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Stephanie Flanders: "we Made Clear That The Housing Market Was Overvalued And The Bubble Would Inevitably Burst"

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Anyone remember this? Flanders sweated around the country in a mangey old Harris Tweed dress. Can't remember her saying anything particularly startling though but maybe she's referring to this piece?

http://news.bbc.co.uk/2/hi/programmes/panorama/4243108.stm

http://news.bbc.co.uk/2/hi/programmes/panorama/4305902.stm

FLANDERS: It's true, manufacturing has continued to shrink under Labour.

FLANDERS: Since the late 1990s our imports have grown twice as fast as our exports. As a result, the trade gap - the gap between our exports and our imports - has worsened nearly every year since Labour took office in 1997.

FLANDERS: The government preferred to measure it in real terms, but in nominal or cash terms investment has fallen under Labour. From 12½ % of national income to 9½ % last year, the lowest since these records began in 1965.

FLANDERS: So where are we? Well, we've had a much more stable economy since the early 90s,

FLANDERS: Like most of us, the Johnson's have not only saved less for the past few years, they've also built up debt. They've got a mortgage of £95,000. And why not when interest rates are low, borrowing is cheap and a rising house market is boosting their wealth But what about when interest rates rise as they did last year and the housing market starts looking a bit shaky, like it does today.

Ed Balls MP: Part of the reason why people have been not saving at very high levels is because they're confident that there isn't going to be a big bout of inflation and there isn't going to be a big period of instability, and that therefore they can take a sensible medium term view

FLANDERS: So far we've had boom but no bust. I'm heading to Nottingham in search of clues to why this unusual mix of high spending and low inflation has already lasted so much longer than the Chancellor's critics expected

FLANDERS: The upside for all of us of the decline in British manufacturing is cheaper foreign goods and lower inflation for Brown's miracle economy. Trouble is, whether it's bikes or anything else, outsourcing to Asia is something you can only do once, and if there's less scope for that in the future, there's more chance that imports will push up prices rather than pull them down.

FLANDERS: In the northeast the number of public sector jobs has grown by more than a fifth since 1997. The number of jobs in the private sector has fallen by about 2%.

FLANDERS: Love it or hate it, you'd have to say that a lot of the taxpayers' money pouring into this region has been spent on things people want.

FLANDERS: Under Gordon Brown we've had a very stable economy - but a miracle economy? Well, we've had some good decisions at the start, but also quite a lot of luck, including an unusual world environment that let us spend and borrow without the normal constraints. Now some of the Chancellor's luck may be starting to run out, and the big question is where our growth is going to come from in the future, just as he enters what he hopes will be the final furlong in the race to No.10, we're all about to find out how much of the miracle economy Gordon Brown has left.

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+1.

Both bits.

These words are 'the key'

"Flanders was a student at Balliol College, Oxford and attended Harvard University as a Kennedy Scholar."

"Peston was born on 25 April 1960, the son of the economist and Labour peer Maurice Peston. He attended Highgate Wood Comprehensive School in North London and then Balliol College, Oxford where he graduated with a degree on Politics, Philosophy and Economics in 1982"

Three of Balliol's MPs hold specific Government positions: Yvette Cooper MP, Minister for Housing and Planning; Ian Pearson MP, Minister for Trade; and James Purnell MP, Parliamentary Under-Secretary of State (Department for Culture, Media and Sport).

In the Lords, prominent members include the Chancellor of the University (Lord Patten), Balliol's Visitor (Lord Bingham), and a member of the Scottish Parliament (Lord Selkirk).

108 of the 646 MPs (17%) sitting in the House of Commons are Oxford graduates. In the Lords, 154 of the 730 members (21%) are Oxford graduates. The 25 Balliol alumni in the combined Houses of Parliament represent 10% of the total

Balliol (1263)

John Wycliffe, Adam Smith, William Beveridge, Gerard Manley Hopkins, Hilaire Belloc, Aldous Huxley, King Olav V of Norway, King Harald of Norway, Edward Heath, Harold Macmillan, Grahame Greene, Siegfried Sassoon, Denis Healey, Roy Jenkins, Cosmo Lang, Frederick Temple, William Temple, Herbert Asquith, Joe Grimond, Nevil Shute, Chris Patten, Lionel Blue, Boris Johnson, Lord Peter Wimsey

Brasenose (1509)

William Webb Ellis, Colin Cowdrey, William Golding, Robert Runcie, Michael Palin, John Buchan, Field Marshal Haig, Stephen Dorrell, John Gorton, David Cameron

Christ Church (1546)

