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Carney Speech Live Tonight 9Pm


R K

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HOLA441
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HOLA442

3.6% in Worksop?....are you sure the Public Sector with their payscales are not skewing the figures a bit?

Mann's regular meetings with large employer private sector industry.

Listen to the evidence rather than confirming your own bias. You might learn something useful.

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HOLA443

Carney now back tracking on possible 2014 rate hike, stressing spare capacity, low wage growth and lack of inflationary pressures. 50 pips knocked off GBPUSD.

They're clearly trying to give a kick to volatility. Forward guidance out the window.

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HOLA445

Mann's regular meetings with large employer private sector industry.

Listen to the evidence rather than confirming your own bias. You might learn something useful.

Oh, the irony of that statement.

John Mann has never tied anyone in knots during his entire tenure on the Committee.

The reason why Carney is so hesitant when answering questions from Mann is because he's thinking "how do I respond to this clown without openly calling him an idiot".

Mervyn King was the same, and I've highlighted Mann's stupidity a number of times in the past.

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HOLA447

Mann's regular meetings with large employer private sector industry.

Listen to the evidence rather than confirming your own bias. You might learn something useful.

Name one.

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HOLA449
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HOLA4410

I reported what an MP said in the TSC meeting.

If you think he's a liar, then address your issues to him not me. Weirdo.

well, you supported him...I questioned his figures, which you said were valid.

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HOLA4411

well, you supported him...I questioned his figures, which you said were valid.

Maybe he's been chatting to a few local homebuilders? His figures certainly aren't true of the general trend. Nor should we expect them to be. Financial repression means exactly that: each and every year the majority get poorer as the govt attempts to float away the nation's debts.

Real-wage-vs-trend2.png

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HOLA4412

Weirdo lol.

Good to see plenty of discussion of the risks of excessive private sector indebtedness and the links between that problem and house prices and bank solvency.

Still very optimistic that Carney is more of a bubble pricker than a bubble pumper. Who'd a thunk it?

So am I, cautiously. Occasionally worries me when using 2007 as a marker for house price still being below in some areas. In these speeches they've got to manage the expectations of many, without too much of a jolt. Even some of Osborne's speech offered hope, but first Carney here.

There have been some signs of a slowdown in activity, with mortgage approvals falling back to their
mid-2013 levels. The Bank is watching closely to determine the extent to which this reflects an underlying
slowing of housing demand. However, some of this likely stems from lenders adjusting to the
Financial Conduct Authority’s (FCA) tough new Mortgage Market Review underwriting requirements. More
worryingly, surveys suggest some slowing could reflect would-be sellers holding back properties from the
market in anticipation of higher future prices – an early sign of extrapolative price expectations.
The underlying dynamic of the housing market reflects a chronic shortage of housing supply, which the
Bank of England can’t tackle directly. Since we are not able to build a single house, I welcome the
Chancellor’s announcement tonight of measures to increase housing supply.
To be clear, the Bank does not target asset price inflation in general or house prices in particular.
It is indebtedness that concerns us.
In this regard, the UK starts from a vulnerable position with household debt at 140% of disposable income.6
There are some signs that underwriting standards are becoming more lax, with the proportion of new
mortgages at high loan-to-income ratios now at an all-time high. The increase in house prices in the past
year means we can expect the proportion of high loan-to-income mortgages to grow further in the coming
year even if the housing market begins to slow.
...Fortunately, we are not up the proverbial creek without a paddle. We have many of them which we can use
to steer towards two objectives.
The first is to ensure that the banking system is resilient. To that end, the Bank is conducting a stress test to
assess how well major banks and building societies can withstand a sharp housing market correction during
a prolonged and painful recession. The results and any consequences that flow from them will be
announced later this year.
...That’s why authorities have already moved. Last autumn we took our foot off the accelerator by removing
capital relief for banks on new mortgages and, with the Treasury, by re-focussing the Funding for Lending
Scheme away from mortgages towards business lending. Those steps were followed by the implementation
in April of the Mortgage Market Review to reinforce banks’ underwriting standards and the stress test to
underpin their capital discipline.

I'm struggling to understand his meaning in the first paragraph I've quoted, in the context of slowdown in activity - it's somewhat cloaked in meaning. 'More worryingly, surveys suggest some slowing could reflect would-be sellers holding back properties from the market in anticipation of higher future prices – an early sign of extrapolative price expectations.'

'Worryingly'... does he want to alter this holding back mentality in owners (complacency and making it harder for some to upsize of course) and thus help pick up demand, transactions, stamp duty etc - or is it that these owners are right to have such beliefs in forever HPI ahead?

At least the banking system is their priority.

28 Nov 2013 (Carney re ending banks using Funding For Lending for mortgages): He said that banks had rebuilt their capital buffers, meaning the “backstop” of the FLS was not as crucial as it was during its introduction in August last year.

