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Double-Dip Claim Childish And Should Not Be Paid Attention To

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http://uk.finance.yahoo.com/news/willem-buiter-double-dip-recession-won-t-happen-despite-worry-of-noisy-market-tele-0622273817ae.html?x=0

Willem Buiter: double-dip recession won't happen despite worry of 'noisy' market
Angela Monaghan, 21:31, Wednesday 7 July 2010
Willem Buiter, chief economist at Citigroup (NYSE: C - news) and a former Bank of England policy-maker, said he does not believe there will be a global double-dip recession.
He said that the process of fiscal tightening planned in many countries was necessary but unlikely to tip economies back into contraction.
In recent weeks mounting fears of a double-dip have driven markets down, despite the fact economists widely believe that it is unlikely.
Mr Buiter said: "
I view the markets as noisy children
. You have to pay attention to them but you shouldn't take them too seriously. Markets have predicted eight of the last three recessions."

Yet another "blue skies forever" view of the market. DOW certainly bought into it heavily today with 200+ point gain and an even bigger gain expected tomorrow.

If there is no double dip there will be no HPC in this country and that is 100% guaranteed and certain.

When will we know if the huge turnaround in sentiment today compared with yeaterday is real? Give it another 90 days and by that time we will know one way or t'other. If HPI is back on I would recommend anyone who wants a home to their own to emigrate to the US, Canada, Oz or NZ if you have the money and qualifications. I will probably buy a retirement home in the US and bugger off when my job here ends.

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http://uk.finance.yahoo.com/news/willem-buiter-double-dip-recession-won-t-happen-despite-worry-of-noisy-market-tele-0622273817ae.html?x=0

Willem Buiter: double-dip recession won't happen despite worry of 'noisy' market
Angela Monaghan, 21:31, Wednesday 7 July 2010
Willem Buiter, chief economist at Citigroup (NYSE: C - news) and a former Bank of England policy-maker, said he does not believe there will be a global double-dip recession.
He said that the process of fiscal tightening planned in many countries was necessary but unlikely to tip economies back into contraction.
In recent weeks mounting fears of a double-dip have driven markets down, despite the fact economists widely believe that it is unlikely.
Mr Buiter said: "
I view the markets as noisy children
. You have to pay attention to them but you shouldn't take them too seriously. Markets have predicted eight of the last three recessions."

Yet another "blue skies forever" view of the market. DOW certainly bought into it heavily today with 200+ point gain and an even bigger gain expected tomorrow.

If there is no double dip there will be no HPC in this country and that is 100% guaranteed and certain.

When will we know if the huge turnaround in sentiment today compared with yeaterday is real? Give it another 90 days and by that time we will know one way or t'other. If HPI is back on I would recommend anyone who wants a home to their own to emigrate to the US, Canada, Oz or NZ if you have the money and qualifications. I will probably buy a retirement home in the US and bugger off when my job here ends.

Shame he's not still on the MPC. Might have been another vote for higher rates seeing as he's so optimistic.

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http://uk.finance.yahoo.com/news/willem-buiter-double-dip-recession-won-t-happen-despite-worry-of-noisy-market-tele-0622273817ae.html?x=0

Willem Buiter: double-dip recession won't happen despite worry of 'noisy' market
Angela Monaghan, 21:31, Wednesday 7 July 2010
Willem Buiter, chief economist at Citigroup (NYSE: C - news) and a former Bank of England policy-maker, said he does not believe there will be a global double-dip recession.
He said that the process of fiscal tightening planned in many countries was necessary but unlikely to tip economies back into contraction.
In recent weeks mounting fears of a double-dip have driven markets down, despite the fact economists widely believe that it is unlikely.
Mr Buiter said: "
I view the markets as noisy children
. You have to pay attention to them but you shouldn't take them too seriously. Markets have predicted eight of the last three recessions."

Yet another "blue skies forever" view of the market. DOW certainly bought into it heavily today with 200+ point gain and an even bigger gain expected tomorrow.

If there is no double dip there will be no HPC in this country and that is 100% guaranteed and certain.

When will we know if the huge turnaround in sentiment today compared with yeaterday is real? Give it another 90 days and by that time we will know one way or t'other. If HPI is back on I would recommend anyone who wants a home to their own to emigrate to the US, Canada, Oz or NZ if you have the money and qualifications. I will probably buy a retirement home in the US and bugger off when my job here ends.

New Zealand has a HPI problem as well and it is far from cheap to live. The weather is better and there is more space, but if you're after an affordable home dont bother.

