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mattyfc

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Everything posted by mattyfc

  1. http://www.bbc.co.uk/news/business-13310841 These figures seem pretty positive to me Fairly huge rise in commercial vehicle sales indicates businesses are actually doing rather well. Far better than the mainstream narrative would suggest. Nothing to do with keeping IR down of course...
  2. Yawn, so predictable the Tories have the £ that made the NO result a certainty. I can see why the LD may be pissed off as they never had a hope in hell. The arguments for AV were never made properly and the election was hardly a fair fight.
  3. http://bmobile.reuters.com/article/rbssFinancialServicesAndRealEstateNews/idUSLDE7440EN20110505 http://www.xe.com/news/2011/05/05/1878789.htm?utm_source=RSS&utm_medium=TL&utm_content=NOGEO&utm_campaign=News_RSS_Art6 http://af.reuters.com/article/idAFN0511221020110505 This actually makes some sense having thought about it. Greek tax revenues are falling and are below 2010 levels, unemployment is rising, retails sales plummeting, construction has fallen off a cliff (new building permits plunged 62.8% y/y for January). Cement production is running at levels last seen in the 60's. The rule of law is breaking down and a 10 day illegal strike will be held for petroleum workers. The economy is heading for collapse. Meanwhile the € has been trading at near $1.50, interest rates have risen (nice one Trichet). The Greek government have probably realised there will never be an economic recovery whilst they are in the €. Better to force default flush the € now and recover more quickly. Germany etc would have to support as uncontrolled default would wipe them out as well. If the meeting is about restructuring. What is the point, the Greek economy needs to grow, how will restructuring help. Even if the haircut was 100% the debt would be back in a decade or two. The IMF have no doubt realised this as well. There will be no primary surplus whilst Greece is in the €, no escape, no hope collapse will be inevitable.
  4. This is a very good idea in principal, getting the Greek economy back to growth should be the priority. Would you take a holiday in Greece if it was 75% cheaper than now? Major disadvantage however: How do they plan to leave exactly? The new drachma would immediately become toilet paper, all their debt is denominated in € if they changed Greek law to force it in to new drachmas the contagion would be enormous. Who would be next, Portugal, Ireland, Spain? the run on these countries would start immediately. Massive financial collapse would follow. They would need massive capital controls for a month or longer and support from Germany, France and I can't see it happening. More likely, Greece threatens to leave and default so Germany decides to leave instead. The DM is reissued and the ECB is reformed, huge QE programs takes place the old € crashes, has the same effect as the new drachma without the financial collapse.
  5. Not sure how the SNP would expect Westminster to accept independence. The labour party would be stuffed, they seem to control 2/3 of the seats and I can't imagine them being too happy to lose them. Cameron does not sound keen either:
  6. Well I hope the irony of this is not lost on Labour. SNP seem to be succeeding with wild spending promises that will be impossible to fund. Spend, Spend , Spend what is there to worry about...
  7. Ah the truth, spending is rising every year. The total level of government spending is not being “cut” at all and is rising £40bn over the parliament. Always amazed how everyone buys the “austerity” line when Osborne is doing nothing of the sort. I suppose “increasing spending very slowly” does not have the same ring to it. By bailout I assume he means more QE. Monetize a few more hundred £ Billion. No problem if a loaf of bread costs £20 in 5 years.
  8. Brent down $10 today to $110~ !, near on 9% fall now. Started the week near $126 4% Fall in German factory orders, Large US weekly job claims. Boom down go commodities Main thing supporting was dollar debasement. QE2.5 could reverse the drop. The supply / demand dynamics never supported such a high price and it will be interesting to see how far the correction goes. I reckon Brent will go down to $90-100, total guess though really. Probably will see a bit of a fall at the pump once it filters through.
  9. http://www.telegraph.co.uk/property/expatproperty/8492815/Spanish-minister-claims-property-is-safe-to-buy.html Helen Prior would probably disagree: http://my.telegraph.co.uk/expat/annanicholas/10142990/buying-in-spain-is-not-as-safe-as-houses/ After all you can’t go wrong with bricks and morter?
  10. http://translate.google.co.uk/translate?hl=en&sl=es&u=http://www.cotizalia.com/&ei=CMW_TdQHiJnxA5-smdwF&sa=X&oi=translate&ct=result&resnum=1&ved=0CDUQ7gEwAA&prev=/search%3Fq%3DCotizalia%26hl%3Den%26pwst%3D1%26biw%3D1280%26bih%3D904%26prmd%3Divns More good news to go with the retail sales, unemployment and house asking prices falling at the fastest rate since 2003. No doubt the Spanish will welcome further ECB rate hikes and will have no problem paying back all outstanding mortgages and foreign debt..
