before when labour went to them.

FoxtonsRIP

Harry_Powell wrote: »

Gimme a chance mate, I have only been seriously looking for a couple of weeks.

Welcome back Dad.

ad9898_3

bluey890 wrote: »

IMF bailout or further QE is a possibility.

Further QE to pay for government spending wouldn't be tolerated by the bond markets.

bluey890

ad9898 wrote: »

Further QE to pay for government spending wouldn't be tolerated by the bond markets.

It's the QE that'll be buying the bonds.

bluey890

Graham_Devon wrote: »

I'm not sure if I understand correctly.

The IMF is not looking for votes. If they bailed us out, they would rightly, have terms attached. These terms would not be letting inflation erode debt. They would be much the same as before when labour went to them.

I guess my thoughts are based upon decisions I think people will make rather than logic per se.
Polititicians own lots of properties, including BTLs, and will therefore go to lenghs to stop property prices crashing.
This may mean QE rather than IMF.

ad9898_3

bluey890 wrote: »

It's the QE that'll be buying the bonds.

I understand that, however foreign investors would start to get up tight, the government alone can't buy all the bonds, without foreign investors to buy our debt we would be finished very quickly.

bluey890

ad9898 wrote: »

I understand that, however foreign investors would start to get up tight, the government alone can't buy all the bonds, without foreign investors to buy our debt we would be finished very quickly.

A bit like what's happening in America?
(I recognise that the dollar is buoyed by transactions being in dollars - oil e.t.c.)

ad9898_3

bluey890 wrote: »

A bit like what's happening in America?
(I recognise that the dollar is buoyed by transactions being in dollars - oil e.t.c.)

Mmmmm, no, the US has the reserve currency so they have far more scope to print than we do, although like everything, there is a limit. We are already on a negative footing with S&P, further QE would undermine our status even more. If we were downgraded it would be a disaster, IR's would rise, whether the economy or government wanted them to or not.

Iceland is an extreme case, and we wouldn't be in their position, but that would be road we would be going down.