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http://finance.yahoo.com/news/Goldman-Strategy-No-Dip-cnbc-2363417558.html;_ylt=Akg2EgyOB_PKNUYeZ5HR_cC7YWsA;_ylu=X3oDMTE1MWM0MmsyBHBvcwM1BHNlYwN0b3BTdG9yaWVzBHNsawNnb2xkbWFuc3RyYXQ-?x=0&sec=topStories&pos=3&asset=&ccode=

Goldman Strategy: No Dip, Double Up
The report points out that a double dip recession has happened only twice, in 1981 and 1931, with a tightening of monetary policy the common denominator in both. "We believe that it is highly unlikely that the Federal Reserve will tighten monetary policy anytime in the foreseeable future."
Not all investors agree in this thesis. "Just because double dips are rare does not mean they cannot occur," argues Brian Kelly, founder of Kanundrum Capital. "The distinguishing characteristic that makes this recession and recovery different is the popping of the credit bubble.
Credit is the engine of the economy and has been growing exponentially since WWII - it is now declining. Without credit growth, the past assumptions about an "average" recovery are completely invalid."

This is the toughest market I have ever seen and I am totally and utterly perplexed. My gut instinct is that the double dip is on and the traders are politicians are trying to talk it up to avoid the crash that the market still wants to redress imbalances and debt.

For now I am staying mostly in cash and bonds--especially if the credit is drying up because that spells the "D" word.

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This is the toughest market I have ever seen and I am totally and utterly perplexed. My gut instinct is that the double dip is on and the traders are politicians are trying to talk it up to avoid the crash that the market still wants to redress imbalances and debt.

For now I am staying mostly in cash and bonds--especially if the credit is drying up because that spells the "D" word.

There is no market any more in finance/economics - just a shell game and some pumpers. Longer term investors will not be touching this market, the execs are shifting lines of stock and the trading boxes are just chasing the market around. Special pump for when the pres is going to spout to keep him sweet and let him know they are in control and the ultimate benefactors and beneficiaries.

Meanwhile on the ground is a different matter - these clowns will say whatever suits their situation regardless. Meanwhile the US birth death model spouts out job creation - guess what - 60 odd thousand construction jobs in the US in the last two months alone - this at the same time that builders announce a full on collapse in new build starts.

It is all complete and utter rollocks.

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When will we know if the huge turnaround in sentiment today compared with yeaterday is real? Give it another 90 days and by that time we will know one way or t'other.

I very much doubt it. The huge attention from all players that this global event has attracted, facilitated and maintained by the internet and the many sites like this one, and people like Buiter and Faber are creating their own chaotic dynamic.

The willful illusion of the risk free rate has been smashed and it is changing the way people think from policy makers, investors and financial commenators to the man on the street.

You RB are looknig for certainty or imminent certainty, and I confidently predict that is the one thing you are not going to get.

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This is the toughest market I have ever seen and I am totally and utterly perplexed. My gut instinct is that the double dip is on and the traders are politicians are trying to talk it up to avoid the crash that the market still wants to redress imbalances and debt.

For now I am staying mostly in cash and bonds--especially if the credit is drying up because that spells the "D" word.

History's on your side, QE & such have only served to hide the structural problems for a short period. The sequential US/UK, China and then Europe QE all had an effect that should be rapidly diminishing. What some of the history books say though is that the path down tends to be uneven.

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I very much doubt it. The huge attention from all players that this global event has attracted, facilitated and maintained by the internet and the many sites like this one, and people like Buiter and Faber are creating their own chaotic dynamic.

The willful illusion of the risk free rate has been smashed and it is changing the way people think from policy makers, investors and financial commenators to the man on the street.

You RB are looknig for certainty or imminent certainty, and I confidently predict that is the one thing you are not going to get.

You are probably right. There are so many shrill voices out there all claiming blue skies forever after the double dip warnings started coming in thick and fast. The DOW moved massively on higher expected earnings growth. I am not sure where these earnings are coming from as everyone is cutting back, unemployment is still rising and China is even slowing.

I do believe we are living in an era of remarkable corruption and manipulation and it is probably wise to stand clear of the markets altogether and do your best with cash.

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It's' true that we've only had two US double-dip recessions in the last 100 years. The 1980-82 double-dip was driven by Volcker putting rates at 19% which is the diammetric opposite to what we've got right now. So historically at least a W-shaped trajectory is far less likely than a V-shaped or U-shaped one.

Given all the monetary and fiscal stimulus, one thing really stand out in this recession. That the US (and Western world as a whole) just can't generate any private sector jobs. The lack of new jobs is not new. The prior US recession suffered from a "jobless" recovery. The problem is the Fed hasn't yet realized that 9% unemployment is the norm and not an aberation. At some point they just need to accept structurally higher levels of long-term unemployment are the new reality and revise their models accordingly.

