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House Price Crash Forum


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About james_chch

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    HPC Newbie
  1. Just a thought here, would it be that bad? I was thinking about this, and isn't it the case that RPI includes mortage interest? So if the BOE switched to targeting RPI, and they then raised IR's, that would feed through pretty quickly into higher RPI, so they'd have to raise rates further? Particularly as there must be a lot of people now desperately glued to trackers. A rise in IR's would make quite a big difference in mortgage interest payments. Of course if I've got that right, then it explains why they are only talking about doing it at some point in the future. It would make the crash faster if they switched to using RPI while still at near-zero IR's. And as I mentioned earlier, at the moment they aren't targeting inflation at all, so it's all a bit theoretical.
  2. Yes, but given that they are hardly even pretending to target inflation, it may be a moot point. If you totally ignore a measure which includes house prices, is it any different to totally ignoring a measure which doesn't?
  3. And that change presumably made the bubble worse, although exactly how much of a difference isn't clear (well, not to me). Would the bubble have only been 90% of the size otherwise, or would it have been only 50%? Also, it's looking a lot like Merv is pretty desperate to get blame shifted away from him. IIRC he didn't really do much to point out the fact that the biggest bubble in history was inflated on his watch. Eg: Q486 - Asian savers/ world interest rates. Nothing to do with me. Q487 - I was only following orders. btw I'm not suggesting Gordon Brown was competent or sane, but he's not the only culprit.
  4. First they deny we're being misled: But just a couple of lines on: Well, which is it? If they're adjusting the formula "to conceal the full extent of domestic price escalation" then they are deliberately misleading the public.
  5. So the EU and IMF told Greece it must fight vested interests? Have they no sense of irony?
  6. Madness. Although at least she isn't leveraged. It's not the size of the investment that determines if it's a disaster, it's how much of her total wealth that 30k represents. "there must be some risks". It's just priceless isn't it. You can almost feel sorry for BTL patsies investors
  7. Sorry I can't recall specific examples. I have read some of his columns over the last year or so, and these days I don't go there for investment advice, I go there with a kind of morbid curiosity as to what form of financial suicide he's suggesting this time. I read the Santander one and shuddered. To give him credit, he did back it up with at least a plausible argument.
  8. Would I be correct in guessing that the two options were at the same interest rate? If so then that may be where the problem lies, as the lender isn't pricing risk properly. The IO loan where the lender takes on the risk that your repayment plan is lousy should be at a higher interest rate, reflecting that risk.
  9. It's an important step, but don't open the champagne just yet. You still need people to start chains off - BTL or FTB would do equally well. If it's just people who buy one house and sell one house, there's an issue with needing very long chains, so the market won't move very quickly.
  10. I saw that too. And what puzzled me a bit was according to an IMF press release the rate on the IMF portion of the loan is between 3% and 4%. And the breakdown acccording to Bloomberg is: "Ireland said it will pay average interest of 5.8 percent on the loans, which break down into 45 billion euros from European governments, 22.5 billion euros from the IMF and 17.5 billion euros from Ireland’s cash reserves and national pension fund." Which I make to be about 9.2% on the contribution from the European governments. Presumably I've missed something, as that is just market rate.
  11. Good point, I'm sure you're right on that. Over here in NZ, the property market started to fall quite fast, and then bounced. Definitely nothing to do with the BoE there. Not to mention which, the bubble inflating in the first place had a lot to do with the Fed. Greenspan has quite a lot to answer for.
  12. Just being cynical for a second, I think the main point of getting future generations to pay is that they don't have a vote.
  13. I would also suggest it's the opposite. If it's your own currency you can print money, keep interest rates artificially low to prop up bubbles, and devalue to attemp to inflate your way out. If you can't control these things, it limits your ability to rig the system.
  14. Not trolling at all, just prodding at the notion that the Euro is inherently flawed and responsible for Greece and Ireland's problems. Your points are perfectly good, but that just demonstrates that trade within the UK or US is a lot easier than within the Eurozone. Surely the critical bits are how wealthy the different areas are and what they produce? And that varies widely within the US or UK, just as it does in the Eurozone.
  15. A lot of that I'd agree with. (Athough I'm not nearly so optimistic that the UK banks are fixed). But this all suggests that Greece and Ireland's problems aren't 'because they joined the Euro' which seems to be a common thread in the media.
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