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Realistbear

E U Commissioner Issue I R Warning

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http://framehosting.dowjonesnews.com/sampl...11100026&Take=1

May 2006 11:10 GMT DJ EU Commissioner Almunia Warns Consumers On Interest Rates

MADRID (Dow Jones)--European Union Economic and Monetary Affairs Commissioner Joaquin Almunia Friday
warned that heavily indebted consumers
- like those in Spain - should beware of rising interest rates.
"We have to warn consumers it's not likely interest rates will come down in the coming months... on the contrary,
the market is expecting a continued rise
," said Almunia, speaking on the sidelines of a book presentation in Madrid.
Largely as a result of large investments in real estate, Spanish consumers' debt has doubled to 114% of income since the early 1990s, making them vulnerable to a sharp rise in interest rates.
The European Central Bank has raised rates twice since December to their current level of 2.5% and most economists expect them to end the year
at or above 3%
.

_______________________________

As IR begin to soar the HPI-MEW culture will be hit hard. It's just a question of weeks now before the stresses in the economy hatch out.

Edited by Realistbear

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It's just a question of weeks now before the stresses in the economy hatch out.

Really? Let's see. We'll check whether your prediction will come true.

How many weeks do you want to give it? Presumably by saying "weeks" you expect something to happen in less than 1 month. And what do you predict will happen?

Or is this more of your ridiculous spin?

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Really? Let's see. We'll check whether your prediction will come true.

How many weeks do you want to give it? Presumably by saying "weeks" you expect something to happen in less than 1 month. And what do you predict will happen?

Or is this more of your ridiculous spin?

QUOTE: "We have to warn consumers it's not likely interest rates will come down in the coming months... on the contrary, the market is expecting a continued rise," said Almunia, speaking on the sidelines of a book presentation in Madrid."

If you had read the article you would have seen that the time period referred to is not specified other than by the expression "the coming months." In other words, the commissioner is trying to convey that relief is not coming anytime soon but rather things are going to get worse for those consumers who have borrowed too much.

If you are wearing your usual; "pedantic pete" hat I suppose your objection is my use of weeks rather than months as the referenced time unit? "Weeks" is a bit like referring to "years" only shorter. When you say something is "years away" it may include a period greater than 4 years, or less. The context should give you a clue and in this case it is my opinion (that is allowed) that the problems will arrive within a short time period. We have already seen the problems beginning in the UK already--see the insolvency statistics that are increasing as IR rise. If the current trend continues the problems will indeed get worse over the coming weeks, if not days.

I am afraid you will have to get used to people having the right to give their own opinions and in this case it is my view that we will see increasing problems over the course of the next weeks and in the upcoming months and even the next few years. If you had been keeping up with the news you would know that the ECB are perhaps increasing the IR by .50%. This is planned in June--or a few weeks away (it might even be days--not sure). With a hike of that magnitude the problems the commissioner speaks off will be brought out very quickly indeed.

And I think we have covered this topic before: what you consider "spin" may be another person's different interpretation. One thing I have noticed is that whenever I post a topic that contains an IR warning the bulls (and trolls) are drawn out of hiding to suggest its spin. It is very scary news indeed for the borrowers and in a few weeks or days time the ECB may make matters even worse for over-leveraged investors. IMO, of course.

Edited by Realistbear

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Or is this more of your ridiculous spin?

I don’t believe it is fair of you to accuse Realistbear of “ridiculous spin”. He simply posts interesting news articles for the members here to read. His comments at the bottom of his posts are to help “the average guy” understand how the related news article affects them. I personally am very grateful for his contributions here.

As IR begin to soar the HPI-MEW culture will be hit hard.

Not spin, surly just common sense. But it helps ordinary people understand it a little more.

It's just a question of weeks now before the stresses in the economy hatch out.

Again I don’t believe this to be “ridiculous spin”, maybe his personal view based on common sense and the facts in the news article, but clearly not ridiculous. Also I don’t think it was meant to be taken literally, as in an exact timescale but an indication that things will be changing soon. I imagine it may be more of a figure of speech rather than anything else.

I understand you may be concerned about the story and how it may affect you personally, but equally there are as many people on the other side who may find this news encouraging. Please let them have their moment as there has been a shortage of good news for them over the last 10 years or so ! ;)

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I don’t believe it is fair of you to accuse Realistbear of “ridiculous spin”. He simply posts interesting news articles for the members here to read. His comments at the bottom of his posts are to help “the average guy” understand how the related news article affects them. I personally am very grateful for his contributions here.

