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Government tying itself in knots to solve the house price problem


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We've seen the BoE reverse previous pronouncements and day yes they will do negative interest rates but they're not sure how that will work and whether it will do much

Boris has announced govt backed 95% mortgages but he doesn't know how they'll work; the banks don't seem interested

The pensions minister has floated the idea of people using their pension pots to provide house deposits, to some derision from the financial press

I note Rishi has not contributed to any of this. We'll see if he does or doesn't.

I think the govt are seeing falling house prices as a huge political problem, and they're scratching around publicly, in other words desperately, for a solution.

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11 minutes ago, Si1 said:

I think the govt are seeing falling house prices as a huge political problem, 

lol, the first government that says "fook it, let 'em drop" gets my vote! 

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I humbly suggest that they sort out the COVID situation in a competent manner before they worry about anything else, otherwise there wont be an awful lot to govern. House prices should be way down a very long list after COVID.

I suspect, looking at the covid and post covid economy, that is Rishi's position.

Ps/ you forgot brexit

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Government tying itself in knots trying to make it through the day. So much for Free Market, Conviction politics.

This is what happens when you have no consistency of approach. In the end you have the equivalent of farmers feeding subsidised bread to their livestock whilst the population suffers rationing.

 

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We've seen the BoE reverse previous pronouncements and day yes they will do negative interest rates but they're not sure how that will work and whether it will do much

Boris has announced govt backed 95% mortgages but he doesn't know how they'll work; the banks don't seem interested

The pensions minister has floated the idea of people using their pension pots to provide house deposits, to some derision from the financial press

I note Rishi has not contributed to any of this. We'll see if he does or doesn't.

I think the govt are seeing falling house prices as a huge political problem, and they're scratching around publicly, in other words desperately, for a solution.

All of the above are puppets of Cummings.

2.47581237.jpg?w=1280

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Government tying itself in knots trying to make it through the day. So much for Free Market, Conviction politics.

Help to buy showed a lack of belief in the free market.

They should use Covid as an excuse to let prices fall.

True there is the problem of people with massive HTB mortgages - but that was their fault.

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Help to buy showed a lack of belief in the free market.

They should use Covid as an excuse to let prices fall.

True there is the problem of people with massive HTB mortgages - but that was their fault.

All the people i know that used HTB had family money too, it's a gamble they never gave a sh&t about.

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All the people i know that used HTB had family money too, it's a gamble they never gave a sh&t about.

Personally I think HPI is politically a bit like taking cocaine to feel better.  Sooner or later you have to stop and then you feel really really ill.  We have had 20+ years now and it is going to be a really unpleasant come down.

 

One weird thing about HTB is that some places don't seem to have to gone up so much.

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The simple solution is always the best - like house prices fall.

 

Im not 100% is this is a 'house prices cant fall' thing. Any person at he BoE could easily point that out.

A few minutes at houseprices.io helps too.

I have a feeling its some gormless half remembered that high number of house transactions = more economic activity.

And I guess its down to the large number of gormless lawyers and the like in UKGOV and civil service.

The UK has not had a high number of house transaction since 2002ihs, mainly down to HPI.

 

 

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Personally I think HPI is politically a bit like taking cocaine to feel better.  Sooner or later you have to stop and then you feel really really ill.  We have had 20+ years now and it is going to be a really unpleasant come down.

Iceland and Greece went brutal cold turkey. It wasn't pleasant but they are through it and I'd say better shape than us.

 

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The simple solution is always the best - like house prices fall.

 

Im not 100% is this is a 'house prices cant fall' thing. Any person at he BoE could easily point that out.

A few minutes at houseprices.io helps too.

I have a feeling its some gormless half remembered that high number of house transactions = more economic activity.

And I guess its down to the large number of gormless lawyers and the like in UKGOV and civil service.

The UK has not had a high number of house transaction since 2002ihs, mainly down to HPI.

 

 

'the wealth effect' is an oft trotted quasi-academic justification from the BoE, claiming that the advantage of zirp, qe etc is in pumping up asset prices which spills over into the general economy. It is another way of saying official policy is to make the have nots slaves of the haves.

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'the wealth effect' is an oft trotted quasi-academic justification from the BoE, claiming that the advantage of zirp, qe etc is in pumping up asset prices which spills over into the general economy. It is another way of saying official policy is to make the have nots slaves of the haves.

The economy is not linear; economists are dumb as box of rocks.

I get my yearly laugh from the Nobel prize for economics. which the FT, at long last, are correctly quoting as:

https://www.ft.com/content/43274dae-0862-4c02-ae09-b0e10d26dde7

The committee awarding the prize — officially known as the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel — said the theory they developed had been instrumental in developing new and complex auction formats now used around the world, for purposes ranging from the sale of radio spectrum to allocating airport landing slots and setting up emissions trading systems.

