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House Price Crash Forum


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Everything posted by _w_

  1. The rate for Itlian bonds is currently set by no one other than the ECB. Monti went to see Merkozy asking for some freebies and easier austerity conditions. He was told to go back to his government to tell them to grow up. Wouldn't this be the incentive?
  2. This is such an oft repeated misconception. People forget the inflation / devaluation circle jerk increases the amount of devalued currency in circulation. Each drachma or Lira may be worth fewer deutsch marks but their number is increased (it's the original reason for the devaluation): the overall purchasing power of the inflating country is not reduced. All it does is redistribute the wealth around in favour of people who know how to benefit from inflation. In other words, the greeks would have drachmas worth less than euros but would have more of them to keep buying BMWs in aggregate.
  3. Yes, A* for drama and fictional creativity. You'd think the DT had turned into the propaganda arm of a government desperate for Europe to inflate...
  4. Quite the opposite. Some bull and bear markets have lasted for eons. The emprical data you refer to is mostly non existant IMO, usually the result of people trying to identify patterns in seemingly chaotic data (we are wired to find patterns and will always find some, it's an evolutionary trait). The mistake is trying to find endogenous factors for price behaviour when those factors are perhaps always exogenous. A one hundred year war will give you a one hundred year commodity bull market, a four year war a four year bull market, that is empirical data, not identified patterns on charts. Some deflationary phases in middle age Europe or at the time of the Roman Empire lasted for centuries. Bonds or their equivalent were a very good investment for the duration, possibly the longest bull market in history. To assume there is fixed time span or preset price range for trends is ignoring real world factors and in my limited experience, it is always a costly mistake. Anyway, I am not supporting bonds as an investment, you've got the wrong idea. I find the article interesting because of the nature of the analysis and the duration of the investments covered. I didn't post it to suggest people should invest in bonds, that's the last thing I'd do: too risky for me and I generally don't like investments that guarantee a non return _of_ capital after inflation.
  5. While printing because even with raised rates no aside from captured insurance and pension funds would want to buy those bonds, yes. This assumes investors are given an alternative which is a big if. Since the 1920s western CBs have been on the whole quite good at coordinating their actions to suppress the devaluation signals and alternatives. We also never had such a need to inflate as now.
  6. Thinking this is the mistake I made immediately upon reading the piece. Basing your view of the situation on duration of a bull/bear market and current price is very tempting but wrong. Sometimes price doesn't matter, exogenous events only cause trend changes. I'm beginning to think that this might apply all the time.
  7. Yes, and those supposedly in charge let them overprice themselves for the sake of a few votes at the next election. Knowing full well that there would be hell to pay at some stage.
  8. What videos? Looting to me brings up swords, hairy guys and raped virgins. It must be me...
  9. A lot of discussions revolve around gold's long term returns vs. other asset classes. This is not about gold but it fits in quite well with the topic. http://www.zerohedge.com/contributed/bond-bull-sees-more-deflation-ahead
  10. Everyone. Edit: Every investor. All your left with are the fast speculators who don't buy bonds anyway.
  11. There is one set of people more careless about inflation than central banks: politicians.
  12. You give people one inkling of a signal that there is an alternative to losing 3%++ a year guaranteed on gilts and they will rush for the alternative.
  13. Yes indeed but a bit longer term than the next few weeks or so... The only problem is the banks' perma-insolvency, how are they going to handle that. But on the sovereign side of things the problems are rather tame.
  14. You sound as though Club Med countries have a generic pre-condition that would stop them from being financially sound. Look at the history of these countries, every single one of them was at one time or another a world shaper. The current situation, the pervasive political corruption and impact on the rest of the population does not have to be permanent. It would take time but it can be changed.
  15. http://www.zerohedge.com/news/revisiting-todays-failed-bund-auction-less-meets-eye
  16. Once the panic subsides in Europe (if it does) the UK would experience a flight of capital to Europe. Higher interest rates and healthier economic prospects would prove irresistible for capital looking for safe heavens. What would remain in the UK would be the speculating hot money to play the inflation game. That would likely force us to raise rates (which isn't sure now that the government makes monetary policy decisions) as hot money has no interest in safe bonds. If we didn't we would be as vulnerable to hot money flows as your average third world country.
  17. Merkel looks like she has completely won the argument at the political level. I'm not sure but Sarkozy looks like he is ready to lose his next elections, he made a mention of giving priority to protecting citizens rather than markets but I didn't get all of it.
  18. Live, in French. h/t ZH http://www.bfmtv.com/rub/live/14/home/live/
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