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Nationwide October 2013 +1.0% Mom +5.8% Yoy

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Robert Gardner, Nationwide Chief Economist spouted:

The ability and willingness of potential buyers to transact has been steadily increasing. The ability to buy has been supported by continued gains in employment and policy measures such as the Help to Buy and Funding for Lending schemes which have improved the availability and lowered the cost of credit. Mortgage rates are close to all time lows.

But wait...

House price growth has accelerated as buyer demand has picked up more quickly than the supply of new homes. The risk is that if demand continues to strengthen while the supply of property remains constrained affordability could become stretched. Indeed, average wages have continued to decline in real terms even though employment growth has been fairly robust in recent years.

Ah...

Moreover, typical mortgage servicing costs remain modest by historic standards thanks to the ultra-low level of interest rates. A typical mortgage payment for a first time buyer is currently equal to around 29% of take home pay, in line with the long term average.

So in other words, Bobby G, it's got ****** all to do with employment, where more people are working for less money, and everything to do with cheap credit, 300 year low interest rates and government desperation. I can't see this ending well for those buyers getting sucked in at the moment. 29% of take home pay today, 60% tomorrow. What could go wrong?

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Robert Gardner, Nationwide Chief Economist spouted:

But wait...

Ah...

So in other words, Bobby G, it's got ****** all to do with employment, where more people are working for less money, and everything to do with cheap credit, 300 year low interest rates and government desperation. I can't see this ending well for those buyers getting sucked in at the moment. 29% of take home pay today, 60% tomorrow. What could go wrong?

I've moved the bulk of my money out of the nationwide.

They seem to have lost their way.

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+6% in a year...

Its a bubble on a bubble.

Raise them rates!!!!

When compared in isolation it's 6% against last years prices.

BUT, when compared against wages it's more like 8%

AND, when compared against disposable income it's more like 10%

Interest rates will dictate if the new bubble is sustainable/affordable.

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This joyous news is conspicuously absent from the BBC news front page...

Edit to add: This is on their business page though:

UK house price bubble warning

:blink:

Edited by rantnrave

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This joyous news is conspicuously absent from the BBC news front page...

Probably too busy knocking back the champagne.

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I'm interested to see the facts...i.e. how much of this is due to the crazy london bubble ?

if the nationwide are funding the madness in london they might get a BIG shock soon.

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Hard to tell what is moving quicker, the housing market up or the quality of life down.

Still I'm sure they are not related in any way.

I was looking over my old neck of the woods the other day in Milton Keynes using Property Bee, detached houses up to £400k, about half a dozen increases and five dozen reductions out of 256 properties. Either the price increase wave out of London hasn't hit MK yet or the numbers are BS, sadly I suspect the former.

Who the hell is driving this I'm not sure, I'd have thought FTB's would have given up completely by now. It does look like new builds are getting snapped up at record speed though, probably George Osborne's help-to-sell scheme at play here.

Looking over the whole crisis from 2007 it would seem the nutters running the asylum have shoved all the chips on the very same section of the roulette table that blew up in the first place, only this time around we have interest rates at virtually zero and boundless money printing, neither of which are working at creating any real sustainable economic activity. More debt piled on top of a big pile of existing debt, that's all we seem to have. It's a FAIL.

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Looking over the whole crisis from 2007 it would seem the nutters running the asylum have shoved all the chips on the very same section of the roulette table that blew up in the first place, only this time around we have interest rates at virtually zero and boundless money printing, neither of which are working at creating any real sustainable economic activity. More debt piled on top of a big pile of existing debt, that's all we seem to have. It's a FAIL.

+1.

And when the system FAILS...the bubble COLLAPSES.

I hate to say it, but you can just feel it coming. They've had a good run at it and all those MPs have had plenty chance to cash in so...get your pop corn out and wait for something to happen....

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Nothing will happen until interest rates rise and they will not rise for years or until after the election. Slow modest recovery with some drop in unemployment and some GDP growth, so steady and slow with no interest rate rises and a boom in property prices. The plates have been kept spinning so why would George and Mark change now? This situation makes many voters very happy.

Low interest rates make many people unhappy and is not a vote winner.

It's a small minority who are benefiting from these low interest rates ( mostly the bankers ).

There are many scenarios other the rate rises that will spark a collapse.

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Nothing will happen until interest rates rise and they will not rise for years or until after the election. Slow modest recovery with some drop in unemployment and some GDP growth, so steady and slow with no interest rate rises and a boom in property prices. The plates have been kept spinning so why would George and Mark change now? This situation makes many voters very happy.

The UK is part of a globalised world. The 2008 event that sparked things off (Lehman Brothers collapse) originated in the US.

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The UK is part of a globalised world. The 2008 event that sparked things off (Lehman Brothers collapse) originated in the US.

here's a list of possible issues, in what I think the most likely order:

1) Euro collapse

2) China banking/bubble collapse

3) (Another LARGE ) British Bank collapse

3) Coalition breakdown

4) US monetary crisis

Other more outlandish and less likely scenarios ( in no particular order ):

1) Terrorist attack on London/New York.

2) Massive California earthquake ( a definite at some point in history ).

3) New york tsunami.

4) American civil work.

5) British spring.

6) Scottish independence.

7) UK currency collapse

I could go on all day...and as some of you know...I do.

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Nothing will happen until interest rates rise and they will not rise for years or until after the election. Slow modest recovery with some drop in unemployment and some GDP growth, so steady and slow with no interest rate rises and a boom in property prices. The plates have been kept spinning so why would George and Mark change now? This situation makes many voters very happy.