Not spin, surly just common sense. But it helps ordinary people understand it a little more.

Again I don’t believe this to be “ridiculous spin”, maybe his personal view based on common sense and the facts in the news article, but clearly not ridiculous. Also I don’t think it was meant to be taken literally, as in an exact timescale but an indication that things will be changing soon. I imagine it may be more of a figure of speech rather than anything else.

I understand you may be concerned about the story and how it may affect you personally, but equally there are as many people on the other side who may find this news encouraging. Please let them have their moment as there has been a shortage of good news for them over the last 10 years or so ! ;)

A truly common sense understanding of the thoughts I was trying to convey!

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Largely as a result of large investments in real estate, Spanish consumers' debt has doubled to 114% of income since the early 1990s, making them vulnerable to a sharp rise in interest rates.

By this does he mean the Spaniards have been on a bit of a property bender, buying multiple, large properties - or just that foreigners have pushed up the prices of property so far that the standard spanish ftb hovel is out of reach and they have to stretch 2 or 3 times higher just to buy a poxy apartment?

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It isnt difficult to ignore CO as he does obviously ignore the 'ridiculous spin' of the VI property bull.....

'Weeks' could mean 10 weeks <_< though CO has limited it to 4 for his own thinking, which means CO is right and RB is wrong if it takes more than a month..... Isnt that right :P

Some very good articles are posted by RB........ As with everything though, bull or bear shall comment as an individual....... Claim and counter-claim....

I put it to CO to find these stories FIRST and post them with a positive bull heading.......

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Please let them have their moment as there has been a shortage of good news for them over the last 10 years or so ! ;)

I must contest this.

There has been plenty of good news in Internet Stocks and Houses.

Buy low, sell high.

EDIT - Damn, I forgot to add my V.I. spin again. "Buy property now, and you have a house to live in rather than your shiny gold to look at which won't keep you warm and dry!"

Edited by megaflop

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The writing's on the wall, but most will refuse to read it.

Mervyn King was sending the same kind of message recently. We are in an IR tightening environment and the past several years has been one long orgy of spending. HPI-MEW has been out of control and millions have jumped on the bandwagon incurring debt levels that will be impossible to service in the changed economic climate.

As the ECB Commissioner points out, there is trouble ahead for many who have been on the bandwagon and who are now in debt over their heads. Its the right recipe for a crash.

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My partner is 17 weeks pregnant - can you explain that?!

There was a film called 9 and a half weeks, hmmm.

55 Days at Peking.

The list could go on!

Yep and what about all those kids that are 18 months old. Surely that should be 1 year and a half?!

NDL

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Yep and what about all those kids that are 18 months old. Surely that should be 1 year and a half?!

NDL

Kennedy's presidency is normally expressed as "1000 days."

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By this does he mean the Spaniards have been on a bit of a property bender, buying multiple, large properties - or just that foreigners have pushed up the prices of property so far that the standard spanish ftb hovel is out of reach and they have to stretch 2 or 3 times higher just to buy a poxy apartment?

The Spanish market has been largely driven up by the Spanish themselves rather than foreigners. The change from the peseta to the euro gave the taxman an ideal opportunity to discover the peoples true wealth so money was laundered through property which drove up demand and therefore prices. Now many estates are only at 30-40% occupancy. Once people realise their investment is losing value I think there will be a stampede to convert back to cash - oversupply and price crash.

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'Weeks' could mean 10 weeks

The writing's on the wall, but most will refuse to read it.

My partner is 17 weeks pregnant - can you explain that?!

There was a film called 9 and a half weeks, hmmm.

55 Days at Peking.

Yep and what about all those kids that are 18 months old. Surely that should be 1 year and a half?!

Kennedy's presidency is normally expressed as "1000 days."

:lol: Ha ha ok guys there’s no need to screw Casual Observer into the ground !! I think he has probably got the message now !

Oh, you lot don’t show any mercy do you ! :lol:

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The Spanish market has been largely driven up by the Spanish themselves rather than foreigners. The change from the peseta to the euro gave the taxman an ideal opportunity to discover the peoples true wealth so money was laundered through property which drove up demand and therefore prices. Now many estates are only at 30-40% occupancy. Once people realise their investment is losing value I think there will be a stampede to convert back to cash - oversupply and price crash.

The Spanish have also been on a massive bling bling borrowing binge that would even put some our most ostentatious MEW-ers to shame.

