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mewParadigm

Intervention To Stop A Crash Will Probably Cause A Crash?

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Today's quotes from the bank on Sky ("We could limit amounts of certain types of mortgages that banks could undertake, we could provide advice. The chancellor has asked us if we would provide advice on changing the terms of Help to Buy.") and the government on the BBC ("I think if he says that we need to pare back on some of the government schemes like Help to Buy, then I think we should do so.") suggest conscious signalling that some kind of intervention is afoot .

If scaling back support for the market is announced, I see two things as inevitable: (1) rapid retreat by the smart money as the market is spooked that this is just the start of it and (2) a MIRAS-style last hurrah as the not-so-smart money rushes to borrow to the hilt before the restrictions come in. Suddenly demand falls off a cliff and we know what comes after that.

What's the alternative that I can't see, that following meteoric rises engineers a miraculous soft landing with, happily ever after, house prices ambling along in step with wages? Wouldn't the people in charge better serve their own interests by sitting back, letting the bubble become even bigger before bursting and then blaming everyone else?

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Its a ponzi scheme. It goes up or it crashes.

What he said.

Plus:

  • markets don't need support, manipulated prices need support if the people who seek to manipulate them want to keep them high (don't let anyone manipulate the way that you use language and thereby inculcate in your mind a false view of the world - there is nothing intrinsic about markets which requires that they be provided with 'support')
  • the smart money left in 2008
  • you're right that some people may rush in now (because lending is cheap) for fear of not being able to borrow so much later (whilst oblivious to the impact on prices of people not being able to borrow so much) - we have a name for them, we call them 'the greater fool'
  • it's not an intervention that is afoot, it's the withdrawal of an intervention - the intervention was put in place to recapitalise the banks and it has done what it is going to do, now it seems TPTB have decided that it is time to for marginal borrowers to take their share of the pain

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We are being softened up for rate rises.

The language used to describe the bubble up to 2008 was never so negative.

The insiders have now covered their losses....they will now let it all crash.

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Today's quotes from the bank on Sky ("We could limit amounts of certain types of mortgages that banks could undertake, we could provide advice. The chancellor has asked us if we would provide advice on changing the terms of Help to Buy.") and the government on the BBC ("I think if he says that we need to pare back on some of the government schemes like Help to Buy, then I think we should do so.") suggest conscious signalling that some kind of intervention is afoot .

If scaling back support for the market is announced, I see two things as inevitable: (1) rapid retreat by the smart money as the market is spooked that this is just the start of it and (2) a MIRAS-style last hurrah as the not-so-smart money rushes to borrow to the hilt before the restrictions come in. Suddenly demand falls off a cliff and we know what comes after that.

What's the alternative that I can't see, that following meteoric rises engineers a miraculous soft landing with, happily ever after, house prices ambling along in step with wages? Wouldn't the people in charge better serve their own interests by sitting back, letting the bubble become even bigger before bursting and then blaming everyone else?

I think any watering down of HTB would have a big market impact on sentiment because it signals the lack of willingness of the gov to further intervene in the market.

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The crash started in 2007/2008, there is no stopping it.

What we've had over the last 12 months, in my opinion, is a bunch of idiots trying to re-inflate the original bubble to suit their own agenda, all they have done is make things MUCH worse better. :lol:

the bubble was actually deflating slowly/nicely from 2010 onwards and reality was starting to sink in around spring 2013 for those people who had their house on the market the 3/4 years.....then government intervention sent london prices to the moon and the media into a frenzy.

Reality/Simple arithmetic/Sanity will prevail.

Edited by TheCountOfNowhere

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Today's quotes from the bank on Sky ("We could limit amounts of certain types of mortgages that banks could undertake, we could provide advice. The chancellor has asked us if we would provide advice on changing the terms of Help to Buy.") and the government on the BBC ("I think if he says that we need to pare back on some of the government schemes like Help to Buy, then I think we should do so.") suggest conscious signalling that some kind of intervention is afoot .

If scaling back support for the market is announced, I see two things as inevitable: (1) rapid retreat by the smart money as the market is spooked that this is just the start of it and (2) a MIRAS-style last hurrah as the not-so-smart money rushes to borrow to the hilt before the restrictions come in. Suddenly demand falls off a cliff and we know what comes after that.

