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Realistbear

Chinese Move I R Up And Send House Sales Down 30%

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http://www.thestandard.com.hk/news_detail....&d_str=20060403

Interest rate hike weakens buying as sales drop 30pc

Sales of new apartments plummeted nearly 30 percent over the weekend as the latest quarter percentage point increase in interest rates dampened buying sentiment.

Raymond Wang

Monday, April 03, 2006

Sales of new apartments plummeted nearly 30 percent over the weekend as the latest quarter percentage point increase in interest rates dampened buying sentiment.
Real estate agents said about 38 units in the primary market were sold, compared with 53 units the previous weekend.
Hong Kong's residential property market has slowed as banks raised rates nine times since March last year.
Last week, local banks including Bank of China (HK) and Standard Chartered Bank, raised their prime lending rates to 8.25 percent from 8 percent

Shows what .25% hike can do in the world's fastest growing economy--and from a high baseline of 8%. Imagine what .25% will do in the UK from a baseline of 4.50%. :o

Turmoil in the world's markets should not be underestimated as panic sell-offs can happen anytime and anywhere and they can happen without much warning.

SA are following the worldwide move to raise the rates leaving the UK increasingly isolated and alone among the community of nations:

http://www.busrep.co.za/index.php?fSection...ticleId=3187388

Reserve Bank to tighten monetary policy

April 3, 2006

Johannesburg -
A global move towards tighter monetary policy is being echoed in South Africa
with Reserve Bank governor Tito Mboweni warning Parliament that the bias locally is a move away from a cut in interest rates.
Addressing Parliament's Portfolio Committee on Finance on Wednesday, Mboweni said: "I can tell you the bias was on the upside... the bias is on the tightening side, it is not on the loosening side."

http://www.godubai.com/gulftoday/article.a...ection=Business

Interest rates on deposit certificates hiked

ABU DHABI: The UAE Central Bank on Sunday increased interest rates on deposit certificates being issued by banks in the country.
According to a Central Bank statement, the move is to match with the new interest rates in inter-bank transactions as per the US dollar assets on the international market beginning from last Wednesday

AND, this one just in from Japan:

http://search.japantimes.co.jp/cgi-bin/nb20060403jp.html

JAPANESE PERSPECTIVES

Things to watch as BOJ restores interest rates

By TERUHIKO MANO
The Bank of Tokyo-Mitsubishi UFJ, Japan's biggest banking group, raised the rates it offers on time deposits with a maturity of one year or over on March 20. The increase varies according to the size of the deposit and the length of maturity. The annual rate for a five-year deposit under 3 million yen, for example, has climbed to 0.23 percent from 0.1 percent. The rate hike, the bank's first in about five years, was copied by many other financial firms. It was spurred by criticism that Japanese banks weren't raising the rates on deposits as quickly as the rates for loans, which fluctuate in accordance with the market.
A large amount of yen-denominated funds have been raised by taking advantage of Japan's virtually zero interest rates to borrow and reinvest in currency-denominated tools bearing higher interest. There will naturally be a backlash once expectations rise for a more expensive yen. The large daily fluctuations in exchange rates recently are evidence the market is already becoming jittery about the future of the yen interest rate
.

Tick tock, tick tock........ :o

Edited by Realistbear

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RB is providing the information today that will shape the future. Anyone who decides to ignore it is a fool. Keep up the good work.

Simply superb.

Edited by delite1

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Realistbear, you spend an impressive amount of time dredging this stuff up. Not that it's not interesting.

btb

i would be interested in knowing what you would find interesting.

this is a hpcrash site with bears and bulls commenting on the situaation and trends.

most rational people have concluded that the UK hpi is mainlya result of excess liquidity caused by readily available debt, people willing to take on debt and low interest rates.

i think most of us here( bulls and bears) know that the ,most likely change in sentiment will be when the debt bubble bursts. this might be under its own wieght, but rising interest rates will accelerate it.

rbs good work in identifying what is happening is an early indicator of the likely trajectory and timing of the turning point.

if you dont work on facts you might as well go to mystic meg to find out when the market will change trajectory

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The question is what do we do knowing what we know?

The only firm decision I have made is to stay away from IR sensitive assetts which is why I have not bought a house yet. IMO, the pound looks like it will be the fall guy on the world currency market simply because Gordon will not raise the rates and kill his HPI creation. Unless, of course, he listens to his new advisor Al Greenspan who has already warned the US housing market that the froth markets on the coasts can expect some pain when the imbalances unwind as they are doing right about now.

The world markets are beginning to see Gordon's unwillingness to respond to world IR trends and the pound is suffering accordingly. There is a lot of pain to come and house prices are like a duck on an open pond surrounded by hunters armed with 10 guage "streetsweeper" shotguns. Its going to be carnage.

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The question is what do we do knowing what we know?

Exactly. In a free market it would be obvious that rates would have to rise, but in a government-controlled market, anything could happen.... in many respects, being forewarned just gives us more time to worry about what Brown will do.

Personally I'm probably going to ship more money out of Sterling today. I still think Brown will be forced to raise rates by the late summer, but I'm not willing to bet tens of thousands of pounds on it.

Unless, of course, he listens to his new advisor Al Greenspan who has already warned the US housing market that the froth markets on the coasts can expect some pain when the imbalances unwind as they are doing right about now.

