Jump to content
House Price Crash Forum
Sign in to follow this  
I Told You So

Interest Rates

Recommended Posts

Short Sterling has collapsed this morning, we're almost looking at a rate rise in June.

Hi

PLEASE PLEASE PLEASE Adjust short sterling, how many many times do I have to say, June 95.290

, so 4.71% less adjustement, conservative 0.15% gives an an Estimate of BOE base rates at end of june 4.56%, or a 0.06/0.25% or a About 24% chance of a rise.

Why do you need to adjust short sterling, because

http://www.bankofengland.co.uk/publication...etin/qb0404.pdf

Pages 9-10

For heavens sake even the April rate due to mature in a couple of days is 95.37 so implying, by you logic rates will be 4.63% (see a 0.13% over estimate, from reality) or almost a 50% chance of an increase before the end of the month, by your logic!

YOU NEED TO ADJUST SHORT STERLING, THE LONGER OR THE MORE YOU NEED TO ADJUST.

Share this post


Link to post
Share on other sites

I know its important and small rises or falls in interest rates makes big differences to the market. I would like to see a rise to stop the upward trend in the "debt bubble" which I believe is more important to most peoples lives and the economy than house prices, but I believe the truth is rates could stay as they are for the next 8 months before international pressure will become too great. These threads can go on daily as rate indicators flutuate for ages and ages. Try and see the wood, forget about the trees.

Share this post


Link to post
Share on other sites

I suppose by your logic we will be have a cut shortly :lol:

Where did he claim that?

What's your game plan if rates do indeed stay flat? I'll define flat as a range: 4.25 - 4.75.

If rates rise above 5% this year I think prices will crash next summer.

Share this post


Link to post
Share on other sites

I suppose by your logic we will be have a cut shortly :lol:

?!?!?

Sorry, if trying to teach you something offends you. I just thought knowing what short sterling was, and was not implying would help. However I do get a bit testy when I've said this to this board at least half a dozen times, and then as soon as S/S moves then everyone and their dog, starts to say they are pricing in a rate rise , by tea time.

Share this post


Link to post
Share on other sites

True true true ...............

But it is down by quite a bit this week is it not?? Which means a rise is more likely, and as I was exploring on another thread if fixed rate mortgages are pushed up by the market interest rate surely that will have an effect??

Share this post


Link to post
Share on other sites

True true true ...............

But it is down by quite a bit this week is it not?? Which means a rise is more likely, and as I was exploring on another thread if fixed rate mortgages are pushed up by the market interest rate surely that will have an effect??

It is, because the economy is stronger, than people expected, so the reasons for a cut have dimished.

To get a crash in housing you need a large movement in interest rates in a short time frame. (THE BOE think its 3% within 12 months), personally I would suggest less, perhaps 2% in 12 months. The odd 0.25% up here or down there will only slow or speed up HPI Marginally.

Share this post


Link to post
Share on other sites

Hi

PLEASE PLEASE PLEASE Adjust short sterling, how many many times do I have to say, June 95.290

, so 4.71% less adjustement, conservative 0.15% gives an an Estimate of BOE base rates at end of june 4.56%, or a 0.06/0.25% or a About 24% chance of a rise.

Why do you need to adjust short sterling, because

http://www.bankofengland.co.uk/publication...etin/qb0404.pdf

Pages 9-10

For heavens sake even the April rate due to mature in a couple of days is 95.37 so implying, by you logic rates will be 4.63% (see a 0.13% over estimate, from reality) or almost a 50% chance of an increase before the end of the month, by your logic!

YOU NEED TO ADJUST SHORT STERLING, THE LONGER OR THE MORE YOU NEED TO ADJUST.

KON. Do your calcs for short Sterling September contract again :D

Share this post


Link to post
Share on other sites

Please correct me if I'm wrong, but doesn't short sterling have to rise to indicate a weak pound and thus prompt a rate rise?