What's the alternative that I can't see, that following meteoric rises engineers a miraculous soft landing with, happily ever after, house prices ambling along in step with wages? Wouldn't the people in charge better serve their own interests by sitting back, letting the bubble become even bigger before bursting and then blaming everyone else?

They're not going to risk bursting the bubble by trying to rein it in with financial controls. It's typical Central Bankster 'talking the market in one direction' and hoping that the market responds to cool off a little without them actually having to take action, which they have no intention of doing as they know the consequences and certainly don't want to take the blame.

The only action they are going to take is more price pumping should the bubble look like popping. Bubbles either keep inflating or burst/deflate rapidly, they never stabilise for any period of time. This bubble cannot be allowed to pop since it would take the banking system and general economy down with it - hence more pumping in the future despite what they may be saying.

Central Banksters: What they DO , not what they SAY.

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Bubbles either keep inflating or burst/deflate rapidly, they never stabilise for any period of time.

Strangely though in 2010 the land registry ( for most areas ) stabilised and the sale prices look like a straight line. I agree bubbles inflate or burst but the current bubble seems to be strangely controlled...somehow. the land registry graph for Northampton, is totally unnatural

e.g.:

post-10812-0-31160300-1400504476_thumb.png

It's like this around most of the country.

I suspect some underhand banker scheme but then again maybe everyone just agrees that thse 2010 prices are the one they'll pay :rolleyes:

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Bubbles either keep inflating or burst/deflate rapidly, they never stabilise for any period of time.

Strangely though in 2010 the land registry ( for most areas ) stabilised and the sale prices look like a straight line. I agree bubbles inflate or burst but the current bubble seems to be strangely controlled...somehow. the land registry graph for Northampton, is totally unnatural

e.g.:

post-10812-0-31160300-1400504476_thumb.png

It's like this around most of the country.

I suspect some underhand banker scheme but then again maybe everyone just agrees that thse 2010 prices are the one they'll pay :rolleyes:

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Strangely though in 2010 the land registry ( for most areas ) stabilised and the sale prices look like a straight line. I agree bubbles inflate or burst but the current bubble seems to be strangely controlled...somehow. the land registry graph for Northampton, is totally unnatural

e.g.:

attachicon.gifnn1.png

It's like this around most of the country.

I suspect some underhand banker scheme but then again maybe everyone just agrees that thse 2010 prices are the one they'll pay :rolleyes:

How I wish that picture had been repeated in London, rather than the insanity we have at present down here.

Edited by Ah-so

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They're not going to risk bursting the bubble by trying to rein it in with financial controls. It's typical Central Bankster 'talking the market in one direction' and hoping that the market responds to cool off a little without them actually having to take action, which they have no intention of doing as they know the consequences and certainly don't want to take the blame.

The only action they are going to take is more price pumping should the bubble look like popping. Bubbles either keep inflating or burst/deflate rapidly, they never stabilise for any period of time. This bubble cannot be allowed to pop since it would take the banking system and general economy down with it - hence more pumping in the future despite what they may be saying.

Central Banksters: What they DO , not what they SAY.

If Carney's the most capable central banker of his generation then what does that say about the rest? It's doubtful that any one them has the first f***ing idea how an economy works, or what caused the Crash of 2008. Bernanke certainly hasn't been able to furnish us with an explanation.

Edited by zugzwang

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Strangely though in 2010 the land registry ( for most areas ) stabilised and the sale prices look like a straight line. I agree bubbles inflate or burst but the current bubble seems to be strangely controlled...somehow. the land registry graph for Northampton, is totally unnatural

e.g.:

attachicon.gifnn1.png

It's like this around most of the country.

I suspect some underhand banker scheme but then again maybe everyone just agrees that thse 2010 prices are the one they'll pay :rolleyes:

Interesting chart but it didn't go straight from vertiginous rise to flat - there was a 15-20% correction in between. I presume the flat bit was supported by the record low interest rates helping 'affordability' but that's not available this time.

Today we heard Tower Hamlets prices were up 43% in a year. Who realistically believes in going straight from that to stability with no overshoot, with or without policy changes?

Saw reported today that the FPC is going to review HtB in the early autumn, so perhaps my OP feeling some action is afoot is somewhat premature.

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