Philip Sidney, John Locke, Robert Hooke, Christopher Wren, John Ruskin, Zulfikar Bhutto, John Taverner, Adrian Boult, William Walton, Lewis Carroll, WH Auden, Auberon Waugh, Edward VII, Ludovic Kennedy, Lord Fawsley, John Wesley, Charles Wesley, William Penn, Albert Einstein, David Dimbleby, Robert Peel, William Gladstone, Marquess of Salisbury, Anthony Eden, Alec Douglas Home, Nigel Lawson, Trevor Huddleston, Jonathan Aitken, Alan Clarke

Corpus Christi (1517)

William Waldegrave, John Keble, Vikram Seth, Robert Bridges, Isaiah Berlin

Exeter (1314)

RD Blackmore, JRR Tolkien, Geoffrey Fisher, Hubert Parry, Edward Burne-Jones, Roger Bannister, Ned Sherrin, Robert Robinson, Richard Burton, Martin Amis, Russell Harty, Alan Bennett, William Morris, Imogen Stubbs, Will Self

Hertford (1740)

John Donne, William Tyndale, Jonathan Swift, Henry Pelham, Evelyn Waugh, Thomas Hobbes, Charles James Fox, Natasha Kaplinsky, Fiona Bruce, Krishnan Guru-Murthy, Jacqui Smith

Jesus (1571)

Harold Wilson, Magnus Magnusson, Paul Jones, TE Lawrence

Keble (1870)

Imran Khan, Chad Varah, Timmy Mallett

Lady Margaret Hall (1878)

Benazir Bhutto, Antonia Fraser, Barbara Mills

Lincoln (1427)

John Wesley, John Le Carre, Manfred von Richtofen, Dr Seuss

Magdalen (1458)

John Betjeman, Edward VIII, Keith Joseph, Ivor Novello, Dudley Moore, Kenneth Baker, CS Lewis, Desmond Morris, John Redwood, Oscar Wilde, Cardinal Wolsey, William Hague, Malcolm Fraser, Bertie Wooster

Mansfield (1886)

Adam Von Trott

Merton (1264)

William Harvey, Max Beerbohm, TS Eliot, Sheridan Morley, Roger Bannister, Frank Bough, Kris Kristofferson, Prince Naruhito, John Wycliffe

New (1379)

William Spooner, John Galsworthy, Hugh Gaitskell, Tony Benn, Dennis Potter, Gyles Brandreth, Douglas Jardine, Hugh Grant, Brian Johnston, John Fowles, Kate Beckinsale

Oriel (1326)

Cardinal Newman, Cecil Rhodes, Beau Brummel, Sir Walter Raleigh

Pembroke (1624)

Michael Heseltine, Samuel Johnson, Julian Critchley, Denzil Davies, George Whitefield, James Smithson

Queen's (1341)

Edmund Halley, Brian Walden, David Jenkins, Jeremy Bentham, Rowan Atkinson, Henry V, Gerald Kaufman, Tim Berners-Lee

St Anne's (1893)

Edwina Currie, Penelope Lively, Simon Rattle, Iris Murdoch, Sister Wendy Beckett, Baroness Young, Libby Purves, Jancis Robinson

St Catherine's (1963)

John Birt, John Paul Getty, Joseph Heller, AA Milne, Matthew Pinsent, Peter Mandelson, Jeanette Winterson

St Edmund Hall (1278)

Robin Day, Terry Jones

St Hilda's (1893)

Gillian Shephard, Zeinab Badawi, Helen Jackson, Ros Miles, Susan Greenfield, Val McDermid

St Hugh's (1886)

Barbara Castle, Ruth Lawrence, Kate Adie

St John's (1555)

AE Housman, Jethro Tull, Kingsley Amis, Robert Graves, Philip Larkin, John Wain, Tony Blair, Inspector Morse

St Peter's (1929)

Peter Wright, Rev W Awdry, Paul Condon, Ken Loach

Somerville (1879)

Margaret Thatcher, Vera Brittain, Iris Murdoch, Dorothy L Sayers, Esther Rantzen, Indira Gandhi, Shirley Williams, Dorothy Hodgkin

Trinity (1554)

Laurence Binyon, Terence Rattigan, Jeremy Thorpe, Cardinal Newman, Norris McWhirter, Miles Kingston, Robin Leigh-Pemberton

University (1249)

Clement Atlee, Hugh Gaitskell, Harold Wilson, William Beveridge, Stephen Hawking, Paul Gambaccini, Peter Sissons, CS Lewis, Bill Clinton, Willie Rushton, Peter Snow, Bob Hawke, Richard Ingrams, VS Naipaul, Percy Shelley, Chelsea Clinton

Wadham (1610)

Cecil Day Lewis, Thomas Beecham, Michael Foot, Melvyn Bragg, Christopher Wren

Worcester (1714)

Alastair Burnett, Richard Adams, Rupert Murdoch, John Sainsbury, Thomas de Quincey

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Well I am going to put the cat amongst thy pigeons here...