Comments:

I wish they'd rename this prize and get rid of the Nobel name, if only to shut up all the grumps who show up every year to say "but it's not a real Nobel". This year, by the way, those grumps posted their annual diatribes over wireless connections using radio spectrum allocated by Milgrom's auction (but it's the research on black holes that they really benefited from...).

 

I think next year the Nobel prize in Literature should be announced jointly with this prize in Economics in memory of Alfred Nobel. We would achieve two things. One is, unlike chemistry or physics, Economics is not a science , then does not deserve being announced in a single basis.  Second, if Literature shares the same announcement day with Economics, people will start to consider Economics as it is, a corpus of narratives than serve to explain the past and a good tool to imagine the future. That's all

 

Every year FT makes this ridiculous claim that this is a nobel prize. It is not. It is a side prize in the memory of someone who hated the pseudoscience that is called economics.

 

 

The sad truth about the economics Nobel is that it is becoming obvious how economics is not a science as Physics or Chemistry is. Sure, many economic "Nobels" have been well-deserved, but in giving a prize every year, you quickly start running out of valuable contributions.
 
Auction theory might be one of the last few areas where you can argue that something valuable was produced. But it's getting harder and harder to find worthy honorees.
 
The pseudo Nobel in economics should switch to a four year calendar. Otherwise in about five years you will start hearing that everyone and their grandma in a top econ department is going to be a Novel prize winner. Even if their contributions are marginal, useless, and obscure.

 

Banking is not economics.

Making up BS levels of leverage to justify high house prices is not banking.

Im guessing this ******** will blow over after covid, with HTB being quietly shelved with maybe some minor prop up.

HTB is becoming toxic now as the initial few HTBers try -and fail - to remortgage.

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Scientists know that they actually know little. Good science of full of uncertainty and self doubt. That's the scientific method.

Economists, strangely, are seldom full of doubt or even empathy for the harm they cause. And they say that makes them scientists.

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Scientists know that they actually know little. Good science of full of uncertainty and self doubt. That's the scientific method.

Economists, strangely, are seldom full of doubt or even empathy for the harm they cause. And they say that makes them scientists.

There was a time when economics was more around multi party interactions, game theory et al.

Now an Economist just sounds pompous as they explain the reason for yeseterday's weather

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Iceland and Greece went brutal cold turkey. It wasn't pleasant but they are through it and I'd say better shape than us.

 

I would agree with you about Iceland - not sure about Greece though.

However sadly I don't think any politician would do that on purpose - even with Covid as an excuse.

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Out of curiosity,

1) what is the CCPV situation?

2) what would you do?

 

I dont know what ccpv is.

 

I will tell you what i do do:-

1. I pay may taxes, thus enabling the executive to enact policy.

2. I vote for that executive when the time comes and I try to do so as an informed citizen.

3. I obey the laws of the land as bought in by that executive.

4. I try to follow all COVID restrictions where I possibly can/understand them.

In return I expect to be governed wisely, justly, efficiently and effectively.

It is not for me to state what I would or would not do in such a representative democracy, I dont have all the facts....neither do HM Opposition.

You may have guessed that I think that the ridiculous come back of "what would you do?" is not a credible position, although the PM seems to use it repeatedly with the opposition. All the various regional leaders with their various views (biased by VI) is a symptom of the ineffectiveness of this current government IMPO.

The physical state of the PM yesterday was a metaphor for this period in our history. He looked like he didnt care and the fact that he was allowed on camera in that state shows how dysfunctional things really are. No other previous PM would have been wheeled out looking like that...he looked like he'd just had an entire petting zoo on his shoulders.

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1 hour ago, msi said:

There was a time when economics was more around multi party interactions, game theory et al.

And that's what the Nobel prize was effectively just awarded for - ways to use those to discover price. Seems legitimate.

The idea that economists are stupid is risible. Some may be, but a lot are trying to model complex human behaviour that is not easy to model due to the number of variables. If you are looking at modelling it from the bottom up using agent-based modelling it is a lot like weather forecasting, in fact, as is the use of ensemble models.

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.

The idea that economists are stupid is risible. 

Who says they're stupid? We just said it isn't science. And no it isn't like weather forecasting because the latter disaggregates to immutable physical laws whereas the former doesn't.

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I dont know what ccpv is.

Lol. It is amusing how strenuously some people dance around not admitting its origins.

 

I dont have all the facts....neither do HM Opposition.

Are you implying that the government may be doing the right thing based upon facts which they have exclusive access to?

 

the ridiculous come back of "what would you do?" is not a credible position

It is not a comeback, hence my saying "out of curiosity". I genuinely want to know what you think the government should be doing.

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  • 433 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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