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It's' true that we've only had two US double-dip recessions in the last 100 years. The 1980-82 double-dip was driven by Volcker putting rates at 19% which is the diammetric opposite to what we've got right now. So historically at least a W-shaped trajectory is far less likely than a V-shaped or U-shaped one.

Given all the monetary and fiscal stimulus, one thing really stand out in this recession. That the US (and Western world as a whole) just can't generate any private sector jobs. The lack of new jobs is not new. The prior US recession suffered from a "jobless" recovery. The problem is the Fed hasn't yet realized that 9% unemployment is the norm and not an aberation. At some point they just need to accept structurally higher levels of long-term unemployment are the new reality and revise their models accordingly.

This makes sense. Perhaps the new norm is less and its just taking time to adjust to the new reality. The US are spending less on credit according to a report yesterday which demonstrates that the market is adapting to the new "austerity."

I am not sure that we are adapting to anything in this country though. House prices are still the highest in the world and we have yet to see any real signs of a crash. Banks are lending with minimal deposits (5% is common) and the hoped for 20% down requirement under a new responsible banking regime has simply not happened. 0% down and SI loans may be months, if not weeks, away if credit continues to expand.

http://www.telegraph.co.uk/finance/personalfinance/7874276/Prepare-for-the-second-credit-crunch.html

Mortgage availability has been softening a little of late, and there is even a mortgage available for those with
just a five per cent deposit.
Skipton Building Society is offering a first-time buyers’ mortgage fixed at 6.99 per cent for two years. Those with a 10 per cent deposit can currently get a mortgage at just under five per cent, fixed for two years, with the Co-op and Britannia.
“Nothing is going to happen overnight,” says Mr Hollingworth. “Clearly the banks do not see things getting any easier, but they may not get radically tighter. First-time buyers should not rush to get a property – this is a huge commitment and they need to get it right.”

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RB

The BIG one is the GDP figs.................If (& its a BIG if) they have been Screwed by Gordo than crash UK here we come..................but in any event the party is over .....1 million extra heading for the dole!

Mike

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The US are spending less on credit according to a report yesterday which demonstrates that the market is adapting to the new "austerity."

The real problem in the US is that there are two leveraged/indebted sectors of the economy (households and the govt/municipals) and one unlevered, cash-rich sector (multi-national corporates). The problem is the corporates simply aren't spending/investing but are sitting on piles of cash. They deleveraged in the last recession and have shown no interest to gear up this time round and step into the gap.

Price inflation is of concern in some countries (UK for example) ... but globally the velocity of money is still going down.

Edited by david m

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The real problem in the US is that there are two leveraged/indebted sectors of the economy (households and the govt/municipals) and one unlevered, cash-rich sector (multi-national corporates). The problem is the corporates simply aren't spending/investing but are sitting on piles of cash. They deleveraged in the last recession and have shown no interest to gear up this time round and step into the gap.

Price inflation is of concern in some countries (UK for example) ... but globally the velocity of money is still going down.

They are investing in Asia.

The US is too expensive. An imbalance the FED is hell bent on maintaining.

Edited by OnlyMe

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I do believe we are living in an era of remarkable corruption and manipulation and it is probably wise to stand clear of the markets altogether and do your best with cash.

if that remains the case for 100 years what will you do then?

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The real problem in the US is that there are two leveraged/indebted sectors of the economy (households and the govt/municipals) and one unlevered, cash-rich sector (multi-national corporates). The problem is the corporates simply aren't spending/investing but are sitting on piles of cash. They deleveraged in the last recession and have shown no interest to gear up this time round and step into the gap.

they are waiting for asian demand and asian megacity infrastructure build out.

that's what we are waiting for and hoping for where I work.

we are all waiting to see whether the asians are going to step up to the plate and take on the batton.

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RB

The BIG one is the GDP figs.................If (& its a BIG if) they have been Screwed by Gordo than crash UK here we come..................but in any event the party is over .....1 million extra heading for the dole!

Mike

The GDP figures may be being massaged as we type. Job losses are certainly a factor that ought to slow the market down but so far thjere does not seem to have been any impact on stocks, houses or anything else. Retail sales are booming, new cars sales are up 10% (25% up for fleets) and Sterling has bounced back a little. Austerity has been announced but no one is feeling it.

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I very much doubt it. The huge attention from all players that this global event has attracted, facilitated and maintained by the internet and the many sites like this one, and people like Buiter and Faber are creating their own chaotic dynamic.

The willful illusion of the risk free rate has been smashed and it is changing the way people think from policy makers, investors and financial commenators to the man on the street.

