karhu Posted December 1, 2005 Share Posted December 1, 2005 I can't discuss how I came to have this information, and can't divulge any more details. I was wondering whether it was appropriate to post this on this forum, but I thought what the hell. Nothing I've written below is hugely sensitive - you could find it out for yourself if you looked. However, these are comments made by an actual MPC member off the record. It has shocked me because they know exactly what's going on. In fact a lot of it sounded very much like what I hear on HPC. The essence of it (of interest to this board): 1. IRs are looking like they will stay the SAME or FALL over the next quarter. 2. ONS figures are not to be trusted. Their main concern was that the figures are out of date by the time they are published. 3. The housing market is doomed. Quote Link to comment Share on other sites More sharing options...
BandWagon Posted December 1, 2005 Share Posted December 1, 2005 Read some of the CV's of the MPC commitee: http://www.bankofengland.co.uk/about/people/index.htm There are some enormously experienced people with tremendous knowledge of the economy. It would be naive to think that they don't understand what has happened. Quote Link to comment Share on other sites More sharing options...
karhu Posted December 1, 2005 Author Share Posted December 1, 2005 Read some of the CV's of the MPC commitee: http://www.bankofengland.co.uk/about/people/index.htm There are some enormously experienced people with tremendous knowledge of the economy. It would be naive to think that they don't understand what has happened. Yea that's what I have always thought, but one always wonders. This is confirmation that THEY REALLY DON'T CARE ABOUT HOUSING PER SE. They are interested in inflation and second to that: stability of the pound. I suppose this is all common sense if you think about it. Quote Link to comment Share on other sites More sharing options...
BandWagon Posted December 1, 2005 Share Posted December 1, 2005 (edited) Yea that's what I have always thought, but one always wonders. This is confirmation that THEY REALLY DON'T CARE ABOUT HOUSING PER SE. They are interested in inflation and second to that: stability of the pound. I suppose this is all common sense if you think about it. The Bank's remit doesn't include targeting asset prices. Maybe when this bubble has burst there will be enough political will to finally put an end to boom and bust. Mervyn King is a Fellow of the British Academy, an Honorary Fellow of King’s and St John’s Colleges, Cambridge and holds honorary degrees from Birmingham, City of London, Edinburgh, London Guildhall, London School of Economics and Wolverhampton Universities. He is a Foreign Honorary Member of the American Academy of Arts and Sciences, is on the Advisory Council of the London Symphony Orchestra, is Patron of Worcestershire County Cricket Club and is a Trustee of the National Gallery. That isn't the CV of a man who doesn't care. Edited December 1, 2005 by BandWagon Quote Link to comment Share on other sites More sharing options...
Guest Charlie The Tramp Posted December 1, 2005 Share Posted December 1, 2005 Massive debt does not give financial stability another duty of the BoE. The Bank has to make sure the overall system is safe and secure and that threats to financial stability are detected and reduced. By monitoring and analysing the behaviour of participants in the financial system and the wider financial and economic environment, the Bank aims to identify potential vulnerabilities and risks, with a view to making the system stronger. The Bank's role includes oversight of payment systems - a crucial part of the financial system, which facilitate transactions between individuals, businesses and financial institutions. Quote Link to comment Share on other sites More sharing options...
red Posted December 1, 2005 Share Posted December 1, 2005 Yea that's what I have always thought, but one always wonders. This is confirmation that THEY REALLY DON'T CARE ABOUT HOUSING PER SE. They are interested in inflation and second to that: stability of the pound. I suppose this is all common sense if you think about it. True...so given that, can sterling (bearing in mind stronger dollar & Euro) withstand another rate cut right now? Would that not create a run on the pound? Quote Link to comment Share on other sites More sharing options...
karhu Posted December 1, 2005 Author Share Posted December 1, 2005 The Bank's remit doesn't include targeting asset prices. That isn't the CV of a man who doesn't care. Agreed. I feel much better after hearing this information from the MPC. Just as they didn't care when houseprices went up they won't care on the way down. In fact it sounds like a housing slump is now part of their working model. True...so given that, can sterling (bearing in mind stronger dollar & Euro) withstand another rate cut right now? Would that not create a run on the pound? I really think IRs should go up, but am told they are NOT predicting that and infact may come down in the next quarter :angry: , but another point I was warned that there are HUGE errors in their 2 year projection (obviously). Quote Link to comment Share on other sites More sharing options...
Guest Posted December 1, 2005 Share Posted December 1, 2005 (edited) I'm sorry, I'm a little behind. Which ONS figures particularly? A glance at our front page reveals no ONS stats on prices. "In fact it sounds like a housing slump is now part of their working model." Which would be consistent with the continued non-appearance of John Prescotts 200,000 "cheap houses", down to 20,000 as I last heard, complete with two pissed-off lenders. Edited December 1, 2005 by megaflop Quote Link to comment Share on other sites More sharing options...
Guest muttley Posted December 1, 2005 Share Posted December 1, 2005 Agreed. I feel much better after hearing this information from the MPC. Just as they didn't care when houseprices went up they won't care on the way down. In fact it sounds like a housing slump is now part of their working model. I really think IRs should go up, but am told they are NOT predicting that and infact may come down in the next quarter :angry: , but another point I was warned that there are HUGE errors in their 2 year projection (obviously). So is he/she predicting deflation? Quote Link to comment Share on other sites More sharing options...