Osborne:

I will not stand by and allow this generation, many of whom have been fortunate enough to own their own home, to say to the next generation: we’re pulling up the property ladder behind us. So we will build the houses Britain needs so that more families can have the economic security that comes with home ownership. And today I will give the Bank of England the powers it needs over mortgages, so that Britain’s economic stability always comes first.
Across the country, the ratio of house prices to incomes is high by historical standards. And while average loan to value ratios for new lending are still well below normal, average loan to income ratios have risen to new highs. Let me spell it out: does the housing market pose an immediate threat to financial stability today? No, it doesn’t. Could it in the future? Yes, it could, especially if we don’t learn the lessons of the past.
Banks recapped, some of those who matter already downsized, hpc.
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HOLA4413

I'm struggling to understand his meaning in the first paragraph I've quoted, in the context of slowdown in activity - it's somewhat cloaked in meaning. 'More worryingly, surveys suggest some slowing could reflect would-be sellers holding back properties from the market in anticipation of higher future prices – an early sign of extrapolative price expectations.'

'Worryingly'... does he want to alter this holding back mentality in owners (complacency and making it harder for some to upsize of course) and thus help pick up demand, transactions, stamp duty etc - or is it that these owners are right to have such beliefs in forever HPI ahead?

At least the banking system is their priority.

I think he literally means "worryingly" as it indicates a speculative market and that is inherently more unstable than a rational one. Also, as you say, the banking system is their priority so hold out sellers blocking new market entrants and greater lending volumes aren't doing anyone any favours.

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HOLA4414

I think he literally means "worryingly" as it indicates a speculative market and that is inherently more unstable than a rational one. Also, as you say, the banking system is their priority so hold out sellers blocking new market entrants and greater lending volumes aren't doing anyone any favours.

Let's hope so. There are similar themes in the US, but just missing Yellen now giving older equity rich owners a bit of a dig.

Monday, June 30, 2014 at 12:05AM
...Then there’s the Fed, “a remarkable dovish outlier.” Instead of focusing on the incredibly ballooning home prices and citing them as a reason for what might count as monetary policy normalization, it has been warning, ironically, of slowing sales volume. Ironically, because slowing sales are a direct consequence of prices that have ballooned out of range for many real home buyers. And even investors that convert homes into rental properties have seen their business model get hit by high prices, and they’re pulling back.
Lately there has been an awful lot of chatter from politicians to Ol’ Yeller herself about how lending standards are too strict. Perhaps they’re just talking shit.
June 23, 2014
FOMC members reduced the Fed’s monthly asset purchases by $10 billion, for a monthly volume of $35 billion in Treasury securities and MBS. ...In response to a question about tight credit, Chair Yellen cited banks’ reluctance to lend to all but those with “pristine” credit scores as a factor contributing to slower recovery in the housing sector.
Recovery I think being transactions very important. I think the Fed here is just pushing away power to intervene even more than it has - done all they realistically can do and much much more. Now banks are better capitialised, and expected to not require bail-outs... soon it might be back to something about price discovery.
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HOLA4415
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HOLA4416

No. I reported what he'd said to Carney at the TSC.

And I originally questioned the voracity of his stats and you told me to go look it up...I assumed you have already, but it seems you are taking him at his word...which is the difference between you and me on this issue...I question, you believe.

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HOLA4417

And I originally questioned the voracity of his stats and you told me to go look it up...I assumed you have already, but it seems you are taking him at his word...which is the difference between you and me on this issue...I question, you believe.

I suggest if you thought he was lying then you should take it up with him, not me.

I'm not responsible for your assumptions, you are. I'm also not responsible for your assertions about my beliefs, sorry.

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HOLA4418

I suggest if you thought he was lying then you should take it up with him, not me.

I'm not responsible for your assumptions, you are. I'm also not responsible for your assertions about my beliefs, sorry.

so you believe that wages are rising at 3%, as he says...?

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HOLA4419
  • 2 weeks later...
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HOLA4420

Volatility is too low.

Have some volatility - WOOF!!

He wants to kick some volatility into the system, but not too much.

Graeme Wearden @graemewearden 41m

Carney tells MPs the Mansion House warning on rates was an attempt to inject some volatility into the markets http://www.theguardian.com/business/2014/jul/15/uk-inflation-data-mark-carney-janet-yellen-business-live?view=desktop#block-53c4f5e4e4b02e55432d0978

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HOLA4421

Bank of England @bankofengland 1h

Carney says capping riskiest borrowing means that for every 1 high ratio mortgage 6 must be extended at lower ratios http://ow.ly/zu59D

Bank of England @bankofengland 1h

Carney tells #Glasgow2014Biz that 1 in 5 new London mortgages are at or above 4.5 times income, compared to 1 in 10 across whole of UK

Edited by R K
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HOLA4424
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HOLA4425

Bank of England ‏@bankofengland 1h

Carney says capping riskiest borrowing means that for every 1 high ratio mortgage 6 must be extended at lower ratios http://ow.ly/zu59D

Bank of England ‏@bankofengland 1h

Carney tells #Glasgow2014Biz that 1 in 5 new London mortgages are at or above 4.5 times income, compared to 1 in 10 across whole of UK

So in other words the measure's being introduced are going to effect the London market dramatically after all.

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