interestrateripoff

The Bank Of England Clueless Thread

2,585 posts in this topic

1 hour ago, Noallegiance said:

It's OK everyone. Mark's being vigilant again.

http://www.bbc.co.uk/news/business-38155178#comment_125882346

Join the dots.

For that reason he said the rules on risky mortgage lending would remain as they have been for the last two years.
In June 2014 lenders were told they could not lend any more than 15% of their loan book to people borrowing more than 4.5 times their annual income - so-called riskier mortgages.

.......

In its report, the Bank also noted that house prices are now, on average, 4.5 times those of average incomes, a ratio which is high by historical standards.

 

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Household debt too high? It's risen continuously since the Canadian dummy took over from Mervo the Clown in 2013!

Carney should tell the truth: His thorough incompetence has left the Bank sidelined by the markets, neither able to raise rates or lower them.

Swarm over, death...

150402-Household-debt.png

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1 hour ago, Democorruptcy said:

Join the dots.

For that reason he said the rules on risky mortgage lending would remain as they have been for the last two years.
In June 2014 lenders were told they could not lend any more than 15% of their loan book to people borrowing more than 4.5 times their annual income - so-called riskier mortgages.

.......

In its report, the Bank also noted that house prices are now, on average, 4.5 times those of average incomes, a ratio which is high by historical standards.

 

 

and he selects his words carefully.  "Income" must be different to earnings.

Quote

 

 

nationwide.jpg

Quote


2 November 2016

http://www.bbc.co.uk/news/business-37844832

The typical UK home now costs six times average annual earnings, even though house price inflation is slowing, according to the Nationwide.

The last time the prices/earnings ratio was so high was more than eight years ago, in March 2008.

 

 

Edited by billybong

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1 hour ago, Democorruptcy said:

Join the dots.

For that reason he said the rules on risky mortgage lending would remain as they have been for the last two years.
In June 2014 lenders were told they could not lend any more than 15% of their loan book to people borrowing more than 4.5 times their annual income - so-called riskier mortgages.

.......

In its report, the Bank also noted that house prices are now, on average, 4.5 times those of average incomes, a ratio which is high by historical standards.

 

 

After Brown created the the FSA we had a tripartite (FSA/Bank of England/Treasury) system overseeing the mortgage lenders at a systemic level but mortgage lending was self-regulated between 1997 and 2004. (You might have noticed a slight decline in lending standards during this period; liar loans, naked interest-only, buy-to-let.)

Mortgage lending to owner-occupiers was regulated by Brown's FSA from 2004 until the Coalition dismantled the tripartite system in the aftermath of the Financial Crisis. The FSA arrived on the mortgage regulating scene at a time when there was endemic mortgage fraud by borrowers, abetted by lenders. The FSA pointedly ignored all this wrong-doing and pursued, at the behest of the Treasury, a touch that was so light-touch it was basically no-touch.

The Bank of England implemented the Mortgage Market Review in April 2014 essentially removing self-certified lending and interest-only lending from the mortgage market.

Brown had kept buy-to-let lending unregulated in 2004 and when Labour set up the terms of the Mortgage Market Review once again buy-to-let was protected from the consequences of supervision by regulators because politicians at the Treasury decided that was how they wanted to play things. Osborne passed on the chance to regulate buy-to-let presented by the implementation for European Union Mortgage Credit Directive in 2014. The government has now announced that it will grant the Bank of England's Financial Policy Committee the powers of direction it has been publicly seeking since the the summer of 2014. Even in the absence of powers of direction the Bank's Prudential Regulation Authority has issued credit underwriting rules which bring forward the effects of the Section 24 amendments to the taxing of property income.

It is essentially impossible to reasonably argue with the proposition that the Bank of England under Carney has driven through a tightening-up of lending standards that means that regulatory controls over mortgage lending to both owner-occupiers and buy-to-let lenders are now enormously tighter than they were ten years ago.

These controls have consequences. Though nationwide house price indices are much higher than they were in 2008 the inflation is centred on and largely driven by London house prices. The stock of secured lending to owner-occupiers has hardly grown at all since the financial crisis; almost all the growth in lending since the crisis is buy-to-let.

The facts simply do not support the suggestion that loose lending to owner-occupiers is driving house prices and that the Bank of England is encouraging that lending.

If the Bank of England is trying to drive house prices by pushing lending on owner-occupiers they are going about in in the most extraordinary way. There is a much simpler explanation; they aren't trying to drive house prices by pushing lending on owner-occupiers.

Look at it this way. Mortgage interest rates have collapsed, yet the stock of secured lending to owner-occupiers has hardly grown at all. Look at the conduct of the CML lenders with buy-to-let. Is there anyone who seriously believes that the mortgage lenders are not lending wildly to households because they've finally seen the light? Their regulator is stopping them, and the Bank of England is that regulator.

Edited by Bland Unsight

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38 minutes ago, interestrateripoff said:

Donald Trump has made financial system vulnerable, says Mark Carney

Protectionist policies will hurt the UK as an 'open trading nation', Bank of England Governor says 

 

And Mark Carney makes it safe.......


Indeed

Quote

 

 

The President-elect has already “reinforced existing vulnerabilities” in the financial system, the UK’s central bank argued. Those vulnerabilities were highlighted on Wednesday when bailed out lender, RBS, failed stress tests, suggesting it would not survive another financial crisis.

 

There he goes again.

More Forward Guidance.  Carney is well known for his forward guidance.  It's one of the reasons the economy is in the mess it's in - Trump had nothing to do with the mess, Trump doesn't even become fully President until next year.

