A "full-scale property boom will begin in 2014"

OffGridLiving

Graham_Devon wrote: »

Whats your view on this? You think it's the right or wrong thing to hold up property prices?

The trouble we have in discussions is that we're always going to be at cross purposes. I maintain that interest rates were lowered because of a banking crisis. You guys maintain that interest rates were lowered to 0.5% to stop a housing crash, Whenever I ask whether you guys think interest rates are low across the whole developed world in order to prop up UK house prices, you guys vanish from the discussion.

It's an impasse that prevents any sort of sensible discussion of this nature.

Graham_Devon

OffGridLiving wrote: »

The trouble we have in discussions is that we're always going to be at cross purposes. I maintain that interest rates were lowered because of a banking crisis. You guys maintain that interest rates were lowered to 0.5% to stop a housing crash, Whenever I ask whether you guys think interest rates are low across the whole developed world in order to prop up UK house prices, you guys vanish from the discussion.

It's an impasse that prevents any sort of sensible discussion of this nature.

I just asked what you thought about it?

I.e. are you on the side that this stimulus towards this type of asset is a good thing? Or do you feel stimulating the assets and therefore the prices is the wrong thing?

OffGridLiving

Graham_Devon wrote: »

I just asked what you thought about it?

I.e. are you on the side that this stimulus towards this type of asset is a good thing? Or do you feel stimulating the assets and therefore the prices is the wrong thing?

The whole point of my previous post is that as I don't believe that "this stimulus is towards this type of asset". Low interest rates were brought in because of the Global Financial Crisis, not to prop up house prices. So your question is moot, hence the impasse.

I do believe that this stimulus towards getting us out of the global financial crisis is a good thing, if that's any help to you.

Graham_Devon

OffGridLiving wrote: »

The whole point of my previous post is that as I don't believe that "this stimulus is towards this type of asset". Low interest rates were brought in because of the Global Financial Crisis, not to prop up house prices. So your question is moot, hence the impasse.

I do believe that this stimulus towards getting us out of the global financial crisis is a good thing, if that's any help to you.

Right, so funding for lending, lend a hand, new buy, mortgage guarantees, are NOT aimed at housing?

Clearly QE and interest rates are not aimed directly at the housing market - but also, quite clearly, the other schemes are what I was talking about, hence listing them.

I was questioning you as I came across a post yesterday, from the time you were pretending to be someone else, which has you stating that the housing market should be left to it's own devices, and that its crazy policy to prop it up.

Was wondering where your change of heart came from?

HAMISH_MCTAVISH

Graham_Devon wrote: »

I.e. are you on the side that this stimulus towards this type of asset is a good thing? Or do you feel stimulating the assets and therefore the prices is the wrong thing?

This isn't 'stimulus'.

This is emergency medical treatment, helping the still seriously ill mortgage markets to function.

And the course of treatment is still only a small fraction of the way through.

Eventually, the treatment course will be complete, and the patient will be healed and able to function normally without it.

We can then remove the medical treatment.

Doing so at this stage would be ill-advised and reckless to the health of both the mortgage market and wider economy.

ILW

OffGridLiving wrote: »

I do believe that this stimulus towards getting us out of the global financial crisis is a good thing, if that's any help to you.

Many believe that it was such stimulus (Too low IRs, lax lending etc) that caused the global financial crisis). Could too much stimulus just lead to bigger and worse problems in the near future?

HAMISH_MCTAVISH

ILW wrote: »

Many believe that it was such stimulus (Too low IRs, lax lending etc) that caused the global financial crisis). Could too much stimulus just lead to bigger and worse problems in the near future?

To continue the medical analogy....

The US mortgage market was like a crack cocaine addict that had a heart attack.

The UK mortgage market was the innocent victim standing on the side of the road that got hit by the bus the US market was driving at the time it had that heart attack. Mr UK Market might have sipped a bit of red bull that morning, but it wasn't that which caused him to be admitted into intensive care, nor would it have been had he not been hit by a bus.

Completely different scenario.

Graham_Devon

HAMISH_MCTAVISH wrote: »

This isn't 'stimulus'.

This is emergency medical treatment

This is why discussion is so utterly pointless.

Heres Hamish to redefine the definition of stimulus....

ILW

HAMISH_MCTAVISH wrote: »

To continue the medical analogy....

The US mortgage market was like a crack cocaine addict that had a heart attack.

The UK mortgage market was the innocent victim standing on the side of the road that got hit by the bus the US market was driving at the time it had that heart attack. He might have sipped a bit of red bull that morning, but it wasn't that which caused him to be admitted into intensive care, nor would it have been had he not been hit by a bus.

Completely different scenario.

But the GFC went way beyond just mortgage lending. The US sub prime thing just turned the lights onto where the whole system was already falling down.

abaxas

Great, we can !!!! ourselves over again.