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Falling Stock Markets To Stop Mpc From Hiking Irs - Hpi Continues

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ok stock markets falling is one thing - but this will only cause the mpc to dither on rate hikes (as borne out on betfair odds for aug hike now 14/1 from 8/1) therefore prolonginging hpi -

please debunk this statement with relevant arguments

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ok stock markets falling is one thing - but this will only cause the mpc to dither on rate hikes (as borne out on betfair odds for aug hike now 14/1 from 8/1) therefore prolonginging hpi -

please debunk this statement with relevant arguments

- the MPC doesn't target asset values.

- the cause of the recent falls is the fear of a credit crunch (which now seems inevitable), this will prove as fatal to HPI as stock market inflation.

- that said, back to back increases were always unlikely, this may be interpreted as dithering by some.

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Guest Charlie The Tramp
Not sure that we need another one, I think the tide has turned and the sheeple are going to get wind very soon thus causing colapse.

Global inflation is on the way up and so are Interest Rates, the MPC have no options but to follow Global rising rates.

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ok stock markets falling is one thing - but this will only cause the mpc to dither on rate hikes (as borne out on betfair odds for aug hike now 14/1 from 8/1) therefore prolonginging hpi -

please debunk this statement with relevant arguments

HPI is already dead, there are no viable BTL in London/SE as the yields no longer cover an IO mortgage.

the only way to save house prices would be to cut the base rate to 5%, if you want HPI you would need to cut to at most 4.5% (or enter the euro with its 4% base rate <_< )

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Global inflation is on the way up and so are Interest Rates, the MPC have no options but to follow Global rising rates.

that is not true, there is nothing stopping them from cutting rates.

if they dropped rates to 5% in the next meeting (down 0.75%) sterling would tank, inflation increase

but is that such a bad option that Gordon would forbid it, or is it a better option to cut than to tank the housing market and loose all those votes

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If they don't hike and the US do, then watch the pound fall and inflation go up.

so what?

why is inflation such a taboo in a country whose population has over £1.4tril in debt, mostly on mortgages??

a cut is not impossible, be that via the BOE cutting, or us joining the euro with its 4% base rate.

edit:

To the OP, they would not have raised this month anyway!

Edited by cells

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Guest Charlie The Tramp
that is not true, there is nothing stopping them from cutting rates.

if they dropped rates to 5% in the next meeting (down 0.75%) sterling would tank, inflation increase

but is that such a bad option that Gordon would forbid it, or is it a better option to cut than to tank the housing market and loose all those votes

Then I would say let them try it, they would indeed become a laughing stock with the Global CBs, the IMF, and the World Bank for what it`s worth.

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so what?

why is inflation such a taboo in a country whose population has over £1.4tril in debt, mostly on mortgages??

a cut is not impossible, be that via the BOE cutting, or us joining the euro with its 4% base rate.

edit:

To the OP, they would not have raised this month anyway!

Are you having a laugh? Not sure if you are or not?

A cut is not impossible, but highly unlikely and absurd if they did!

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Then I would say let them try it, they would indeed become a laughing stock with the Global CBs, the IMF, and the World Bank for what it`s worth.

who cares about them? gordon needs your vote and the vote of 2 million home owners with mortgages about to go through the roof when they reset something in the next 12 months!

also a cut would have many benefits. the only negative one i hear is that inflation will soar. well that would surely be offset by a cheaper mortgage :lol:

don’t get me wrong, i want a nominal HPC so i can rub it into the faces of some fools i know. but the government still has the easy choice of cutting and giving the hosing market its soft landing. They could even do this by joining the euro with its 4% base rate

Are you having a laugh? Not sure if you are or not?

A cut is not impossible, but highly unlikely and absurd if they did!

i am serious

why would a cut be bad for the nation? the only negative would be inflation, but that would be offset by cheaper mortgages and a bit of inflation would be a godsend to a nation with £1.4T internal debt

Edited by cells

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Well the Fed has been sitting on its hands for months over interest rates and that has not stopped a HPC in the USA. If we really are in for a Global Credit Crunch then the UK housing market will be toast whatever the BOE does since a world wide economic slump will just tip millions onto the dole. The unemployed can not afford to buy houses no matter how low Merv sets IR. We are a borrower nation that is not self sufficient in natural resources and that runs a huge trade deficit. This makes it much harder for us to inflate away our liabilities than say the Americans who despite Bush's attempts to screw their economy royally still have huge domestic resources to fall back on when times get hard.

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they can't ignore inflation or international competitiveness etc goes down the swanny - and we are in a globalised economy whether we like it or not.

Thus if they engineered the soft landing then worse, bigger problems would be the result in other parts of the economy, and the govt would get even bigger comeuppance. More importantly it would even more right royally screw the country in the medium to long term, the recovery might be even further off then. If an answer DOES exist it is in a fine balancing act, I'm not sure it isn't too late for that now, mainly because rates were dropped too low in the first place.