One of the reasons Trump was elected was to sort out the mess, including an economy totally wrecked by the likes of Carney.  

Then he's implying that Trump is going to be responsible for the future failures of RBS - words fail.  It sounds like future failure of RBS is already baked in the cake - in large part due to the past actions or lack of action of the BoE.

 

 

Edited by billybong

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On 30/11/2016 at 8:31 PM, interestrateripoff said:

Donald Trump has made financial system vulnerable, says Mark Carney

Protectionist policies will hurt the UK as an 'open trading nation', Bank of England Governor says 

 

And Mark Carney makes it safe.......

The breakdown of a thirty+ year free market program of privatisation, globalisation and deregulation was responsible for the GFC, from which the global economy has yet to recover.

Donald Trump's election is an expression of popular dissatisfaction with that dual failure.

Is it really the case that Carney doesn't understand this, or is he simply propagandising for the City of London?

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9 hours ago, interestrateripoff said:

Bank of England insists monetary stimulus saved the ‘left behind’

New economic modelling research from the Bank suggests all regions of the UK have benefited from the monetary stimulus in terms of incomes, employment and wealth

The same article quotes Haldane speculating on the chance of a move down to 0%:

"He said the probability that this [low growth in 2017] could force its policy interest rate down to the “zero lower bound”, where borrowing rates cannot practically be pushed any lower, was between 15 and 40 per cent.

“My personal views is that this provides grounds for not proceeding too hastily with any tightening of the monetary policy stance,” he said."

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7 hours ago, zugzwang said:

The breakdown of a thirty+ year free market program of privatisation, globalisation and deregulation was responsible for the GFC, from which the global economy has yet to recover.

Donald Trump's election is an expression of popular dissatisfaction with that dual failure.

Is it really the case that Carney doesn't understand this, or is he simply propagandising for the City of London?

I dont think its just one thing.

At the core theres a couple of notable thigns:

1) Grossly outsized, overleveraged financial sector.

Allowed to get that way due to a combination of poltical stupidity (Brown - Oh look at the tax take!), naive assumtpions (Greenspan - Im sure the banks wont do anything crooked or that would lose them money), and fumb greed (Everyone working in finance- Look at my bonus! Lets sell more debt)

2) China

A country of ~2bln enters the world economy and pursues a very aggressive,  trade policy - You can but our stuff, well buy capital goods only. This has leveraged up, with more money, more people working under slave like conditions.

Again, a number of dumb politicians say - Well Im sure its free trade. Can our <insert any company> sell into China? No,fckoff!

They'll need to write the book on industrial espionage after China.

The whole China thing is reaching an end game. The non Chinese political bases are kicking up everywhere. Not just the West, try listeing to a developing country which has had Chinese aid - a city of workers turn up, do some aggressive vendor finance for raw commodities, then leave some junk behind.

And you get the Peak China product - Huawei comms kits.

A division of the Red Army, operating an employee owned Ponzi, selling comms kits which *may* have huge number of backs doors under Chinese control.

 

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2 hours ago, nome said:

Tell a lie, make it big, repeat it often and they will, eventually, believe you.

It certainly has an hypnotic effect, at least until reality intrudes again.

2017 is the UK's 'back in the room' moment.

Youre-Back-in-the-Room-th.jpg

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http://www.bbc.co.uk/news/amp/38210169

"Just 2% of households have deposit holdings in excess of £5,000, [they have] few other financial assets, and don't own a home.

"So the vast majority of savers who might have lost some interest income from lower policy rates have stood to gain from increases in asset prices, particularly the recovery in house prices," he added.

You only gain from the house price recovery after you sold it.

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On 11/30/2016 at 8:43 PM, Bland Unsight said:

It is essentially impossible to reasonably argue with the proposition that the Bank of England under Carney has driven through a tightening-up of lending standards that means that regulatory controls over mortgage lending to both owner-occupiers and buy-to-let lenders are now enormously tighter than they were ten years ago.

Tghtening-up was inevitable in light of 2008, that's the default position, they get no credit whatsoever for it. 

What is more notable is that they have done essentially as little as possible for as long as possible.

The BOE have always had indirect powers to regulate buy-to-let lending, they just don't use them.  So what should we conclude from that?

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32 minutes ago, BuyToLeech said:

Tghtening-up was inevitable in light of 2008, that's the default position, they get no credit whatsoever for it. 

What is more notable is that they have done essentially as little as possible for as long as possible.

The BOE have always had indirect powers to regulate buy-to-let lending, they just don't use them.  So what should we conclude from that?

As far as I can see, every since Carnery took over every turn by the BoE has been to pump up prices...whilst pretending to be everyone's friend and promising to sort it out.

There was the analogy of Carney or the BoE being an unreliable boyfriend, the analogy should have been a boyfriend hooked on drugs, regularly beating his bint and ultimately robbing her blind and leaving her with nothing but bruises and no future.

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Just tracked-back on this thread for posts from 11 October but couldn't find any reference to info below.

 

This 41 second video with Merv is worth a watch.  :lol:

Although it's all about telling lies and spinning realities - although hopefully there's some change ahead where the HPIers/BTLers will have to look to their own decisions and little comfort coming from the policymakers.  

Quote

 

Tuesday 11 October 2016

Merv: during the referendum someone said the real danger of Brexit is we will end up with higher interest rates, lower house prices, and a lower exchange rate - and I thought 'dream on' - because that's what we've been trying to achieve for the past 3 years and now we have a chance of getting there.

http://news.sky.com/story/lower-pound-a-welcome-change-says-former-bank-chief-lord-king-10612690

 

 

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