Boe Decision Livid

[bearbullfence]

Well, actually most people here want to see recent buyers punished for their exuberance in borrowing huge amounts of cash. Nothing short of bankruptcy and destitution will suffice I'm afraid. Otherwise these people have been given free money and assets.

Not too sure I see how exactly people will have been given free money and assets. If by free, you mean debt will be inflated away over a ten year period with a significant preportion of someone's income going on the mortgage in the mean time, then I supose using that definition it would be "free".

But I do agree that many people on here are psycopaths that would like to see people bankrupt and destitute through some warped desire for some sort of HPC karma.

Bottom line is this site is supposed to promote the theory that there will be a house price crash. The front page uses real prices to show this, many bears claim "it isn't different this time". Therefore bears have been wanting a house price crash in real terms since day 1. They are getting just that. They should be very happy with the situation.

Edit to say - STF - what happeded to your cool avatar of the guy with blood on his hands? I always thought that lended a scary almost psycotic edge to your posts. Almost like, damn better not argue with this guy, his gonna rip your ear off with his teeth type of thing.

Edited August 2, 2007 by bearbullfence

[Guest d23]

I don't understand what you're saying here. Yes, 4.5% over 10 years is about 55%, but why does that mean a mortgage is halved, and what's the specific significance of a £200k mortgage?

halved relative to your wage presumably

[Guest Winnie]

Well, actually most people here want to see recent buyers punished for their exuberance in borrowing huge amounts of cash. Nothing short of bankruptcy and destitution will suffice I'm afraid. Otherwise these people have been given free money and assets.

I am a bit worried about your switch. It feels less like a genuine repositioning and more like an attention seeking stunt...either way, you are going on ignore because it is getting tedious.

[Te Mata]

I am a bit worried about your switch. It feels less like a genuine repositioning and more like an attention seeking stunt...either way, you are going on ignore because it is getting tedious.

I've already done it, but I just wish people would stop quoting him.

[Ologhai Jones]

halved relative to your wage presumably

Surely, it would take a wage-rise of 100%, to halve the real value of an outstanding debt, wouldn't it?

[Mr_Nice]

0.5% rise! theres more chance of me winning the jackpot on the Lotto and Euromillions in the same week.

thats 1036000000000000 to 1. Or put another way the amount leant on credit cards each day.

[winkie]

The longer they wait to increase it the higher the impact will be.

[Ash4781]

Relax, I don't think central banks have as much control as they would like you to think they have.

Control is pretty much outside of the banking system and in the hands of hedge funds and the derivatives market.

Note how Citigroup has been trying to wriggle out of its committments to Terra Firma over the acquisition of EMI.This is a sure sign that credit is tightening, becoming costlier to get. This will eventually work through to the mortgage/housing market.

They keep saying it's contained!

[Guest vicmac64]

My guess is they will hike a quarter increase min next month - but is more likely to be a 1/2% increase - didn't expect it this month - the markets have been teetering lately and I guess no one wants to be the one to get the blame for the greatest crash of all - the crash of the deck of cards we call our currency..

[peahead]

No chance of .5% increases yet... MPC muppets won't want to rock the boat so soon.

I'm anticipating .25 in Sept or Oct (more likely Oct)...if CPI doesn't decrease before Christmas, and the sheeple keep maxing their plastic over Christmas, I wouldn't be surprised to see a .5% increase in Jan. By then they will have seen some of the impact of the end of the 2 year old fixes. Existing money in the system borrowed at lower rates will have dried up and the pot will need filling up again with new money borrowed at anything between 7 and 9%.

Belt up... we're in for a bumpy ride!!

[Selling up]

Surely, it would take a wage-rise of 100%, to halve the real value of an outstanding debt, wouldn't it?

You're right OJ, whoever said a 55% raise would halve the value of a debt hadn't thought through the maths. Easy mistake to make though and well done for spotting it.

[South Lorne]

They keep saying it's contained!

....yeah....but...Gordo's going for an election.....

[Jonnybegood]

Right decision today, They are starting to worry about the number coming off fixed rate deals over the coming months.

CML have released data indicating that the majority who fixed in 2005 at 4.5% fixed for 2 years so these come to an end this year.

