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Realistbear

C M L Optimistic About H P I For 2008

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http://www.telegraph.co.uk/money/main.jhtm.../cnrates117.xml

House prices slow but rate rise still likely
By Josephine Fungus-Moulds
Last Updated: 1:46am BST 17/07/2007
House price growth is slowing but economists warn that it is not enough to stop the Bank of England raising rates.
The Council of Mortgage Lenders director general, Michael Coogan, said house prices look set to rise by just 2pc-3pc next year - their weakest rate of growth since 1995 when prices fell - as higher interest rates appear to bite..../
Mr Coogan warned that the 2m Britons due to come off cheap fixed-rate mortgages in the coming months would have to dramatically cut spending to keep up their monthly repayments.
:o

1995 was the year of recovery from Great Crash 1. Thus the CML make no sense. We have to have a crash before recovery mode which is usually in the 2-3% range. :blink:

What most VIs fail to understand is market dynamics. All bubbles, not some bubbles, are formed by price momentum. Price momentum is self sustaining until something gives, such as loss of fuel (credit). Once momentum is lost the apparatas that allowed the self-sustaining forces to keep momentum going forward collapses back on itslef and the machinery crashes. This is why cycles exist and why booms are always (not cometimes) followed by busts.

The Russians understood this principle and applied it to the fight to save Stalingrad. Russian troops were forced to keep moving forward into the German machine guns (or face "friendly fire" from equally destructive machine guns) as any slowdown in the momentum of troops moving forward would give the Germans the advantage despite their smaller numbers. The lesson of momentum is that you cannot afford a stall as such will collapse the entire mechanism.

Brown cannot allow a stall. This is what was behind the day of infamy when the muppets dropped IR in August of '05. David "Mr. Realestate" Lereah of the US Realtors Assn suggested that the US housing market would "stall" or have a soft landing. He failed to grasp the principles of market dynamics and momentum.

Brown's miracle is at present losing momentum.

Edited by Realistbear

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