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John The Pessimist

Vive La Recovery! - French Bank Dumps Uk Assets - Merged Topics

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Alain Bokobza, head of the French bank’s global asset team, said much of Britain’s growth is driven by excess leverage and a housing bubble. “This is due to lax monetary policy that needs tightening. It is not sustainable,” he said.

The UK economy summed up in one paragraph.

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That's confirmed by the Funding For Lending scheme now being extended for UK SMEs. UK rebalancing you know :rolleyes:

It's come to something when the French are able to report on how appallingly badly the LibLabCon runs the UK. The Germans said it a few years ago and now it's even clear to the French.

Edited by billybong

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Wow, wasn't expecting that. Looks like the market's caught up with Osborne and Carney at last!

It is already clear from derivatives contracts that hedge funds have Britain in their sights.

“There has been a change of ambiance. The first point of attack for speculators is in the currency market and we can see that there has been a switch to net short positions,” he said.

irish-uk-personal-insolvency-bankruptcy-

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I'm living in France right now. In the UK the bins get emptied once every 2 weeks. Here, twice a week.

A fireman went knocking on the doors today to check everything out. Never seen this happen in the UK.

Free campsite down the road with facilities for motorhomes.

Just some observations I've made since coming here. Don't seem to have austerity quite the same.

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I'm living in France right now. In the UK the bins get emptied once every 2 weeks. Here, twice a week.

A fireman went knocking on the doors today to check everything out. Never seen this happen in the UK.

Free campsite down the road with facilities for motorhomes.

Just some observations I've made since coming here. Don't seem to have austerity quite the same.

And they get university education that is practically free, in Edinburgh if they choose it.

But they're all p1ss poor because their houses aren't worth as much as ours.

Edited by ingermany

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The trick that the uk has, is to subsidise its workers through in work benefits. It can do this by running a huge deficit and printing its own money. It means that companies love it here as workers are ok to work for low wages compared to living costs, as the in work benefits will top this up. The question is, will the taxes gained from the retail spend by those workers compensate for that deficit in the long run?

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The trick that the uk has, is to subsidise its workers through in work benefits. It can do this by running a huge deficit and printing its own money. It means that companies love it here as workers are ok to work for low wages compared to living costs, as the in work benefits will top this up. The question is, will the taxes gained from the retail spend by those workers compensate for that deficit in the long run?

I think the snake fancies a snack.

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But they're all p1ss poor because their houses aren't worth as much as ours.

Their mistake is not to build them as small as ours, and with too much land. That way they'll never have enough scarcity to generate sustainable housing wealth.

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http://www.telegraph.co.uk/finance/economics/11269253/French-bank-dumps-British-assets-contrasts-UK-sclerosis-with-Francois-Hollande-miracle.html

"France’s Société Générale has advised clients to liquidate British assets and dump sterling before the elections, warning that the UK is badly governed and increasingly prone to political risk.

So far there has been zero structural reform and no improvement in the twin deficits or exports despite a significant devaluation of the currency."

The UK national debt is set to overtake France next year with a higher deficit going forward. So much for the benefits of keeping the pound and staying out of the Euro. Currency devaluation and keeping the pound has just enabled the UK to carry on as before with an economy built on consumer debt and house prices.

Edited by campervanman

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Kenneth Clarke saying on Newsnight that France is stuffed.

He was on the radio about a month ago in full pompous speak saying only the LibLabCon knew how to run the UK.

They know how to run it into the ground that much is for sure.

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The france with a smaller trade deficit than us and a budget deficit half ours, that france?

Yup that France which still has affordable housing (in the old fashioned sense)

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Wow, wasn't expecting that. Looks like the market's caught up with Osborne and Carney at last!

Quite refreshing view, when finally stated outside of hpc.

All I can see post QE, 6 years 0.5%, is a double-down of malivestment, excessive smugness, extreme complacency, and an awful coarseness - go on to many a forum/property-investment forum and they're there telling you best to borrow as much as possible for house, that inflation will kiss the debt away over long term... back to property doubles in value every few years.... expecting champagne ripples out of London to come, to take crazy bubble priced £400K North West standard semis upto £600,000+ valuations.

