Mervyn King: UK House Prices Have Recovered 2/3 of Losses

julieq

DervProf has finally worked it out, well done.

Some institutions here were overexposed to the "toxic debt" from the US, and as a result confidence in them collapsed and they lost the lines of credit that sustained their cashflow.

Other institutions simply weren't as exposed as the bears like to believe. Confidence in them went down even so, in fact what has happened since has been that they haven't seen serious damage from exposure to lax (in fact criminal) lending in the US.

The rock was thrown in the pond, a little water splashed out, we're now back to where we were and most of the ripples have subsided.

Graham_Devon

DervProf wrote: »

If I was chucky, I`d be questioning why you had to mention that it was Americans who mis-sold mortgages.

Racism seeping through from the sub conscience.

See, i do learn.

Graham_Devon

julieq wrote: »

Graham dear, do you actually read any of the articles you post?

Interesting.

Third or so paragraph from the article you quoted:

"It follows the liquidity crunch in the financial markets caused by mortgage defaults in the US as the housing market slowed dramatically."

Which is exactly what Hamish said.

Do you actuallty read posts?

I'm sure he said:

HAMISH_MCTAVISH wrote: »

For the umpteenth time, UK mortgage lending standards and UK issued mortgages had absolutely nothing to do with the global financial crisis that froze the global credit markets and that is still the cause of mortgage rationing.

Nothing to do with it? We were partaking in it.

Oh dear Jules.

julieq

Graham_Devon wrote: »

Racism seeping through from the sub conscience.

See, i do learn.

Sub-conscience? Do you mean sub-conscious? Last time I looked the Americans weren't a race either.

And if lax lending anywhere was a factor, how come we've recovered prices without lax lending? The bears never explain that.

1984ReturnsForReal_2

HAMISH_MCTAVISH wrote: »

From this week.

Time for him to take a long holiday then.

Graham_Devon

julieq wrote: »

And if lax lending anywhere was a factor, how come we've recovered prices without lax lending? The bears never explain that.

You obviously don't read posts.

How many times have the "bears" gone on about interest rates being at a 300 year low. £200bn QE. SMI. Reposession criteria being tightened?

We do explain it. It's just you don't like that prticular elephant in the room....but scream for more.

Let's look at it another way. It wasn't our fault....we didn;'t have lax lending....we didnt have sub prime. We sound pretty good, don't we? None of it was our fault.

I don't understand why a UK bank called Northern Rock collapased when there were a few ripples in the pond then.

Can someone post a facepalm?

DervProf

julieq wrote: »

DervProf has finally worked it out, well done.

I don`t really need your thanks (but I`ll accept them anyway).

And I worked it out ages ago, even before it all went "crunch" !

Pity those with the means to prevent the credit crunch, didn`t.

julieq

Graham dear, there is a chain of cause and effect.

As the article you quoted conveniently explained, the cause of the financial crisis was lax lending in the US. Not lax lending in the UK.

When the financial crisis hit, that caused a contraction in credit (as you've conveniently highlighted in your more recent post). That pulled the rug from under UK institutions such as Northern Rock who had overindulged.

Northern Rock didn't cause the crisis. They were caught in the fallout of the crisis. It's really very simple.

And prices now back to close to where they were, showing that lax lending here had virtually nothing to do with HPI.

DervProf

julieq wrote: »

And if lax lending anywhere was a factor, how come we've recovered prices without lax lending? The bears never explain that.

Mexican stand-off.

Not much property changing hands, so not much change in prices. What will happen first, "lax lending" or forced sales ?

Maybe it`ll be a nice, gradual downward drift in prices until they match the lending conditions.

Graham_Devon

Alright Julie.

Your right. Everyone else, including economists, are wrong.