When the year is out and things look no better rates will increase rapidly, maybe as high as 7% before falling back.

They have to wait to fully realise the impact of the spate of recent rises.

[OzzMosiz]

It's called inflating away the debt. It's standard central bank practice.

Inflating debts away by wage inflation will result in mass unemployment as businesses shift to lower cost countries.

[South Lorne]

Right decision today, They are starting to worry about the number coming off fixed rate deals over the coming months.

CML have released data indicating that the majority who fixed in 2005 at 4.5% fixed for 2 years so these come to an end this year.

When the year is out and things look no better rates will increase rapidly, maybe as high as 7% before falling back.

They have to wait to fully realise the impact of the spate of recent rises.

I posted the following 10 minutes ago on another thread:

"Quotes in the BBC article state:

A key factor in the delayed effect of the rate rises is that 1.3 million people took out fixed rate mortgages in 2005, according to the Council of Mortgage Lenders, most of which would have been two-year deals.

"A substantial number of homeowners will see their mortgage bills rise markedly during the second half of the year as the cheap fixed rates that they took out two years ago expire," said Howard Archer from Global Insight.

Why are they worried...the mortgage advisers and underwriters complying with the FSA regulations would have taken IR's into account when recommending and approving these discounted 'fixeds'..... laugh.gif laugh.gif are they saying they did not take a view on possible future rate rises .....why else would they fix.......???..... "

[lets get it right]

Who would care? The pound was 20% lower against the dollar not so long ago. It achieves the same ends as a HPC, but without the political fallout. The damage is hidden in currency transactions so the general public don't understand what has happened.

They do when imported goods are suddenly 20% more expensive than they used to be.

Interesting is it not - as you say the pound has moved up 20% against the dollar - imported goods priced in dollars have fallen in price - this should have reduced inflation - but inflation increased. If inflation increases when your currency is going up, it's going to go through the roof when your currency is going down.

Which is why interest rates have still only got one direction to go in.

[lets get it right]

Inflating debts away by wage inflation will result in mass unemployment as businesses shift to lower cost countries.

Absolutely. A few years ago this was hard work. Now it's a piece of piss. They're waiting with open arms in the Czech Republic - highly skilled and motivated workforce with costs 20% of the UK's.

The only reason we haven't had mass unemployment yet is the million extra people employed by the government.

[South Lorne]

Absolutely. A few years ago this was hard work. Now it's a piece of piss. They're waiting with open arms in the Czech Republic - highly skilled and motivated workforce with costs 20% of the UK's.

The only reason we haven't had mass unemployment yet is the million extra people employed by the government.

.....is this manipulation in the search for votes from a party that is only there because of the Scottish Labour MP's, a party now weakened in it's homeland....these guys are grasping every straw to stay in power and manipulating all South of the border.....

[A Fool & His Borrowed Money]

Wage inflation up

Manufacturing booming

Well over a year above cpi target

2nd qtr gdp above trend

money supply massive

housing indexes still near double digits

I could go on, what the f**k are those pricks up to?

They are only making a rod for their own backs, in 6-12 months it will be obvious to everyone that they dithered to long and rates should have gone up ages ago whoin their right mind would offer any of these muppets a job when they move on?

Sad thing is they will probably still get given some highly paid role that none of them deserve.

I give up :angry:

If they fail to contain inflation by hesitating on interest rates, it could set in a devaluation of the pound versus other countries currencies. namely the yen. A drop in value of pounds versus yen could leave alot of carry-traders high & dry. Gains may be wiped out by a drop in value of sterling, meaning the money supply would be fooked from lack of carry-traders....

Lack of money supply............

[HPC Convert]

You are all in la la land.

CPI 2.4% and will be between 2.1% and 2.3% within 2 months. Hardly a reason for them to go into a panic.

On the other hand you lot could all be CPI at 2% purists in which case for the 3 or so years where CPI was at below 2% you were all screaming for further rate cuts.

I suspect that there are happy enough to be a bit over the 2% target in a period of strong growth, just as they were happy in 2003/3004 to be a bit under the target in a period of weaker growth.