You RB are looknig for certainty or imminent certainty, and I confidently predict that is the one thing you are not going to get.

further to the above I offer this as an example of exactly what I am talking about:

Back in mid-May we were concerned that the Europarity Knights were getting a little over-excited and that the pathetic little bunny of the Euro, up for the slaughter, may put up more of a fight. And indeed since then the harmless Euro Bunny has beheaded a number EUR/USD short knights and it feels as though many more have run away. Both in FX and also in periphery spreads.

What is remarkable though, is the European Policy that has resulted in such a turn around, appears to be little more than the Timmy G's inspired "Shut the ****** Up". And believe it or not, it is actually working. What is more remarkable still is that they have been able to keep it up for so long. This Bunny is more like an ostrich. It’s as though this policy of burying your head in the sand has resulted not only with the Eurostriches ignoring where they are, but also with the market predators on their tails suddenly losing sight of them too, responding with a "Huh, where did they go? " and charging off chasing a weak US and limping China instead.

But how long can Europe hold its breath for? With a market much more balanced now in its perceptions of relative risks between US, the East and Europe, the Eurostriches may feel it safe to surface again. And if they do they may well find a confused market willing to take up the chase again having lightened their previous positions. So lets have a look and see if there is anything to tweak the nostrils of the predators...

First off, we have the bank stress tests which appear to involve seeing if they can take the stress of a feather laid gently across their backs and have as much validity in the real world as the UK educational qualifications. Or maybe they do turn out to be credible, but with far worse results than anyone was expecting. Team Macro Man cannot imagine the market taking headlines like " to take EUR30bn writedown on sovereign debt holdings, will receive capital injection from Soffin" or "S&P downgrades Deutche Bank to A-" particularly well.

Second, Thursday's ECB press conference has the potential to throw a tape bomb - Monsieur Trichet has never been particularly good at communicating. With the press having whipped itself in something of a frenzy with respect to the ECB's LTRO/MRO, term deposit auctions and sovereign purchase plan, TMM would not be suprised if there were some misunderstanding that led the market to believe that either (i) the ECB is about to sell its EGBs, (ii) that it might be about to cut rates, or (iii) that it is about to embark on QE (because, of course, they're not *really* doing it are they...).

Third, while Europe's economic data has thus far held up (in sharp contrast to that of the US), this morning's weak German factory orders perhaps provides a hint of tomorrow's Industrial Production number. Team Macro Man wonders how long it might be before they see the Bloomberg headline "German Current Account posts deficit for the first time since 2003".

And it looks like the market is about to grab Spain by the Cajas...

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The GDP figures may be being massaged as we type. Job losses are certainly a factor that ought to slow the market down but so far thjere does not seem to have been any impact on stocks, houses or anything else. Retail sales are booming, new cars sales are up 10% (25% up for fleets) and Sterling has bounced back a little. Austerity has been announced but no one is feeling it.

The average person on the street isn't feeling any austerity since it hasn't been delivered. The public sector spending review doesn't arrive till Oct so I can't see many people feeling the effects in 2010.

Austerity doesn't really impact the FTSE since most of the multi-nationals don't make their big earning streams in the UK anymore anyway (that's a gross overgeneralization true but increasingly valid). The FTSE cares more about the level of GBP and that has to bounce a bit higher since exchange rates are relative and the competition is looking increasingly as bad as us and its a world of competitive devaluation and why should the UK get a weak currency when the US and Europe want one aswell!

Edited by david m

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Patience is what is needed. the market never moves down in one go. The S&P and other stock markets got oversold, this is just a short term bear rally. Come on there was hardly any news to move the market in this way. Good time to get your short positions in. Have spanish banks suddenly got no bad loans on their books, are the troubles over for US states. These heavy mood swings remind me of the start of credit crunch 1.

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Mr Buiter said: "I view the markets as noisy children. You have to pay attention to them but you shouldn't take them too seriously. Markets have predicted eight of the last three recessions."

I'm glad we have the likes of Mr Buiter who evidently know far more than those simple childish markets.

And how many recessions has he correctly predicted?

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What does anyone expect the cheerleaders to say?...Our team are losers and arent even coming onto the pitch?

course not, they are shouting at the tops of their voices that they are gonna WIN!..bring it on.

It may be true the team are shite, but no PsTB can say this...

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New Zealand has a HPI problem as well and it is far from cheap to live. The weather is better and there is more space, but if you're after an affordable home dont bother.

I would recommend anyone who wants a home to their own to emigrate to the US, Canada, Oz or NZ if you have the money and qualifications. I will probably buy a retirement home in the US and bugger off when my job here ends.

None of those countries would allow you to emigrate or work except with great difficulty. Within the EU its simple, of course, and cheaper.

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  • 142 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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