Is inflation starting to hit the housing market?

Harry_Boyle

Thrugelmir wrote: »

Bets are currently on hold. Carney isn't on board until 1st July.

So King is unlikely to introduce any new lending schemes.

Given state of the banks. I would say that the BOE is highly likely to engineer at least one scheme to assist domestic lending for business and retail purposes. The caveat though is this will not increase overall mortgage lending merely support it. .

So you're syaing 'yes', the BoE will continue providing liquidity to the markets and not allow deflation to occur.

It does therefore raise the question of why you brought up the spectre of the BoE doing nothing about deflation if you don't think it will ever happen?

Thrugelmir

IveSeenTheLight wrote: »

Sir Mervyn King put the proposal for more QE at the last MPC meeting and was voted against.

There is no edict that says things are on hold until Mr Carney suceeds in July

True. I'm merely expressing a personal opinion.

FLS runs until next January. So doesn't appear to be a great urgency for immediate action. Even if QE was voted for. Doesn't mean that will introduced immeditely. Just available in the locker.

Harry_Boyle

Thrugelmir wrote: »

True. I'm merely expressing a personal opinion.

Something that you don't always make clear with your posts Thrug. Often you pitch them (deliberately?) to sound as though they are factual, rather than merely your opinion.

Thrugelmir

Harry_Boyle wrote: »

So you're syaing 'yes', the BoE will continue providing liquidity to the markets and not allow deflation to occur.

It does therefore raise the question of why you brought up the spectre of the BoE doing nothing about deflation if you don't think it will ever happen?

Does the BOE have enough tools in the toolbox to cope with the global change in banking?

I merely pose the challenges that lie ahead. As isn't that the point of this forum?

As Buffet says. When the tide goes out. You'll find out whose swimming without trunks on.

Time moves in cyclical waves. For a whole generation they only witnessed an illusory boom.

Harry_Boyle

Thrugelmir wrote: »

Does the BOE have enough tools in the toolbox to cope with the global change in banking?

I merely pose the challenges that lie ahead. As isn't that the point of this forum?

As Buffet says. When the tide goes out. You'll find out whose swimming without trunks on.

Time moves in cyclical waves. For a whole generation they only witnessed an illusory boom.

So now you're saying 'no, the Boe won't provide liquidity to stop deflation'?

chucky

Harry_Boyle wrote: »

So now you're saying 'no, the Boe won't provide liquidity to stop deflation'?

I really can't believe he's changed his mind within 3 posts, he's even answered the question with a question full of soundbites.

Hats off to old Thrug he seems to have become the riddler.

ess0two

chucky wrote: »

I really can't believe he's changed his mind within 3 posts, he's even answered the question with a question full of soundbites.

Hats off to old Thrug he seems to have become the riddler.

Nice to see you back.

The muddler is still here though.

Thrugelmir

IveSeenTheLight wrote: »

So........
Your position is..........

"Retrenchment" for 5-6 years (can we assume this includes the last three years stagnation?)

Basle 111 bank capital regulations do not take full effect until 2019.

The G20 agreed in 2010 that a quicker introduction would be extremely difficult. Given that many Governments would need to contract their own spending in the same time frame.

I admire your optimism that global finances are far better than appears to be the case. .

IveSeenTheLight

Thrugelmir wrote: »

As Buffet says. When the tide goes out. You'll find out whose swimming without trunks on.

Pretty crap analogy that presumes that people do not react to the changing circumstances.

What stop's those without trunks moving with the tide?

Else, maybe their happy to be seen without their trunks and walk out despite where the tide is.

IveSeenTheLight

Thrugelmir wrote: »

Basle 111 bank capital regulations do not take full effect until 2019.

The G20 agreed in 2010 that a quicker introduction would be extremely difficult. Given that many Governments would need to contract their own spending in the same time frame.

I admire your optimism that global finances are far better than appears to be the case. .

Just to post a few points made previously in other threads

Generali wrote: »

I wonder whether the regulator has had a nod and a wink to the banks about the future direction of regulation.

Basle III may yet be 'unagreed'.:cool:

Generali wrote: »

That and more Government subsidies for lending to counteract the OTT Basle III agreement (as was).

Definitely a big step in the right direction to re-establishing a functioning housing market.

Clearly it is no good to the UK's economy if one of the biggest single asset markets is dysfunctional.

Generali wrote: »

As predicted by many bank watchers*, there is a lot of back sliding as we approach the first of many deadlines for the introduction of the Basle III Accord, a set of rules covering bank solvency, bank reserves and assorted rules about how banks should stop going bust.

The main problem is that in many counties their banks haven't managed to put aside enough in assets to enable them to keep their doors open under the new rules so what to do?

British banks have basically covered their new commitments under the first part of Basle III but the US and European banks haven't done so well. Do we let British banks go and take market share from their weaker cousins or do we change the rules?

There is nothing concrete yet but I suspect that I know the answer and it isn't to let the bloody Brits come over here and take Our Customers. The result is going to be a lot of surplus cash on UK bank balance sheets so the UK part of the credit crunch may be ending sooner than many people think. We might well find out next year whether the lack of lending is due to a lack of supply or of demand.

*Modesty prevents me saying which one close to 'home' predicted this stuff.

Generali wrote: »

They are generating it from profit. British banks are, for the most part, hugely profitable in international terms. Not as profitable as Aussie banks but the Aussie market is small and uncompetitive. They are more profitable than in most European countries where banks are run for political reasons as much as business ones or than in the US where competition is freer.

Basle III, which British banks are basically ready for, will be delayed or watered down internationally. That will free up reserves for British banks IMHO.

I know which posters comments I am more aligned with.