  11. Greece can easily default on its debt, the fact that it is in the € is irrelevant. The only reason they did not already is that Greek banks and pension funds hold €60bn of the debt. They would restructure immediately if this was not the case. The profligacy was the result of a corrupt system of government, the EU letting Greece in the Eurozone in the first place and the stupidity of German, French etc banks who lent €325bn to a country which was never in a position to repay it. None of this is the responsibility of Greeks ordinary citizens so why should they pay for it? Punish the bankers, the Greek government and the EU who allowed this to happen.
  12. Did you even look at the latest trade figures? http://www.statistics.gov.uk/cci/nugget.asp?id=199 http://www.statistics.gov.uk/pdfdir/trd0411.pdf You may notice that the trade deficit has narrowed sharply in the last two months. You may have also noticed that the improvement in trade is not being driven by the Eurozone. If this trend was to continue the balance would be 0 in Q3. The US is are single largest trading partner (13.7%) The Eurozone makes up 44% the rest of the EU and world 42.3% from your own link.
  13. The figure for new UK orders is slightly concerning. Then again the spike to 65 in January could indicate that there was a bit of over ordering that is now correcting itself. Export orders and Employment both improved. The figure is still above the long run average and I will be interested to see if the figure of UK orders bounces back in May. The other interesting thing is that in the ROI Manufacturing PMI strong growth was attributed to orders coming from the UK. What is most surprising is the Markit commentary which is almost entirely negative and follows the general UK narrative of ensuring sentiment is kept down to ensure IR do not rise. Almost as if an organised campaign is being waged to take pressure of the MPC.
  14. Evidence already coming in from Spain. Prices dropped the most since March 2003, down 0.9% in April. This index is clearly nonsense as it is saying the peak to trough is only -15.6%. I believe it is based on asking prices which may explain it. http://translate.google.co.uk/translate?hl=en&sl=es&u=http://www.cotizalia.com/&ei=BKa_TY_FEcSxhAfWz-S2BQ&sa=X&oi=translate&ct=result&resnum=1&ved=0CC0Q7gEwAA&prev=/search%3Fq%3DCotizalia%26hl%3Den%26pwst%3D1%26biw%3D1440%26bih%3D704%26prmd%3Divns
  15. Agree, at least he is honest. Raising interest rates would be suicidal with consumer confidence so low and it would give house prices a nice push downwards. No IR rise till August at the earliest unfortunately. We will be able to get a fairly good idea of what will happen to prices from the ECB laboratory. Ireland and Spain both had bubbles similar in magnitude to ours and are already dealing with a rate rise. Probably one or two more before the end of year also. If prices drop like a stone you can be sure the same thing would also happen here.
  16. Only borrow what they can afford to repay? Greece can repay it's debts? Looks like Germany, France will probably get landed with the bill. Would this have happened with the Drachma, not likely the interest rate charged to Greece would have prevented the debt build up in the first place. Being allowed to borrow at "German" levels of interest caused their debt crisis. That and there creditors assuming default was impossible regardless of Greece's level of debt.
  17. http://www.iol.co.za/business/international/greek-debt-maturity-extension-possible-ecb-1.1063298 http://www.zerohedge.com/article/meanwhile-europe-true-finns-just-say-no-greek-bailout http://news.yahoo.com/s/nm/20110502/bs_nm/us_greece_debt The true Finns seem to have realised that constant extension and more loans will not solve anything. I wonder how long this slow motion car crash can go on before anyone figures out a real solution? Not surprisingly the next move looks like being a maturity extension for Greece. Since Greece has to fund €30bn next year and no one has worked out how yet. More bad news out today. Spain is having problems raising tax revenue and the Manufacturing PMI signalled further job losses and weak output growth. http://translate.google.co.uk/translate?hl=en&sl=es&u=http://www.cotizalia.com/&ei=QMe-TbKdKcmy8gPn5ZXcBQ&sa=X&oi=translate&ct=result&resnum=1&ved=0CC0Q7gEwAA&prev=/search%3Fq%3Dcotizalia%26hl%3Den%26pwst%3D1%26biw%3D1440%26bih%3D704%26prmd%3Divns http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=7961
  18. How is mortgage interest different to rent exactly? Is it a tracker and did she consider what would happen when IR rise. Stable job in the city, did she blank 2007/8 from her head. This is the real problem with low IR, the madness continues, people remain in the "bubble" and are clearly delusional. They are only being set up for a big fall down the line and will cause us further economic problems when they inevitably default. The BOE should raise IR for this article alone, it is pretty scary that even with the crash so little thought is put in to big financial decisions. The bit about mortgages should have the BOE and FSA terrified.