Stephanie F DID spot the problem in the autumn of 2003, in a slot she did on - would you believe it - liar loans!

I remember watching it with my then girlfriend, now wife. It was a piece on the dangers of self-cert mortgages, and the FSA failure to investigate them properly.

There is a possibility that this was Oct 2004, not 2003... either way, SF could have nailed the bubble. Sadly, she didn't stick to a "there's too much irresponsible lending" line and the rest is history...

Checking the wiki article on Stephanie F, she was working for Newsnight in 2003, whcih was when the Money Programme on Mortgage Fraud was screened; so I think I must have seen her presenting the same story on Newsnight, in an abridged version.

This mortgage fraud was only part of the problem, but it all added up. The desparation to get into property should have been flagged up more. I joined HPC in early 2004, when it was very obvious that property was overpriced and sucking everyone - and their future earnings - in.

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Checking the wiki article on Stephanie F, she was working for Newsnight in 2003, whcih was when the Money Programme on Mortgage Fraud was screened; so I think I must have seen her presenting the same story on Newsnight, in an abridged version.

This mortgage fraud was only part of the problem, but it all added up. The desparation to get into property should have been flagged up more. I joined HPC in early 2004, when it was very obvious that property was overpriced and sucking everyone - and their future earnings - in.

Exactly.

And she knows she failed. The way she replied to that question was very weird - we "say" we "feel like"... And then she lied.

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If only that Jonny Wilkinson look-alike Paddles was still here.

He would tell you his BBC nickname was "Tinsel-Tits".

PS, what happened to Paddles? I seem to recall he went to "the other place"?

Edit to add: "He would tell you" is obviously not meant to say that was actually Evan Davies' nickname, bit like adding "allegedly" in there.

Hey Bob, still around just 11 hours ahead. I dip in every now and then. Bardon's blog thread is a source of amusement now that I'm in Sydders and I hear people trying to justify 6 x salary mortgages and "negative gearing", i.e. Loss making BTL.

If Flanders called it she called it sotto voce. Evan was marginally better but never came right out and said it was either a bubble or even unsustainable.

As for the rotund Irish bloke on breakfast TV, his financial reporting rarely consisted of anything more sophisticated than a smiley or sad emoticon at the side of each Market listing. I think we've all learned not to listen to the majority Irish opinion on property in recent years though.

No, they failed in their duty to inform although the jury is out on whether they entertained. The BBC is a bit like the description of democracy; its terrible but better than all the alternatives.

28 degrees here on Curl Curl beach by the way. That should get crowd behind me.......

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Hey Bob, still around just 11 hours ahead. I dip in every now and then. Bardon's blog thread is a source of amusement now that I'm in Sydders and I hear people trying to justify 6 x salary mortgages and "negative gearing", i.e. Loss making BTL.

If Flanders called it she called it sotto voce. Evan was marginally better but never came right out and said it was either a bubble or even unsustainable.

As for the rotund Irish bloke on breakfast TV, his financial reporting rarely consisted of anything more sophisticated than a smiley or sad emoticon at the side of each Market listing. I think we've all learned not to listen to the majority Irish opinion on property in recent years though.

No, they failed in their duty to inform although the jury is out on whether they entertained. The BBC is a bit like the description of democracy; its terrible but better than all the alternatives.

28 degrees here on Curl Curl beach by the way. That should get crowd behind me.......

Good post.

Just on the credit bubble and the BBC - it was as blind as any other media source. (Well, any other mainstream media, coz the technical publications, such as the FT and Economists were warning about the credit/assets bubble since 2002 or 03. yet, the BBC failed to pick it up.) What makes the BBC effect worse than ITV or tabloids is exactly the widespread belief that the BBC is better than the others, more reliable, or better informed, unbiased etc. Well, on this bubble, it wasn't. BTW, most of the time the BBC's opinions and mind-set are not based on rational professional analyses, but on automatic middle-class public sector general culture.

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Bubbles feed on media complicity

+ 1

Very good summary.

Why are we forced to pay the BBC license fee? If they failed to warn the general population against the most visible and most damaging credit bubble in British history? (The FT and Economist were warning against the bubble since 2002 or 03.)

Edited by Tired of Waiting

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http://news.bbc.co.uk/1/hi/business/3701070.stm Wednesday, 29 September 2004,

Cant find anything from Stephanie Flanders though.

Yes, young Evan old position re. HPI was remembered in this thread. Problem was, soon afterwards he bought a house, and went soft...

