[LandOfConfusion]

Where is my pen?, on 04 March 2010 - 02:15 PM, said:

unfortunately i have to agree with you. we have had only about a 10% nominal fall so far, and this is now 2 years since the peak. what happens going forward i do not know, but so far, house price crash (circa 2004) has been DEAD wrong.

Well, let's be fair. This government has essentially spent on our behalf, run up massive deficits and ultimately made the problem a lot worse. In the two previous crashes we've had Tory governments who seem to of been more fiscally prudent* and this fact alone allowed the market to correct.

* Yes, I know what they tried but they didn't put the the country at risk by doing so!

Where is my pen?, on 04 March 2010 - 02:15 PM, said:

the rampant money printing that was forewarned did come to pass. the ridiculous interest rates also. a whole year now at 0.5%. this is not the kind of environment where crash predictions are all that wise.

Agreed but what happens next? QE, 0.5% IR's and massive government spending cannot go on forever. And even with all of them they've only managed modest rises in HP's, with many still not able to sell.

Where is my pen?, on 04 March 2010 - 02:15 PM, said:

but there is time yet. always more time.

And and election looms. We shall see.

[LandOfConfusion]

Where is my pen?, on 04 March 2010 - 02:21 PM, said:

here is the sign of the times.

"No fresh aid for economy from rate-setters" - so 0.5% IRs for a whole year is apparently considered a neutral stance!

Mortgage rates have disconnected from the base rate, so this means little or nothing (IMO).

Where is my pen?, on 04 March 2010 - 02:21 PM, said:

Meanwhile house prices also registered their first fall in nearly a year during February, according to house price surveys from Halifax and Nationwide.

This is only one month's falls and from one source. I personally wouldn't read into it too much.

Where is my pen?, on 04 March 2010 - 02:21 PM, said:

Members of the MPC have also dropped hints that more QE could be in the offing if the recovery fails to gain traction and the threat of a dreaded "double-dip" recession looms.

Translation: **** sterling, we are going to print more. We just need an excuse.

Where is my pen?, on 04 March 2010 - 02:21 PM, said:

it is not like they pull any surprises. they have said all along what they would do, and they have done so. what surprises me is that people (all over the world, apparently) seem not to believe it and continue to accumulate bonds and checking deposits bearing these ridiculous massively negative real interest rates!

Pension funds are required (by law) to buy British government gilts so that's one major buyer ID'ed already. As for the others, I suspect that central bank exchanges are happening. After all, the main reason for buying government gilts is the security. But what security do UK gilts offer? A guaranteed loss?