A centuries-old culture of frugality has been destroyed by just a couple of decades in the EU. Spain on paper is richer than ever, but that has not translated into a better lifestyle for most.

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:lol: Ha ha ok guys there’s no need to screw Casual Observer into the ground !! I think he has probably got the message now !

Oh, you lot don’t show any mercy do you ! :lol:

You're only screwing yourself, believing that this particular item of news is going to cause any "stresses in the economy to hatch out".

I notice no-one's explained what exactly is predicted to happen to the economy within a matter of weeks. House prices to crash 30%? A recession to start? Put your money where your mouth is and tell me exactly what's predicted to happen, and when.

Because I remember RB telling us all several times that a snippet of news he produced was evidence of an immediate HPC. And then it didn't happen, and he moved onto something else.

Edited by Casual Observer

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You're only screwing yourself, believing that this particular item of news is going to cause any "stresses in the economy to hatch out".

I notice no-one's explained what exactly is predicted to happen to the economy within a matter of weeks. House prices to crash 30%? A recession to start. Put your money where your mouth is and tell me exactly what's predicted to happen, and when.

Because I remember RB telling us all several times that a snippet of news he produced was evidence of an immediate HPC. And then it didn't.

The HPC is an ongoing trend. We see the results from hindsight--after the storm has passed. Thus, there is no such thing as an "immediate crash" but we could see periods of sharp decline resembling the Great Crash of 1989-96.

The triggers are many: higher IR, affordability, employment downturn, negative sentiment, loss of investors in BTL due to poor returns on high capital outlay, debt levels, rates of insolvency. All of these ingredients are present in the UK and they are combining into a witches brew that is slowly poisoning the HPI-MEW culture that Gordon "Miracle Economy" Brown has been trying to keep alive. The problem for Gordon is that the hot air he has been filling the HPI baloon with, cheap credit, is vanishing as the EU Commissioner has observed.

The EU Commissioner was merely pointing out the obvious, that IR are rising and this does not bode well for those who have bought into economic miracles. IF the ECB hike the rates in June there is little time left for the indebted to find a save haven.

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The HPC is an ongoing trend. We see the results from hindsight--after the storm has passed. Thus, there is no such thing as an "immediate crash" but we could see periods of sharp decline resembling the Great Crash of 1989-96.

The triggers are many: higher IR, affordability, employment downturn, negative sentiment, loss of investors in BTL due to poor returns on high capital outlay, debt levels, rates of insolvency. All of these ingredients are present in the UK and they are combining into a witches brew that is slowly poisoning the HPI-MEW culture that Gordon "Miracle Economy" Brown has been trying to keep alive. The problem for Gordon is that the hot air he has been filling the HPI baloon with, cheap credit, is vanishing as the EU Commissioner has observed.

The EU Commissioner was merely pointing out the obvious, that IR are rising and this does not bode well for those who have bought into economic miracles. IF the ECB hike the rates in June there is little time left for the indebted to find a save haven.

But you spoke about economic stresses within weeks, although I've been reminded that 15 years could actually still be expressed as weeks, so would still be valid!. I assume you meant stresses to the economy, not just social problems to individuals.

What exactly did you mean, and when will it happen? How many weeks, 3 or 520?

Edited by Casual Observer

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But you spoke about economic stresses within weeks, although I've been reminded that 15 years could actually still be expressed as weeks, so would still be valid!. I assume you meant stresses to the economy, not just social problems to individuals.

What exactly did you mean, and when will it happen? How many weeks, 3 or 520?

There really isn't any "it" but an ongoing trend. If the ECB bump rates by .50% we can expect some immediate fallout among those who are heavily indebted. Perhaps a rush for the exits for those who own property with heavy mortgages. The June meeting of the ECB is "weeks" away (perhaps days?) and markets will react immediately with banks responding with higher rates within hours. IMO, the worldwide trend toward tightening is already working its way through the HPI countries such as the US and OZ with only marginal falls in the UK. The pace will probably quicken this summer given the lack of a spring bounce (Mortgage lending soft) and high levels of unsold property on the books.

The herd mentality may well manifest itself this summer in a rush for the exits. Much depends on how serious the ECB are about raising the rates. Japan seems bent on that course so it may all be academic as the creditors call the shots not the debtors. The next two to three months will reveal much (4-12 weeks).

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You're only screwing yourself, believing that this particular item of news is going to cause any "stresses in the economy to hatch out".

