mewParadigm Posted April 19, 2014 Share Posted April 19, 2014 Two of our favourite pundits (Boulger and Bien) discussing MMR this lunchtime (http://www.bbc.co.uk/programmes/b041469n) Can't help wondering if Melanie forgot her lines when Paul Lewis turned the topic to house prices (at 10 mins 20 sec). Went something like this: PL: House prices: Is there a bubble as we've heard this week? MB: We- well I'm not convinced ... I mean the market is crazy in places like London... PL: That sounds like a bubble to me MB: Well, but ... b ... it's ... they're very abnormal ... um ... the ... er ... situation. You've got very few transactions which are pushing up prices but it's not widespread across the country and indeed prices are ... sort of ... the growth at the top end of the market is now tailing off so I'm not convinced. ------ The most telling thing for me is she didn't just say "No there is not a bubble". Quote Link to comment Share on other sites More sharing options...
pig Posted April 19, 2014 Share Posted April 19, 2014 So with a sort of creeping tacit acceptance that we're in a bubble, how will this play out over the next year ? Seems a long time in Politics... Quote Link to comment Share on other sites More sharing options...
zugzwang Posted April 20, 2014 Share Posted April 20, 2014 So with a sort of creeping tacit acceptance that we're in a bubble, how will this play out over the next year ? Seems a long time in Politics... For Osborne and Carney a long year of bluffing and feigning and pretending the dog ate their homework. Quote Link to comment Share on other sites More sharing options...
billybong Posted April 20, 2014 Share Posted April 20, 2014 PL: That sounds like a bubble to me MB: Well, but ... b ... it's ... they're very abnormal ... um ... the ... er ... situation. You've got very few transactions which are pushing up prices but it's not widespread across the country and indeed prices are ... sort of ... the growth at the top end of the market is now tailing off so I'm not convinced. It's just parroting the Carney lines. At least MB didn't try to claim that the BoE had power to deal with "it". Quote Link to comment Share on other sites More sharing options...
XswampyX Posted April 20, 2014 Share Posted April 20, 2014 It's just like a cult now. If this isn't a bubble then what is? They just change the definition of what constitutes one and then they say we don't have one! Well technically I didn't murder him as I have now re-defined murder as killing and then eating the victim. So I only killed him, but didn't eat him, so I can't be found guilty of murder. Quote Link to comment Share on other sites More sharing options...
Dorkins Posted April 21, 2014 Share Posted April 21, 2014 Quite. Apparently they say it is all to do with transactions and nothing to do with price. I take the view the transactions are low because of the bubble price. The high transactions took place in the run up to 2007, but they never let the bubble deflate. The end of a price bubble is typified by lower transactions. Seems logical to me. Transactions would rise if prices fell to a clearing level. If transactions were high they would say it's not a bubble because a high level of transactions shows that prices are comfortably within buyers' ability to pay. It's all just word games. I don't know why anybody listens to the Treasury or the Bank of England. There is zero information content in their pronouncements, they just say whatever purchasers of assets want to hear. Quote Link to comment Share on other sites More sharing options...
mewParadigm Posted April 21, 2014 Author Share Posted April 21, 2014 Nice headline from NZ shows the same psychology operates on the other side of the world:It's Not A Bubble Until It's Officially Deniedhttp://www.forbes.com/sites/jessecolombo/2014/04/21/its-not-a-bubble-until-its-officially-denied-new-zealand-edition/ Quote Link to comment Share on other sites More sharing options...
billybong Posted April 21, 2014 Share Posted April 21, 2014 (edited) In the bbc video the Chief Executive of the FCA said about the new Mortgage Market Review (MMR) rules that "we are not trying to be too prescriptive" but banks would have to ensure that borrowers could meet their obligations if interest rates went up to a certain level - "bringing commonsense back into lending". It appears that the commonsense/able to afford the loan period only applies over 5 years from taking out the mortgage. It remains to be seen whether it'll make much real difference. Apparently the new rules are part of the regulatory framework and the UK knows only too well regulatory framework means nothing. In the middle of the early stages of the bubble (now evident that the early stages were between 1997 and 2008) every relaxation in lending limits was broadcast simultaneously with claims that lenders would only be lending to people who could afford to borrow. So what's really different this time if the rules "aren't too prescriptive". What difference is it going to make. If as time goes on the banks get more and more lax will there be penalities worth the name. Of course it's been great in spurring a bit more borrowing to help lending figures early 2014 just before the eu elections and to try to change people's perceptions of the UK economy as the general election also approaches. Incidentally about the FCA: http:// www.fca.org.uk/about/how-we-are-funded How we are funded We are funded entirely by the financial services firms we regulate. ... ... Which is the same method of funding as the dodgy FSA "regulators" before them. Edited April 21, 2014 by billybong Quote Link to comment Share on other sites More sharing options...
1929crash Posted April 22, 2014 Share Posted April 22, 2014 It's just like a cult now. If this isn't a bubble then what is? They just change the definition of what constitutes one and then they say we don't have one! Well technically I didn't murder him as I have now re-defined murder as killing and then eating the victim. So I only killed him, but didn't eat him, so I can't be found guilty of murder. Reminds me of Sir Henry Campbell-Bannerman (Liberal prime minister, 1905-8) who asked, in a speech in 1903: "When is a war not a war? When it is carried on by methods of barbarism in South Africa!" The Establishment - both Liberal and Tory, didn't like that one bit either. Quote Link to comment Share on other sites More sharing options...
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