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House Price Crash Forum


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About Biriani

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  1. In fact, it was the elected ******* in Europe that voted to remove the veto (ie the European Parliament - the one bit that we actually get to vote for). The Council and Commission (unelected bits) had come to an agreement that preserved the veto, which unions and employers federations had signed up to.
  2. Loved the presenter's face when those mugs at the seminar told him they were going ahead and buying.
  3. Given that they're doing this because of the risk of massive debt default and banks desperately scrabbling for cash so they can remain liquid, in this particular instance I don't think an extra £5bn is going to cause much inflation. After all, it's hardly likely that the banks that are taking it (for 3 days) are going to turn around and lend it straight back out to the general public.
  4. Goodhart has some sound views. He's being going on for years about the need to make bank reserve requirements procyclical (ie put aside more money in the good times, and let them run it down in the bad)
  5. I missed that, but try here: http://cartoonbox.slate.com/hottopic/?imag...amp;topicid=155
  6. Easy basic answer to that question. Only 28% of UK employees are Union members, and collective agreements cover less than 20% of private sector workplaces. If you're not in one of those firms, good luck getting an above-inflation settlement during a recession... http://nds.coi.gov.uk/environment/fullDeta...epartment=False
  7. Globally, what you say is true. But for a nation, let alone an individual, it isn't. First, I might not consume much of the product where overseas productivity gains are taking place. Second, the increased consumption of overseas workers might directly compete with things I want to consume. Third, it may even be that my employment competes with the overseas workers, so there is less demand for my labour. Seeing how all this manifests itself in reality probably comes down to looking at exchange rates, savings ratios and terms of trade, which I won't pretend I can do. The basic fact though, which I think as a society we have not acknowledged, is that there is nothing in the laws of economics that entitles us to our standard of living, if other societies competing for the same scarce resources outperform us. Rising commodity prices are just a symptom of this, and thinking that we can just pay ourselves more to compensate is delusional. Note that this ISN'T an argument for protectionism and against globalisation. Given the inevitable rise of India and China, we will still be better off with free trade than without it, but that doesn't necessarily mean there won't be some pain along the way. Krugman had a good post a while back that touches on some of these issues. I recommend reading his work for anyone interested in the effects of trade and globalisation. http://www.nytimes.com/2007/12/28/opinion/28krugman.html
  8. Not necessarily. Why should your “contribution” be assumed to deserve a fixed or only growing share of global output? The uncomfortable reality is that if people elsewhere in the world manage to increase their productivity, they will get a bigger slice of the pie. Yes, the pie may grow overall because of their increased output, but as an individual the size of your slice could shrink. Why do we in the West feel that our entitlement to a given standard of living for our “contribution” is any greater than that of people in developing countries? And how can we possibly argue on equity grounds that manual workers putting in 60 hour weeks in China should be denied the opportunity to add meat to their diet if it means that our dinner goes up in price?
  9. But that is the (rather unpalatable) reality of the situation. The main component of inflation has been rising global commodity prices. We have virtually no control over them. Permanently higher commodity prices imply that our standard of living will be lower. Deal with it. Higher short term inflation is inevitable. There's no need for higher long term inflation provided we contain inflation expectations and don't let the money supply get out of control. Setting interest rates at a level that achieves that without subjecting the economy to unnecessarily bad recession will be tricky, but not impossible. Added caveat - there may be more unpredicted shocks out there that could totally b*gger up everything said above.
  10. If this is what I think it refers to, it underlines the ignorance and stupidity of the proposal. The only place £50bn has previously been mentioned is in relation to the size of the special liquidity fund the Bank of England is providing. In no way is this actual expenditure, and you certainly can't siphon off £2bn of it to just give to local authorities.
  11. You should also bear in mind that their comments go up with their name and firm next to them. If they're too pessimistic (realistic) there is a risk that potential buyers will pick up on their comments and make reaching a deal with sellers even more difficult than it already is.
  12. Given the new liquidity regime, it doesn't mean much to say that the BoE are "involved" - ALL banks who do mortgage lending are likely to have made use of the new facility, simply because it offers fairly priced access to the liquid securities they need to do business. The real question would be whether any extra lending has been extended to B&B above and beyond what is available to other banks. Given that most problems short of complete insolvency can be addressed through the new BoE liquidity facility, I suspect this is actually quite unlikely.
  13. As other posters have pointed out, Spain would only leave the Euro for the purpose of cutting interest rates, devaluing the currency and trying to kick start their economy back to life. I think the biggest practical problem they would have in trying to do this would be how to handle the currency swap, given that anyone holding Euros would have a huge incentive to hide them under the matress / take them across the border and wait until the devaluation before swapping them back into "new" pesetas. Why would anyone leave their Euros in a Spanish bank account and wait for it to become worthless? The implications of this would be a complete collapse of the spanish banking system, massive capital flight and huge distributional inequality between those who had euro-denominated assets that avoided redenomination and those who didn't. Interestingly, it would be much easier for a country at the other end of the economic scale to leave the euro - ie one which has an overheating economy with a current account surplus, and needs higher interest rates and revaluation.
  14. He really can't do contrite anywhere near as well as blair did, can he? No real admission of the mess we're in, yet everyone watching knows it's true.
  15. Marr just threw the accusation that the good times in the last 10 years were built on HPI and spiralling personal debt. Not even a flicker of recognition from brown - immediate denial and claims that it was actually based on solving the inflation problem "which we had inherited from our predecessors"
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