Edited by Bingley Bloke

Share this post


Link to post
Share on other sites

KON. Do your calcs for short Sterling September contract again :D

Why, and don't you say please when you ask? Is the maths over your head is it....ohh yes I forgot it is :lol:

Anyway to save you the work as I've explained before, look here , already calculated for you BBA Repo rates. (rates have move about 0.04 since then, so now we are implying a rate increase in about a years time.)

http://www.bba.org.uk/bba/jsp/polopoly.jsp?d=228&a=1451

	26-AprGBP	O/N	4.396671W	4.496672W	4.495003W	4.491671M	4.488332M	4.493333M	4.505006M	4.551679M	4.608331Y	4.66500

ohh anyway I'll do the calculation for Sept for you,

Sept 95.200 so 4.80 less conservative 0.15% give a rate of 4.65% (or about 60% chance of a rate increase)

Why is short sterling being given so much credence by this board BTW when they can't seem to calculate the rates, and when it was showing falls it was poo pooed as rubbish and highly volatile?

Share this post


Link to post
Share on other sites

Here's some interesting discussion of the way IRs might be going:

http://www.citywire.co.uk/News/NewsArticle...nuKey=News.Home

Thanks for the link. Very interesting article.

My favorite excerpts:

The latest CML figures show that only 26% of mortgages were at fixed-rates at the beginning of this year, compared with 61% last year, with the proportion as high as 76% in the fourth quarter of 2005.

That's an amazing drop in fixed-rate mortgages.

Mortgage adviser John Roberts of Hertfordshire-based, Flexible Finance Online agrees. ‘I wouldn’t be surprised to see fixed-rates go up by as much as 1%,’ he says. However, he points out that there is a discrepancy between what the money markets are telling us and what homebuyers are expecting. ‘Lenders are putting up their fixed rates but homebuyers are expecting the Bank of England to reduce rates.’

Current homebuyers are being very foolish.

So how far does he go in highlighting the advantages of fixed-rates – even when they are more expensive than the best discounted-rates? ‘I tell clients that if they can afford the fixed-rate it doesn’t matter what the price is. What they are buying is peace of mind. The discounted-rate might be cheaper than a fixed-rate at the moment, but it could easily be a lot more expensive in future.’

Unless these buyers are absolutely certain that their jobs are secure and their wages are going to rise at a pace that matches rising interest rates, they are going to be in serious trouble.

I've never understood why anybody would buy a home with a fixed rate. If interest rates go down, you can always refinance at the lower rate.

Share this post


Link to post
Share on other sites

Taken for a secong that the economy is better then expected.

"The figures look bad, we must make the figures look better….." Said the Politician..

"Easy" Said the other politician, reaching for the figures and his calculator.. Whilst outside people still waited for operations, they were assured that the waiting lists were shorter and that soon they would be able to join the waiting list.

:)

Bless..

So what figures can't be changed, would reflect consumer spending…?? An absolute figure..

Would that be VAT…?????

http://www.theregister.co.uk/2006/04/25/vat_fraud_figures/

Okay.. The figures look bad, we can't change them..

Damn upsurge in criminal vat avoidance.. It makes it seem like people spent less last year…

Well the high street would have announced hard trading conditions if that were so…

So it must be criminals… they are stealing the tax,… boo hooo….

Apom thought that he felt his back was getting damp, but when he enquired of the politician stood behind him what was happeneing the politician assured him that it was raining..

Apom wandered what had made the zipping noise just after the rain had stopped……

Fool me once and shame on you.. Fool me twice and shame on me…..

Share this post


Link to post
Share on other sites

Why is short sterling being given so much credence by this board BTW when they can't seem to calculate the rates, and when it was showing falls it was poo pooed as rubbish and highly volatile?

Hey, take it easy. I only asked! Just because the housing market and interest rates are not going your way, there's no need to get all ratty..... :P

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 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%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.