Bring on some market reality. The VI still totally out of it though, expecting IHT threshold to be set at £1m today... and I'm waiting to see if the political authorities are still grossly misinterpreting values/markets/positions to make such giveaways against rivers of red ink.

An existing paradigm is seldom dispelled by evidence alone. As Keith Thomas has written, "Such systems of belief possess a resilience which makes them virtually immune to external argument." A people whose culture grossly misinterprets certain facts will not necessarily reason their way to a more encompassing worldview until forced to do so by the brunt of economic necessity or military defeat. Reason does not alter values.

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Frances Coppola is still tainted by bubble thinking in my opinion. She may be correct about many points, why people have absolute belief in HPI.

The very fact so few have the courage to stand up and claim prices way too expensive and system is unfair and buyers making reckless foolish decisions - is why we're at the stage we're at with hyperinflated house prices.

Her £750,000 oldies 'who vote' rattling around in their fine homes don't have a pass. Younger buyers with epic mortgage debt made their own decisions. I want HPC rather than her solution of loads of social housing built and stronger tenancies, to lock in other people's HPI.

Frances Coppola on Jun 14th 2014

[..] House prices have risen pretty consistently for over fifty years: yes, in that time there have been three crashes, but the losses in the first two have all been more than recovered, and the losses from the most recent one will soon be recovered too. Property is risky in the short-term, but as a long-term investment it is high-yielding and virtually risk free. And that makes it a better investment for ordinary people than virtually anything else. No wonder people prefer to buy property than save in bank accounts or stocks & shares.

So the fact that property is expensive, and becoming ever more expensive, is actually one of the principal reasons why people want to buy.

Property is expensive to maintain: if you own property, the entire cost of maintaining it falls on you. But maintaining your property maintains its value, and improving it generally improves its value.

in full... http://www.pieria.co.uk/articles/the_british_obsession_with_property

on and on and on with hpi.. other peoples decisions to pay higher prices (renting never ends.. long wave hpi) - but imo, markets can crash hard including seen in US when New York prime brownstone houses crashed 90% from peak value in 1930s. Bring in on.

Also no HPC ahead for her either. We shall see how much of that wealth she sees everywhere is sustainable and real. Values are set at the margin, between buyers and sellers. This non-owner buyer has no intention of meeting current asking prices. Perhaps she hasn't figured on a world where buyers say no, or are stopped by MMR, and the endless wealth from elsewhere stops buying or looks to sell at much lower prices.

Frances Coppola on Jun 10th 2014,

Admittedlly, London house prices do look inflated: but the London boom is mainly driven by rich people putting their money into cash purchases of prime real estate (and overseas buyers borrowing from overseas banks to buy prime London real estate), not by cash-strapped households over-mortgaging themselves to pay off credit card debts.

[..]We do not have a consumer consumption boom any more. We aren't going to have a consumer consumption driven housing crash, either. This isn't nuts (yet), and if there is going to be a crash, it's a long time off.

http://www.pieria.co.uk/articles/consumption_booms_and_housing_busts

Edited by Venger

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HPC cannot happen in an economy where the market is bailed out by the state. The UK is so far down the road of creating free market monsters that are too big to fail to allow it to happen.

Edited by campervanman

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HPC cannot happen in an economy where the market is bailed out by the state. The UK is so far down the road of creating free market monsters that are too big to fail.

You assume the state - and little UK at that - has unlimited capacity to take on debt, after taking on so much private sector debt, to protect vested interests.

This Soc Gen article is flashing warning signs that it does not, and that malivestment has ballooned without improving long term sustainable receivables.

Something which needs bashing into all the VI, with their expectation of Gov always coming along to protect their positions, then later again for massive bailout 2.0... 3.0 ahead?

It reminds me of a couple of B-movies where the VI have immortality and have become so stagnant (dead in mind) and rest of the population/economy in ruins because of the excessive greed.

Expansionary fiscal policies have left many countries with large levels of sovereign debt. High levels of government debt reduces flexibility and increases the risk of financial distress. The rapid buildup of government debt following the 2008 financial crisis restricts the ability of many governments to respond to new crises.

http://www.marketwatch.com/story/the-fed-and-other-central-banks-arent-doing-enough-2014-11-10?page=2

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