What you describe there wouldn't be so bad if it were not for the last part, the boom in properly prices. If we could achieve the same but with some unwinding of the debt burden and stagnant/falling property prices then I could see a sustainable path forward and some signs of a increase in living standards. This doesn't seem to be what they want though and any signs of deflation and de-leveraging cause TPTB to crap in their pants.

I'm assuming the grand plan, if there is one, is to get wage inflation going at some point? Surely deflating wages and inflating house prices can only go so far before people simply cannot afford to drive to work or put food on the table any more? If Gas and Electric are anything to go by then I can see even more people struggling this year than last.

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What you describe there wouldn't be so bad if it were not for the last part, the boom in properly prices. If we could achieve the same but with some unwinding of the debt burden and stagnant/falling property prices then I could see a sustainable path forward and some signs of a increase in living standards. This doesn't seem to be what they want though and any signs of deflation and de-leveraging cause TPTB to crap in their pants.

I'm assuming the grand plan, if there is one, is to get wage inflation going at some point? Surely deflating wages and inflating house prices can only go so far before people simply cannot afford to drive to work or put food on the table any more? If Gas and Electric are anything to go by then I can see even more people struggling this year than last.

As I said somewhere else, i think the chaps at the gas companies have seen the cost of borrowing going down and decided to up their prices and take in the slack in peoples disposable income.

This means peoples financies are probably back at 2007 levels.

I remember viewing a house in 2007 and the woman quite openly told us she needed to sell as she couldn't afford the house any more...then the NR collapsed.

The UK could well be about to grind to a halt.....

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here's a list of possible issues, in what I think the most likely order:

1) Euro collapse

2) China banking/bubble collapse

3) (Another LARGE ) British Bank collapse

3) Coalition breakdown

4) US monetary crisis

Other more outlandish and less likely scenarios ( in no particular order ):

1) Terrorist attack on London/New York.

2) Massive California earthquake ( a definite at some point in history ).

3) New york tsunami.

4) American civil work.

5) British spring.

6) Scottish independence.

7) UK currency collapse

I could go on all day...and as some of you know...I do.

The proximate 'cause' is unimportant. Economists, historians and financial journalists are fond of them because they provide explanatory hooks for their narratives. In reality the failure of 2008 was a systemic one, the global economy became so over-stressed that it had no alternative but to fail catastrophically. The trigger could have been anything: a 300 point green print on the Dow is somebody's loss after all. But complex systems don't collapse into a heap overnight, they tend to stair-step their way down through descending levels of meta-stability. John Michael Greer calls this process catabolic collapse. Looking at the health of the world economy, the over-extension of financial markets vs the slump in global shipping, I'd say we're pretty close to another step down.

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The media's take on things is that house prices are still '7% below their 2007 peak' (we all know that they're much lower in some regions and way beyond that peak in others). It's almost as if the government's policies are hurtling towards making up that 7% shortfall and then entering positive territory in time for the election. Shameless.

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The media's take on things is that house prices are still '7% below their 2007 peak' (we all know that they're much lower in some regions and way beyond that peak in others). It's almost as if the government's policies are hurtling towards making up that 7% shortfall and then entering positive territory in time for the election. Shameless.

I guess they are desperate to get the likes of Britannia's loan book straight, though it will probably take more than the peak revisited to get a mortgage book that has a northern bias into positive territory. They certainly don't want to have to take on any further head cases like the former Northern Rock loan book.

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AND, when compared against disposable income it's more like 10%

November and December 12 didn't pull any punches as far as month on month growth was concerned..... flat-lining. Any half decent growth up to Christmas could see the index touching 10% as the late autumn from last year drops out of the rolling stats.

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The proximate 'cause' is unimportant. Economists, historians and financial journalists are fond of them because they provide explanatory hooks for their narratives. In reality the failure of 2008 was a systemic one, the global economy became so over-stressed that it had no alternative but to fail catastrophically. The trigger could have been anything: a 300 point green print on the Dow is somebody's loss after all. But complex systems don't collapse into a heap overnight, they tend to stair-step their way down through descending levels of meta-stability. John Michael Greer calls this process catabolic collapse. Looking at the health of the world economy, the over-extension of financial markets vs the slump in global shipping, I'd say we're pretty close to another step down.

Can't disagree with any of that, I'd rather have you in charge of the country's finances than the idiots we have now.

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I'm assuming the grand plan, if there is one, is to get wage inflation going at some point?

I saw Danny Blanchflower on Bloomberg today saying that 'wages aren't going anywhere- anywhere' His point being that the FED should ignore it's jobs target and keep printing until wages are seen to be rising. :unsure:

But no one seems to explain how wages can rise in a globalised context of high unemployment in the west and hyper productivity in the east.

I work as an artist and the rates on offer for illustration work are lower today than they were twenty years ago- and going down- and this is for relatively skilled work- so wage inflation is increasingly something only those with genuinely rare skills or talents will be able to command- for the ordinary working person they are no longer on the menu- too many people globally or even locally will happily do your job for less than your current pay, if given half a chance.

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I glanced at the graph of consumer confidence and that appears to be in negative territory but rising. Not stellar. General prices are rising faster than wages and this should squeeze at the affordability modelling end. This may show up in weak volumes or what I heard Is that underwriters will kick back. Also heard chains are back and they are very slow.

Miliband seems to be highlighting the low inflation myth and the cpi stat is well cobblers. Living wage...

Edited by Ash4781

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Low interest rates make many people unhappy and is not a vote winner.

It's a small minority who are benefiting from these low interest rates ( mostly the bankers ).

But about 65% of the country are home owners, generally they're delighted with low interest rates. Add in all those people with bank overdrafts and it's easy to see that low interest rates are a huge vote winner.

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