darkmarket

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About darkmarket

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  1. With reference to NI, I said "still no evidence of unmet demand at these prices." That's increasingly true across the UK as well. That's not a reason to build more houses as you suggest, it's a reason for prices to be allowed to correct themselves instead of more props. This narrative that 2007 prices are some sort of reasonable benchmark, NI prices are comparable with England's and there's huge pent-up demand waiting for a flood of new housing at 5x joint income on 30-year terms is just a myth. The market is a series of props intended to avoid banks having to write down losses accrued around 2007, some people being spared negative equity in the meantime hoping the greater fools will return, endless media bias to encourage consumption and an underlying economy based on handouts and debt with years of austerity ahead.
  2. True, there's nothing to do but watch nature takes its course. What happens between domestic credit and this inflation could be interesting. There's a good breakdown on Bloomberg of different types of credit in the US that pose systemic risks, notably student loans and sub-prime auto: "Consumers Are Too Giddy When It Comes to Borrowing ...The data reveal that some of these borrowers have already begun to default. As of October, more than 4 percent of the $1 trillion in FHA loans were 90 days or more in arrears. Distress is markedly higher among FHA loans for obvious reasons. The government-backed debt is the only source of mortgage availability for low-down-payment, subprime borrowers at a time when prices are rising relentlessly. ...Add it up and consumer credit excluding mortgage debt is fast approaching 20 percent of gross domestic product, a record high and a full two percentage points above where it peaked prior to the onset of the last recession. Lenders are getting nervous. According to the Fed’s latest senior loan officer survey, banks tightened lending standards for credit cards for the first time since 2010." https://www.bloomberg.com/view/articles/2017-02-14/consumers-are-too-giddy-when-it-comes-to-borrowing This just after Carney renewed his vigilance warning over the systemic risk domestic credit has become in the UK (too modest to mention he made it himself). As prices start to rise and weak pound meets strong dollar, the obvious answer is to use a credit card while rates are so low to avoid missing out on things you're used to. Keeping people quiet while inflation bites will keep the BoE and the Treasury happy, so there's an incentive for them to let it go unchecked, just like they've used it to distort GDP. Talk of how "lenders are getting nervous" over default risks is interesting. It's like watching a fat kid approach a cake.
  3. Exactly, and despite all those props there's we still have almost zero growth the last few quarters and transactions down YoY. The much-touted bull market the media were talking up is going nowhere. There's a trickle of supply, a huge amount held back chasing equity fantasies and still no evidence of unmet demand at these prices.
  4. Under the circumstances, the BoE feels it has latitude to place a higher value on economic stability, and justify the pain caused by inflation by pointing to the quarter million job losses he predicts otherwise. It does have a statutory obligation to target 2% though, so that window for Carney to ignore inflation is restricted. When consumers and business are so concerned about inflation they'd accept the unemployment to relieve it, there'll be pressure on Carney and Hammond. But both know the government can't afford too much interest on its debts any more than the general public. The other group who could affect decisions is people with dangerous levels of domestic credit. If they start defaulting in large numbers (they have) but the UK continues to import inflation from the US and even the EU, there's an irreconcilable issue.
  5. It looks as though tightening is being achieved by less direct measures, mainly letting repos expire and the liquidity from the New Year period gradually be withdrawn. There are other steps underway, notably explicit requests to banks to tighten mortgage lending: http://in.reuters.com/article/us-china-economy-mortgages-idINKBN15O0AA The overall trend is still the same: Shanghai just reported over 20% YoY in January and the FX situation is relentless, as Zugzwang mentioned, but the capital controls look to be effective at least.
  6. Suggests a certain pressure to agree with the prevailing view.
  7. MPC member breaking ranks on looking through inflation: "There is a chance, however, that these recent upside surprises are a precursor to more evidence that inflation is accelerating faster than expected and will overshoot the 2% target by more than in the MPC’s consensus forecast. If these trends in both the real and nominal data are solidified, it will become increasingly difficult for me to justify tolerating such a large and likely overshoot of inflation - especially when compared to such a small and uncertain softening in growth and unemployment." http://www.bankofengland.co.uk/publications/Documents/speeches/2017/speech959.pdf
  8. If this is in relation to the posts on debt defaults, it's worth researching the impact of debt defaults on the financial system and the interconnected nature of the banking system. As noted, it represents a systemic risk. Perhaps someone with a bit more skill in statistics than I have could help out with that. Some of the traders on here might have the insight necessary to say what it represents.
  9. "Brussels bank capital plan criticised by Bank of England In correspondence published by the Commons Treasury Select Committee (TSC), Sam Woods, the head of the Bank’s Prudential Regulation Authority (PRA), lambasted a proposal by the Commission that would force non-EU banks with big European businesses to set up holding companies holding enough capital to absorb losses if they ran into difficulties." http://www.telegraph.co.uk/business/2017/01/27/brussels-bank-capital-plan-criticised-bank-england/ Don't threaten the too-big-to-fail model, we're literally banking on it.
  10. I think it's probably more related to downward pressure on the Yuan, given the measures they've introduced to cool the property market in T1 cities in particular. Those measures appear to be working very well, as suggested by the decision of some private companies to stop publishing house price data. A stronger Yuan helps out in the shift from exports towards domestic consumption. Although that's looking like a longer-term objective than it was, it's still the strategy. Protecting the Yuan was costing so much it was also affecting capital that may be required for dealing with shadow banking in the short term and reforming the SOE sector, as that progresses in the medium term. Given all that, I wouldn't expect the capital controls to be loosened any time this decade.
  11. I only wrote one sentence, but I did mention that: We can indeed read into this, two things at least: Individual insolvencies are up 13% YoY; It's the first rise since 2009. We can add to that even Mark Carney has been forced to assume a vigilant position with regard to household debt, suggesting it represents a systemic risk to the economy. We can say these facts are related. No need to go any further. You appear to be implying this increase is anomalous. We can discuss that when the next round of figures are released, any speculation in the meantime isn't useful. This increase is explained on page one: "primarily caused by 1,796 connected personal service companies entering liquidation on the same date following changes to claimable expenses rules." The individual insolvencies are what's noteworthy about this report.
  12. Individual insolvencies up 13% YoY, first rise since 2009: https://www.gov.uk/government/statistics/insolvency-statistics-october-to-december-2016 Figures are for England & Wales only.
  13. I don't think there's much doubt about that by now. $50k / year, strictly enforced.
  14. This is quite entertaining: "World’s Biggest Real Estate Buyers Are Suddenly Short on Cash China’s escalating crackdown on capital outflows is sending shudders through property markets around the world. In London, Chinese citizens who clamored to purchase flats at the city’s tallest apartment tower three months ago are now struggling to transfer their down payments. In Silicon Valley, Keller Williams Realty says inquiries from China have slumped since the start of the year. And in Sydney, developers are facing “big problems” as Chinese buyers pull back, according to consultancy firm Basis Point. ...At The Spire in London, a 67-story tower with sweeping views of the River Thames and flats starting at 595,000 pounds ($751,901), prospective buyers were caught off guard by the new rules. Less than 70 percent of clients who signed purchase contracts last year have made their initial payments, with the rest now facing “problems,’’ a press official at Greenland Holdings Corp., the project’s Shanghai-based developer, said on Jan. 12. The official asked not to be named, citing company policy." https://www.bloomberg.com/news/articles/2017-01-26/world-s-biggest-real-estate-buyers-are-suddenly-short-on-cash