BuyingBear Posted December 1, 2005 Share Posted December 1, 2005 The essence of it (of interest to this board): 1. IRs are looking like they will stay the SAME or FALL over the next quarter. 2. ONS figures are not to be trusted. Their main concern was that the figures are out of date by the time they are published. Hardly a revelation, look at any of the MPC minutes and you can see that they express distrust of ONS publicly. Quote Link to comment Share on other sites More sharing options...
karhu Posted December 1, 2005 Author Share Posted December 1, 2005 I'm sorry, I'm a little behind. Which ONS figures particularly? A glance at our front page reveals no ONS stats on prices. All of them. You know how sometimes you have some gripes relating to your job. Well the MPC it seems is mad because the ONS reports figures that are up to 12 months out of date (I don't understand this at all; I thought they were rigged anyway). Oh and also told that the MPC have quite a few economists working for them behind the scenes. So is he/she predicting deflation? No. Expecting growth to increase next year. Quote Link to comment Share on other sites More sharing options...
spoon Posted December 1, 2005 Share Posted December 1, 2005 what's private? Quote Link to comment Share on other sites More sharing options...
karhu Posted December 1, 2005 Author Share Posted December 1, 2005 (edited) what's private? Don't know, is this public knowlegde? I've never heard the MPC admit that the housing market is doomed. Edited December 1, 2005 by karhu Quote Link to comment Share on other sites More sharing options...
karhu Posted December 1, 2005 Author Share Posted December 1, 2005 I think the energy of truth is here with HPC. It's not unlikely that the PTB are reading here, second hand. (An influential friend thought I might be PM (when I was in my 20s).) They are just people. This is their moment, like Jesus in the Garden of Gethsemane, not to refuse the cup. Gordon. Or Mervyn. Or both. (Or neither.) Yea nothing shocked me about what I heard. Actually started to nod my head Quote Link to comment Share on other sites More sharing options...
Jason Posted December 1, 2005 Share Posted December 1, 2005 Yea nothing shocked me about what I heard. Actually started to nod my head So you met this person? Or heard it through a friend of a friend of a friend ... chinese wispers anyone? I'm sure you're correct in reporting their views tho... Quote Link to comment Share on other sites More sharing options...
spoon Posted December 1, 2005 Share Posted December 1, 2005 Don't know, is this public knowlegde? I've never heard the MPC admit that the housing market is doomed. oh they actually conceded that house prices were doomed? yes that is quite a revelation i guess given Mervyn's recent insistence that the market has stabilised. surprised to heat that your 'source' is certain the next move in rates is down. Quote Link to comment Share on other sites More sharing options...
Guest muttley Posted December 1, 2005 Share Posted December 1, 2005 Economy growing.......IRs falling....and housing market doomed!! Quote Link to comment Share on other sites More sharing options...
karhu Posted December 1, 2005 Author Share Posted December 1, 2005 So you met this person? Or heard it through a friend of a friend of a friend ... chinese wispers anyone? I'm sure you're correct in reporting their views tho... Sorry, can't say. But just to make a last point, which has been debated at length on here. They rejected the hpothesis that the housing market will stagnate on the long term, but it may in the short term. Quote Link to comment Share on other sites More sharing options...
Guest Posted December 1, 2005 Share Posted December 1, 2005 (edited) "IRs are looking like they will stay the SAME or FALL over the next quarter." Well with this, it's looking like David Smith may move from the "crisp packet economist" section over to the Ferrero Rocher. (A quote from a dissenting poster on his forum) Edited December 1, 2005 by megaflop Quote Link to comment Share on other sites More sharing options...
karhu Posted December 1, 2005 Author Share Posted December 1, 2005 (edited) oh they actually conceded that house prices were doomed? yes that is quite a revelation i guess given Mervyn's recent insistence that the market has stabilised. surprised to heat that your 'source' is certain the next move in rates is down. Not certain, as I said + the opinion of one member. At present looks like hold or drop in next quarter. What are the markets saying? I'm bullish about IR rises, but may be proved wrong. I agree that this is not a revelation; I guess MPC member can't even make a slip even after a few glasses of wine. Just thought it might be interesting. I've tried to focus this on topics relevent to HPC. Edited December 1, 2005 by karhu Quote Link to comment Share on other sites More sharing options...
Elizabeth Posted December 1, 2005 Share Posted December 1, 2005 This is probably a DOH! question, but could somebody explain "MPC". Thanks. Quote Link to comment Share on other sites More sharing options...
Guest Posted December 1, 2005 Share Posted December 1, 2005 (edited) This is probably a DOH! question, but could somebody explain "MPC". Thanks. This is very cheeky, but http://www.rockthisbitch.com/ EDIT - Sorry Elizabeth. I expected someone else to answer properly before me. Monetary Policy Committee. Edited December 1, 2005 by megaflop Quote Link to comment Share on other sites More sharing options...
Guest Charlie The Tramp Posted December 1, 2005 Share Posted December 1, 2005 This is probably a DOH! question, but could somebody explain "MPC". Thanks. MPC - Monetary Policy Committee See Glossary bottom of page for abbreviations Quote Link to comment Share on other sites More sharing options...
karhu Posted December 1, 2005 Author Share Posted December 1, 2005 This is very cheeky, but http://www.rockthisbitch.com/ EDIT - Sorry Elizabeth. I expected someone else to answer properly before me. Monetary Policy Committee. Quote Link to comment Share on other sites More sharing options...
spoon Posted December 1, 2005 Share Posted December 1, 2005 karhu feel free to detail any other snippets pertaining to interest rates, forthcoming data etc! the markets are projecting a path of rates that is broadly unchanged for at least the next 12 mnths. the real choppy one at the moment is the Euribor strip . market has reached consensus that ECB will hike perhaps in December but by how much and whether it will be the start of a hiking cycle is still uncertain. the ECB hasn't actually put rates up that often in it's relatively short history. leading bond fund Pimco thinks interest rate in the US are going to plummet next year. Quote Link to comment Share on other sites More sharing options...
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