Monday, Jul 21, 2008
Blanchflower laying the ground for an IR cut
Daily Mail: House prices could fall 30% in biggest crash ever seen in Britain, key Bank of England member warns
... and all the comments say Yipeee :)
Posted by voiceofreason @ 09:11 PM (1207 views) Add Comment
13 Comments
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1. paul said...
He's cried wolf too many times though, asking for rate cuts every time - the currency his comments carry is spent.
2. Mytimeisnigh said...
Property should be 3.5 of income. Anything more is a recipe for financial and moral disaster. What goes up must come down as per the business cycle that governs all investments at all times. Property will fall by more than 30% to reach its long term average. This guy is trying to panic people, because he believes interest rates should be cut, but this would be financial suicide as inflation would make life hard for everyone, not just the financially incompetent who have overstretched themselves on the basis that property only ever goes up. Well it doesn't and those that try to prolong the bubble will just prolong the pain.
I posted the above on the comments section on the mail article too.
3. whiteknight said...
Ah.. there he is.. the chappie.
4. icarus said...
He said prices are 30% higher than what is 'justified by fundamentals'. Isn't that a good argument to let them fall by 30%? After all, 'fundamentals' means wages and affordability.
5. sovietuk said...
Headline should read "Tax payer funded idiot thinks the only way to run an economy is to print more money"
6. Planning4acrash said...
If Branch-Flower-Power has his way, Sterling will fall another 50%, and, problem, reaction, solution, we get the Euro stuffed into our wallets by the traitor political class.
7. This comment has been removed as it was found to be in breach of our Blog Policies.
8. malct said...
Me? I've no idea and no opinion!
just bumped into it after eastenders
9. crash bandicoot said...
This interest rate cutting to support the market routine is missing the point. It's only worthwhile stretching yourself to meet the monthly payments while values are going up. The £20-30 off a month that the 0.25% cuts give you are more than made up for by holding off another couple of months before buying. You can see for yourself the difference that aggressive rate cutting makes (not a lot), by looking at the USA, or is there still anybody who really believes that it's different here?
10. Panda said...
For the crash to do any good, 30% is far too small. Restoring things to a reasonable level? Try decreasing prices by 85% (i.e. prices drop to 15% of their current value) and taxing multiple home ownership some 300% per annum.
A modest proposal, n'est pas?
11. mark wadsworth said...
Crash B, that is a good point re USA, but how do we know that prices wouldn't have tanked even faster>
12. Ten Years To Get My Money Back said...
Perhaps his theory is that if inflation rises causes everything else INCLUDING WAGES to go up 30%
and house prices stay static then balance will be restored and houses will be affordable.
I've just been reading the Back to the Seventies posting and thats what happened then.
:- Duncan
13. icarus said...
mark w - but it could be that, irrespective of how fast prices crash, they will end up at a given, very low, level. Is there much difference between a slow-motion train crash and a very-slow-motion train crash?