More likely, I suspect, he's waiting for some outside force he can use to blame for the crash... like globally rising interest rates :).

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Spain adds its voice to the ECB hawks:

http://www.iii.co.uk/news/?type=afxnews&ar...&action=article

MADRID (AFX) -
The Bank of Spain said it sees current euro zone interest rates as "expansive
", even after the March 2, 25 basis point hike by the European Central Bank.
In its monthly report, the Spanish central bank said: "The ECB monetary policy remains clearly expansive."
The current low interest rates are in-line with the recent weakness in domestic demand, the bank added.
The ECB raised rates as a response to continued risks to price stability and with an improved outlook for euro zone economic growth, the bank said.
The bank also noted that the dip in economic growth in the euro zone at the end of 2005 was "a transitory phenomena".

Did anyone hear Gordon mumbling "damn the torpedoes...." :lol:

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£ is really struggling again today against most currencies including the mortally wounded US$.

Warnings about increased inflation over the summer on the BBC too

BOE will have their hand forced soon. :D

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£ is really struggling again today against most currencies including the mortally wounded US$.

Interestingly, it's going up against the Canadian dollar...

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btb

i would be interested in knowing what you would find interesting.

I think BTB's double negative has confused you - "Not that it's not interesting" = it is interesting.

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btb

i would be interested in knowing what you would find interesting.

this is a hpcrash site with bears and bulls commenting on the situaation and trends.

most rational people have concluded that the UK hpi is mainlya result of excess liquidity caused by readily available debt, people willing to take on debt and low interest rates.

i think most of us here( bulls and bears) know that the ,most likely change in sentiment will be when the debt bubble bursts. this might be under its own wieght, but rising interest rates will accelerate it.

rbs good work in identifying what is happening is an early indicator of the likely trajectory and timing of the turning point.

if you dont work on facts you might as well go to mystic meg to find out when the market will change trajectory

Entirely agree.

Interestingly, it's going up against the Canadian dollar...

And unfortunately the Yen.

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Realistbear, you spend an impressive amount of time dredging this stuff up. Not that it's not interesting.

thanks from me as well - your time and effort is helping me understand things that I would have never een aware of

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Realistbear, you spend an impressive amount of time dredging this stuff up. Not that it's not interesting.

btb

humble apologies

i mis-read your post which i took that you did not find it interesting.

the don

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The question is what do we do knowing what we know?

The only firm decision I have made is to stay away from IR sensitive assetts which is why I have not bought a house yet.

While some on here have STR'd, there's a lot of us potential FTB's here too. Is there anyone with a big calculator who car work out some ratios of interest rate rises versus price drops as to whether it's better to buy on a 10 / 25yr fixed rate at current prices or let prices drop and mortgage at a higher IR - There must be a balance point somewhere.

I know borrowing less capital is a better idea overall as IRs could come back down, but long term fixed rate mortgages can offset that if the early redemption fee isn't too high, and this might give all of us an Idea as to if and when FTB's can re-enter the market.

E.G:

IRs up by 30% (assuming average mortgage is at roughly 5%) = interest rates to 6.5%

House Prices drop 30 % (assuming average 3 bed semi at £170000) down to £119000

which is cheaper as a monthly payment? now or wait?

someone should be able to knock up a spreadsheet or graph with the monthly mortgage for different IR / House price changes, with a balance point on it.

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£ is really struggling again today against most currencies including the mortally wounded US$.

BOE will have their hand forced soon. :D

O yes the £ is really taking a battering today it’s dropped approximately nothing against the $ in the last 5 months.

Come on tell us where this is really going to make any difference – is the US going to raise IR’s again so we can see no change in the £ again

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It may seem odd but I believe the pound is holding up because the world believes what Gordon tells them--that inflation is actually 2% and that the "illegal" deficit was planned and that manufacturing and employment are on the up. Its funny how the perception of a "Miracle Economy" can blind people to the truth. Add to the mix that the world seems to believe the Rightmove et. al. data that house prices are rising inexorably despite affordability and debt issues.

Bottom line: if the markets see a crack sterling is going down hard and fast. Gordon is frantically going around with his bucket of paste keeping the cracks from appearing through the wizardry of statistics and moving goal posts--and the NuLabour press.

Pound hit 1.7249 today--but shot up at around 2 p.m. by almost 1.5 cents--a phenomenal rise.

Here is why:

http://www.iii.co.uk/news/?type=afxnews&ar...&action=article

LONDON (AFX) - The dollar's early week recovery failed to find renewed upward impetus this afternoon from a key gauge into the state of the US manufacturing sector.
The Institute for Supply Management revealed that the pace of manufacturing growth decelerated in March. Its main index fell to 55.2 pct in March from 56.7 pct in February against expectations of a modest pick-up to 57.3 pt.
"The ISM was disappointing and there's a question mark about the robustness of the US economic recovery," said Neil Mackinnon, chief economist at ECU Group.
"It's back to square one for the dollar," he added
.

Shows you what a knife edge the markets are on. Imagine how many billions were made on the currency markets with a 1.5 cent move in a few seconds! Anyone with advance notice of this news would have made a bundle.

Edited by Realistbear

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  • 301 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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