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who cares about them? gordon needs your vote and the vote of 2 million home owners with mortgages about to go through the roof when they reset something in the next 12 months!

also a cut would have many benefits. the only negative one i hear is that inflation will soar. well that would surely be offset by a cheaper mortgage :lol:

don’t get me wrong, i want a nominal HPC so i can rub it into the faces of some fools i know. but the government still has the easy choice of cutting and giving the hosing market its soft landing. They could even do this by joining the euro with its 4% base rate

i am serious

why would a cut be bad for the nation? the only negative would be inflation, but that would be offset by cheaper mortgages and a bit of inflation would be a godsend to a nation with £1.4T internal debt

the answer is already there.

cutting rates will just add more fuel to the fire, instead of £1.4T it will be £2T and then £3T and so on.

Rates are going up and will not be coming down for a long time.

Edited by debtfree

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who cares about them? gordon needs your vote and the vote of 2 million home owners with mortgages about to go through the roof when they reset something in the next 12 months!

also a cut would have many benefits. the only negative one i hear is that inflation will soar. well that would surely be offset by a cheaper mortgage :lol:

don’t get me wrong, i want a nominal HPC so i can rub it into the faces of some fools i know. but the government still has the easy choice of cutting and giving the hosing market its soft landing. They could even do this by joining the euro with its 4% base rate

i am serious

why would a cut be bad for the nation? the only negative would be inflation, but that would be offset by cheaper mortgages and a bit of inflation would be a godsend to a nation with £1.4T internal debt

What about the savers? I would love interest rates to go up further! There are winners and losers in every scenario.

As for Gordon Brown, I expect there will be a general election in the autumn as not only is he ahead of DC at the moment, but he has already indicated that IRs are expected to rise further over the next year.

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ok stock markets falling is one thing - but this will only cause the mpc to dither on rate hikes (as borne out on betfair odds for aug hike now 14/1 from 8/1) therefore prolonginging hpi -

please debunk this statement with relevant arguments

I expressed this view on the last poll. Tuffers did also. <_<

If (if) we are seeing the long awaited reaction to the bloated housing markets (plural) there is going to be a great deal of fallout in the SMs worldwide as both the UK and US economies are driven by house related purchases. People are going to feel poorer because the value of their house is dropping while the reality of debt dawns.

I doubt Merv will hike next time and that may be why the pound is starting to backtrack a little. Sentiment is going down hill rapidly and we may be in a global bear trend from now until Great Crash 2 hits bottom.

ST US Treasuries are soaring and the flight to safety is on.

If I was a gambler I would place a bet on Betfair for a hold next time. The miracle economy has met its nemesis: Mr. credit crunch.

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Well the Fed has been sitting on its hands for months over interest rates and that has not stopped a HPC in the USA. If we really are in for a Global Credit Crunch then the UK housing market will be toast whatever the BOE does since a world wide economic slump will just tip millions onto the dole. The unemployed can not afford to buy houses no matter how low Merv sets IR. We are a borrower nation that is not self sufficient in natural resources and that runs a huge trade deficit. This makes it much harder for us to inflate away our liabilities than say the Americans who despite Bush's attempts to screw their economy royally still have huge domestic resources to fall back on when times get hard.

Right. A HPC will bring on a global recession, unemployment and huge drop in demand for goods. IR were never that relevant in any event as miracle economies rely on availability of cheap credit. Now that cheap credit has gone IR can do what they like as the sheeple can no longer get hold of irresponsible amounts of cash at any price. It was irresponsible levels of cash that created the miracle for Gordon in the first place. That and a huge recruitment drive for government jobs to bolster employment. Problem for Gordon is that those jobs didn't improve our competetive edge in the global economy. Our manufacturing simply shrank from 20% of GDP down to 12% today. Sterling took care of the rest as we became priced out of the global economy.

Gordon had better call a GE quick.

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that is not true, there is nothing stopping them from cutting rates.

if they dropped rates to 5% in the next meeting (down 0.75%) sterling would tank, inflation increase

but is that such a bad option that Gordon would forbid it

Yep, inflation would jump to 10% and we'd have a real balance of payments crisis and a run on sterling like never before. We'd have another black Tuesday with IRs having to be raised by percentage points at a time to save sterling.

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that is not true, there is nothing stopping them from cutting rates.

is that a joke?

the makets fall, money goes into the bond market, rates fall (US&UK)ect, the yen rises....then people need to take money out of the market to pay back borrowed yen - this causes makets to fall, money goes into the bond market, rates fall (US&UK)ect, the yen rises....

are you really suggesting that the BOE/FED put petrol on the fire?

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that is not true, there is nothing stopping them from cutting rates.

if they dropped rates to 5% in the next meeting (down 0.75%) sterling would tank, inflation increase

but is that such a bad option that Gordon would forbid it, or is it a better option to cut than to tank the housing market and loose all those votes

Yield curve was extremely inverted last time I looked.

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