:o Oooh dear…..easy tiger. You’re a bit touchy aren’t you ? Bad hair day or something ? Perhaps you should stay a Casual Observer if you get so upset so quickly. Just because you read some news that you don’t like there’s no need to throw your rattle out of the pram.

It wouldn’t be so bad but I was sticking up for you earlier on by telling them to ease up on you a bit. Perhaps all the things I have heard about you are true after all and you probably deserve to be ridiculed. I just felt sorry for you at first but if you want to take on the world then feel free, I am sure there are many on this forum who will be only too pleased to put you straight. They seem to be doing a good job of it so far. :lol:

Oh well, back to the hair dryer. :)

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:o Oooh dear…..easy tiger. You’re a bit touchy aren’t you ? Bad hair day or something ? Perhaps you should stay a Casual Observer if you get so upset so quickly. Just because you read some news that you don’t like there’s no need to throw your rattle out of the pram.

It wouldn’t be so bad but I was sticking up for you earlier on by telling them to ease up on you a bit. Perhaps all the things I have heard about you are true after all and you probably deserve to be ridiculed. I just felt sorry for you at first but if you want to take on the world then feel free, I am sure there are many on this forum who will be only too pleased to put you straight. They seem to be doing a good job of it so far. :lol:

Oh well, back to the hair dryer. :)

Ah, the classic insult approach of someone with nothing constructive to say...

Ridicule? Someone says somethings going to happen within a matter of weeks, and when I ask how many, I'm reminded that weeks could technically be a matter of years!! How ridiculous is that?

There really isn't any "it" but an ongoing trend. If the ECB bump rates by .50% we can expect some immediate fallout among those who are heavily indebted. Perhaps a rush for the exits for those who own property with heavy mortgages. The June meeting of the ECB is "weeks" away (perhaps days?) and markets will react immediately with banks responding with higher rates within hours. IMO, the worldwide trend toward tightening is already working its way through the HPI countries such as the US and OZ with only marginal falls in the UK. The pace will probably quicken this summer given the lack of a spring bounce (Mortgage lending soft) and high levels of unsold property on the books.

The herd mentality may well manifest itself this summer in a rush for the exits. Much depends on how serious the ECB are about raising the rates. Japan seems bent on that course so it may all be academic as the creditors call the shots not the debtors. The next two to three months will reveal much (4-12 weeks).

Nice cop-out, RB.

By the way, the world is definitely going to end within weeks! (Don't worry- it could be several millennia, and I'll still be right)

Edited by Casual Observer

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The Euro Zone will now reap the true market 'rewards' of the one size (IR) fits all.

The boom in property prices in places like Spain & Ireland was to a great extent caused by Germany needing low rates to 'help'

their economy. That and post 9/11 reflationary reductions.

Euro Zone IR's at 3% by year end. I think so (thats a 20% increase), with more to come in 07.

A message for all the amatuer, naive and 'fake it till you make it Kevin and Tracey 'buy to letters', from an old un-reconstructed free marketeer.

YOU CAN'T BUCK THE MARKET!

It looks like we're all about to receive a big bill for what we though was a free lunch. Have you been dining on Lobster

or linguine? Oh and they've just change their policy, its cash only!

Pablo Silver or Lead?

Edited by Pablo-silver or lead?

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It looks like we're all about to receive a big bill for what we though was a free lunch. Have you been dining on Lobster

or linguine? Oh and they've just change their policy, its cash only!

Pablo Silver or Lead?

The sooner this happens the better.

I was speaking to a South African property developer a few months back.

An Irish developer had moved to Cape Town and was rapidly developing and buying everything he could find (and believe me, Cape Town is in a massive housing bubble).

This SA chappie was completely impressed, hearing about how high prices were in Dublin, he got on to telling me how sucessful the Irish developer had been, and that property prices in South Africa would continue going up.According to him, houses in SA were still cheap.

Ignore of course the rubbish wages, volatile currency, high interest rates, highest incidence of AIDS in the world, 35% unemployment, power failures, crime levels that make Columbia look like a safe destination, corrupt politicians, the list goes on.

Of course none of that matters, because they have trendy "European" style coffee shops.

You too can pay European prices for a Latte in Africa.

The sooner this cheap money gets taken away from these junkies the better.

The Irish property market is completely stuffed, and I've heard Irish developers are now moving into Germany.

They're addicts, and their choice of drug is cheap money.

The sooner they're stopped the better for everyone.

Edited by BandWagon

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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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