  19. http://www.minyanville.com/businessmarkets/articles/voodoo-economics-quantitative-easing-qe2-monetary/4/21/2011/id/34074 What do you think will happen as prices rise? The primary effect of a shock rise in commodity prices is price inflation the secondary effect is wage inflation as pressure is put on employers, which will lead to further price inflation and an upward inflation spiral. This will happen very slowly as unemployment in the US is pretty high, it will happen eventually though. This is what Sentance and other Hawkish MPC members are trying to prevent. (http://www.skynewstranscripts.co.uk/transcript.asp?id=966) QE only creates inflation and makes everyone poorer, no wealth is created and future wealth creation is probably stunted by higher inflation. Wages will rise in time though, real purchasing power will not change. In a debt crisis as long as the debt maturity is long enough (UK & US?) the benefit of QE is pretty clear. The value of debt stays the same, wages, prices rise so the debt is easier to pay.
  20. Yes tanks, no one can force the Irish, Greeks etc to pay these ridiculous debts unless they are prepared to use force. If I was the Irish, Greek, Portugese PM etc I would phone up the ECB, Merkel, Sarkozy, Cameron etc and tell them all to get stuffed. Probably phone the financial press as well to turn up the pressure. The government are meant to represent their citizens and they are frankly doing a crap job of it. Why would they agree to these ridiculous bailouts? Who is being bailed out exactly? The creditors have equal responsibility for the debt, unless a plan was formulated that involved putting citizens back to work, economic growth and some kind of reduction of the debt you may as well not bother. Default is the better choice than being slowly driven in to the ground, at least you have a ray of hope once the debt is gone. As the saying goes If you owe the bank $100 that's your problem. If you owe the bank $100 billion, that's the bank's problem. Very much applies here I think.
  21. http://www.independent.ie/opinion/analysis/ecb-is-leading-ireland-and-the-eurozone-to-disaster-2634443.html Very good article, as we all know the Irish don’t like being pushed around. They are realising the utter futility of the current ECB / Eurozone policies. Something has to be done as political instability in the countries will probably lead to popular demands to screw the creditors and default. They are sovereign countries not slaves. Unless the ECB / EU are prepared to send in the tanks and take control, the Irish, Greeks etc actually have the power. They should simply refuse to pay another cent until a policy with some light at the end of the tunnel is devised. The current situation with the creditors refusing to take responsibility for their terrible lending decisions is simply unacceptable. Something is going to have to give.
  22. This total DM trash. Most of the migrants who come here come to work, they are the only people keeping the SE going as far as I can see. In London there are virtually no English people working in the service industries. It is the native population that seem wedded to benefits not the vast majority of immigrants. Not sure how the EU single labour market will survive long term though. Language presents a massive barrier to work for most in France, Germany, Italy etc Since almost every country uses English as its second language we are at a massive disadvantage. We get flooded with English speaking economic migrants and it is not possible for us to do the same as we don't generally speak German, French, Italian etc.
  23. This article is nonsense. In a normal economic situation inflation is bad. However, this is not a normal situation. The US spent a decade borrowing and bidding up house prices to unsustainable levels. Prices have crashed but the debt remains. It has to be paid somehow, inflation is the obvious answer. QE will not create wealth, it will create inflation though. The US needs inflation, this is the point of QE2,3,4 etc IMO. Nominal GDP growth needs to be pushing towards double digits to have a hope in hell of paying off the US private / public debt mountain. Bernanke is not as stupid as he looks or seems. IMO he is perfectly aware that printing cash will not create jobs. What it will do is eat in to the debt mountain created by a decade of mal investment in the housing market. At least the US is dealing with the real problem head on. House prices have been falling for 5 years and are still going down. Once they bottom and the working population finds it is spending a tiny fraction of disposable income on housing the US economy will start to recover. This is the best way to tackle the crisis IMO. No wonder Gold, Oil, Stocks etc and other commodities are flying. The only escape from $20trn of debt is to reduce the value of it so what is left of the real economy will be able to pay it off.
  24. http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/8481137/What-will-bring-life-back-to-the-housing-market.html This article is so stupid it makes me want to cry! An utter disgrace, can journalists no longer think for themselves? No wonder the telegraph's circulation is in double digit decline. The obvious conclusion that prices are too high and need to / will fall is completely ignored. Did these people not notice the banking crisis (Northern Rock?) in 2008. The bank insuring itself by asking for a descent deposit is common sense. They need a buffer as house prices can fall as well as rise. Those with little deposit are penalised, the bank is pricing the extra risk it is taking. Very simple?
  25. Greek retail sales also down 10.6% y/y for Feb. (http://www.xe.com/news/2011/04/29/1867481.htm?utm_source=RSS&utm_medium=TL&utm_content=NOGEO&utm_campaign=News_RSS_Art13) Not sure how long everyone is going to ignore the obvious problems staring them in the face. Austerity in an economy already suffering a debt crisis with no means of adjustment will destroy the economy. The policy mix for Spain is pure poison. Massive austerity, rising oil prices , a strong currency and rising Interest rates. Expecting more bad news for the foreseeable future . The Spanish government should be asking for help, instead they are living in blind hope of some improvement refusing to admit there is a problem.
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