See if you find similar articles from him in 2006 or 07.

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In the Lords, prominent members include the Chancellor of the University (Lord Patten), Balliol's Visitor (Lord Bingham), and a member of the Scottish Parliament (Lord Selkirk).

108 of the 646 MPs (17%) sitting in the House of Commons are Oxford graduates. In the Lords, 154 of the 730 members (21%) are Oxford graduates. The 25 Balliol alumni in the combined Houses of Parliament represent 10% of the total

10% of the total what?

It certainly isn't 10% of the total parliament, and other meaning is just pointless waffle.

tim

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The only Bubbles she was aware of inflating were the spu*k bubbles she was blowing at the labour buk*k* parties she allegedly seems to have been playing a part in.... allegedly!

Edited by sbn

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It's a shame professional journalists don't know how to use a reflective pronoun. "Yourself" isn't a politer way of saying "you". They don't mean the same thing.

Perhaps they should have allowed himself to introduce himself. :D

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These words are 'the key'

"Flanders was a student at Balliol College, Oxford and attended Harvard University as a Kennedy Scholar."

"Peston was born on 25 April 1960, the son of the economist and Labour peer Maurice Peston. He attended Highgate Wood Comprehensive School in North London and then Balliol College, Oxford where he graduated with a degree on Politics, Philosophy and Economics in 1982"

Balliol has a rep for being well red, and yes, that was no typo.

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But the credit bubble was not an ideological choice. It was just incompetence, or political short-termism ( = b@stards).

And in that regard it suited the supporters of the incumbents, who, despite Blair's best efforts, were at least a reasonably saturated shade of pink. So yes, ideologically people with Flanders' politics, as a group, proparbly had no particula bias on the credit bubble, but insofar as it kept their lot in the driving seat, I'm sure they were not averse to toning down any overt criticism they had of the bubble policy - which was indeed policy, as evidenced by Alana Milburn's Nov 2003 piece as Party campaign manager for the forthcoming election (who you will note is putting an ideological spin on credit expansion - disingenuously imho):

Assets for all

"If Labour promotes wider property ownership, it will both satisfy voters' aspirations and reduce inequality

Labour's future agenda has to open up life opportunities for more people ..

More flexible forms of borrowing could be developed with mortgage lenders.

To date they have been overly cautious in promoting packages aimed at lower-income households.

We should explore whether a right to buy or partially buy can be extended to housing association tenants, ..

Thousands of people have already benefited from programmes like Homebuy

that remove barriers to home ownership. But we are just scratching the surface.

You only have to look across the Atlantic to see what could be done.

US government-sponsored enterprise companies

have helped 58 million low- and moderate-income families buy their own homes."

-Alan Milburn, November 10 2003, former Health Secretary who went on to run the 2005 election campaign

Sadly this guy is now social mobility tsar thanks to Cameron. :(

Edited by Sledgehead

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And in that regard it suited the supporters of the incumbents, who, despite Blair's best efforts, were at least a reasonably saturated shade of pink. So yes, ideologically people with Flanders' politics, as a group, proparbly had no particula bias on the credit bubble, but insofar as it kept their lot in the driving seat, I'm sure they were not averse to toning down any overt criticism they had of the bubble policy - which was indeed policy, as evidenced by Alana Milburn's Nov 2003 piece as Party campaign manager for the forthcoming election (who you will note is putting an ideological spin on credit expansion - disingenuously imho):

Assets for all

"If Labour promotes wider property ownership, it will both satisfy voters' aspirations and reduce inequality

Labour's future agenda has to open up life opportunities for more people ..

More flexible forms of borrowing could be developed with mortgage lenders.

To date they have been overly cautious in promoting packages aimed at lower-income households.

We should explore whether a right to buy or partially buy can be extended to housing association tenants, ..

Thousands of people have already benefited from programmes like Homebuy

that remove barriers to home ownership. But we are just scratching the surface.

You only have to look across the Atlantic to see what could be done.

US government-sponsored enterprise companies

have helped 58 million low- and moderate-income families buy their own homes."

-Alan Milburn, November 10 2003, former Health Secretary who went on to run the 2005 election campaign

Sadly this guy is now social mobility tsar thanks to Cameron. :(

This Alan Milburn's speech was very interesting indeed. Thanks for that Sledgehead. Can you post a link to it please?

Though I am not sure if he knew or foresaw the bubble back then. Yes, some of them were really that thick, particularly on numeracy aspects - Tony Blair included by the way! Many lawyers there were/are. That was one reason they thought Brown was a "genius" :rolleyes: he could add! (Well, just.)

Though I'm quite sure Brown - and Balls, even more so - had seen the warnings from the Treasury officials, with macro-economic data, etc.

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