True. Met with US investment bank economists this morning re a transaction. Pretty switched on guys. After the main discussion we moved onto sub prime and credit squeeze and GDP growth etc. With expansion of the economy at current rates (above trend) they say CPI of 2.4 is acceptable on a downward trend. Re sub prime, they reckoned in 12 months everyone will have forgotten - it means Jack.

[HPC Convert]

Still, with the housing market crashing as badly as it is now.

(Note, CRASHING REFERES TO TRANSACTION VOLUMES)

Is a HOUSE PRICE CRASH a crash in volumes of sales now?

Oh well, like Gordon, if reality does not work out for you then just change the definition of the target.

[nohpc]

Wage inflation up

Manufacturing booming

Well over a year above cpi target

2nd qtr gdp above trend

money supply massive

housing indexes still near double digits

I could go on, what the f**k are those pricks up to?

They are only making a rod for their own backs, in 6-12 months it will be obvious to everyone that they dithered to long and rates should have gone up ages ago whoin their right mind would offer any of these muppets a job when they move on?

Sad thing is they will probably still get given some highly paid role that none of them deserve.

I give up :angry:

1) Wage inflation up - below real inflation across the board

2) Manfacturing booming - from reading this site I have been lead to believe britain does not manufacture anything

3) Well over CPI trend - yes

4) Housing indexes till near double digits - according to this site the crash has already starte

5) Money supply massive - but not rate of increase is dropping

I think they should have increased rates.

My point is that you can't say house prices booming so put rates up when you think prices are crashing and you can't praise the manufacturing sector for 1 day of the month (Rates day) and slag it all other times.

[misfit]

Wage inflation up

Manufacturing booming

Well over a year above cpi target

2nd qtr gdp above trend

money supply massive

housing indexes still near double digits

I could go on, what the f**k are those pricks up to?

They are only making a rod for their own backs, in 6-12 months it will be obvious to everyone that they dithered to long and rates should have gone up ages ago whoin their right mind would offer any of these muppets a job when they move on?

Sad thing is they will probably still get given some highly paid role that none of them deserve.

I give up :angry:

I don't disagree I wrote a brief report for my senior managers after meeting with my banks economists saying why there would not be a rate rise even though all the data said raise rates. I work in manufacturing and export a lot so interest rates have a significant impact on the business so we keep a very close eye on these and especially factory gate prices.

I think if Merv was on here he would say there is a lag between raising rates and the impact this has and one month is not enough to assess the impact.

I think this means a rate rise in September is inevitable even if the CPI is still at 2.4%/2.5% especially with house prices rising again after a short YOY fall to 9.9%. If this happens we will be at 6% which was the trigger many commentators state will lead people to assess their personal debt situation. This will be interesting especially given what HPC Convert says below. I guess we will have to see how this one plays out.

[Justice]

"Wage inflation up"

sorry i don't agree with that one as the immigrants are keeping a lid on wages as they are continuing to flood in.

even if oil on the worlds market stays the same you will all see petrol prices double at the pumps as Gov makes us all go ozone friendly and puts the tax up but because MP's like to fligh a lot you can bet airlines will still get cheap fuel.

if gov realy wants to do something then why do they not ensure we can by materials to insulate our home a lot cheper than we can now, polystyreen costs pea nuts untill you want a sheet of the stuff from B&Q

[misfit]

"Wage inflation up"

sorry i don't agree with that one as the immigrants are keeping a lid on wages as they are continuing to flood in.

even if oil on the worlds market stays the same you will all see petrol prices double at the pumps as Gov makes us all go ozone friendly and puts the tax up but because MP's like to fligh a lot you can bet airlines will still get cheap fuel.

if gov realy wants to do something then why do they not ensure we can by materials to insulate our home a lot cheper than we can now, polystyreen costs pea nuts untill you want a sheet of the stuff from B&Q

I think wage inflation is static at 3.5% but there is an underlying trend of increase, due to the increase in immigration, as can be seen in the manufacturing sector which was 3.9% in the previous quarter but is now up to 4%.

I'd say in 12 months time even your average Sun reader will know what sub prime is.

Don't know why, but I've never trusted economists to guess things right.

The chaps I spoke to are 85% certain of a rate rise in September so I have put in some currency cover. I have to say I am in agreement.