dude wheres my house Posted August 10, 2007 Share Posted August 10, 2007 http://www.bloomberg.com/apps/news?pid=206...&refer=home Quote Link to comment Share on other sites More sharing options...
Fancypants Posted August 10, 2007 Share Posted August 10, 2007 http://www.bloomberg.com/apps/news?pid=206...&refer=home Cobblers. Wait until all that funny money starts to bleed into even the fiddled inflation indices. Blame it on flooding, foot & mouth, whatever, but inflation is inflation is inflation Quote Link to comment Share on other sites More sharing options...
snap_crackle_and_pop Posted August 10, 2007 Share Posted August 10, 2007 http://www.bloomberg.com/apps/news?pid=206...&refer=home why raise rates in a recession? Quote Link to comment Share on other sites More sharing options...
Come On Down Posted August 10, 2007 Share Posted August 10, 2007 http://www.bloomberg.com/apps/news?pid=206...&refer=home Not according to Mervyn. Quote yesterday he said that the central banks are not to blame for investors being too risky. So why then are some central banks pumping money in to the markets? Where does that money come from? And what are the reprocussions of the stock market crash? So many questions!! Quote Link to comment Share on other sites More sharing options...
Fancypants Posted August 10, 2007 Share Posted August 10, 2007 why raise rates in a recession? what does one do during stagflation? What a dreadful dilemma. Quote Link to comment Share on other sites More sharing options...
BrownField Posted August 10, 2007 Share Posted August 10, 2007 http://www.bloomberg.com/apps/news?pid=206...&refer=home You miss the point, they won't raise rates because there will be enough downward pressure without it! In terms of economic unravellings you are witnessing a big one my friend. Did you hear the numptie Julia Caesar (herself a numptie) was interviewing on News 24 yesterday about it. When asked if the UK had a subprime problem both of her longwinded "no's" were prefixed with "hopefully"! Quote Link to comment Share on other sites More sharing options...
Rover Posted August 10, 2007 Share Posted August 10, 2007 Tried to start a thread in a similar vein: I've STR, perhaps too early but I had other motivations. As I understand it this credit drought and associated Western World market fall, will ultimately make further IR rises unlikely as the the central banks try to apply CPR to ailing economies - is this correct ? Effectively as the **** falls out of the financial markets - they will try and reinvigorate with IR cuts ? Informed people tell me 6.25% BoE base will be the max and it is forecast to drop thereafter ? With this in mind, how will this adversely effect HPI ? Discuss please as I'm bloody clueless Quote Link to comment Share on other sites More sharing options...
South Lorne Posted August 10, 2007 Share Posted August 10, 2007 why raise rates in a recession? to prevent an even bigger recession further down the line....but if you are in this Government you only plan for the next 24 hours...and politically a wink and nod with the Bof E may do the trick....but even that may not be enough to stave off this one........only Robert Redford and Paul Newman could maybe help this 'Sting'..... Quote Link to comment Share on other sites More sharing options...
Come On Down Posted August 10, 2007 Share Posted August 10, 2007 (edited) You miss the point, they won't raise rates because there will be enough downward pressure without it! In terms of economic unravellings you are witnessing a big one my friend. How? I dont think its going to stop people spending their hard earned cash? Edited August 10, 2007 by Come On Down Quote Link to comment Share on other sites More sharing options...
BrownField Posted August 10, 2007 Share Posted August 10, 2007 How? I dont think its going to stop people spending their hard earned cash? Err because; A: A lot more of them will shortly be becoming unemployed B: A lot of that "hard earned cash" being spent over the last 7 years was actually "very easily borrowed cash" which is about to evaporate C: Sentiment always turns when times turn hard Quote Link to comment Share on other sites More sharing options...
buylowsellhigh! Posted August 10, 2007 Share Posted August 10, 2007 The article says there's a 88% chance of a further rate rise by BoE. When you say less likely, how less likely do you mean? Quote Link to comment Share on other sites More sharing options...
Realistbear Posted August 10, 2007 Share Posted August 10, 2007 Merv and the muppets are irrelevant now. They lost control back in August '05 when they decided to keep HPI rolling instead of allowing the market to collapse gently. Now its going to collapse violently. The credit markets call the shots from now on and the miracle days of cheap and easy money to buy inflated houses is over. Merv can cut 1% and it will not stop the crash. Without easy money no one ain't going to be buying nuthin. Quote Link to comment Share on other sites More sharing options...
lulu Posted August 10, 2007 Share Posted August 10, 2007 Err because;A: A lot more of them will shortly be becoming unemployed B: A lot of that "hard earned cash" being spent over the last 7 years was actually "very easily borrowed cash" which is about to evaporate C: Sentiment always turns when times turn hard How bad would it have to get for banks to call in some of their loans (I am sure I read once that they can do this) and if the loan is secured to the property could lead to forced sales - but I could have miss interpreted this. Quote Link to comment Share on other sites More sharing options...
right_freds_dead Posted August 10, 2007 Share Posted August 10, 2007 they have to choose between TWO evils. either lower interest rates = higher inflation. keep inflation low = higher interest rates. they cant have both !!! Quote Link to comment Share on other sites More sharing options...
AteMoose Posted August 10, 2007 Share Posted August 10, 2007 (edited) they have to choose between TWO evils.either lower interest rates = higher inflation. keep inflation low = higher interest rates. they cant have both !!! I think they will err on the side of the first option, BOE recently commented that CPI inflation was actually lower (because of 2 for 1 offers), in a back to frount way we know CPI is higher but if you say its lower that means you can allow it to get a little more out of control by keeping Irs as is or lowering them Edited August 10, 2007 by moosetea Quote Link to comment Share on other sites More sharing options...
right_freds_dead Posted August 11, 2007 Share Posted August 11, 2007 but they have flogged option 1 to death already and we have creeping inflation that has to be now lied about. we all know the price of plums is rising above wages. i cant think of much that isnt. therefore i think we shall see a lot more of option 2 for a while. then back to option 1 within 5-10 years. depending on how it went.. Quote Link to comment Share on other sites More sharing options...
South Lorne Posted August 11, 2007 Share Posted August 11, 2007 I think they will err on the side of the first option, BOE recently commented that CPI inflation was actually lower (because of 2 for 1 offers), in a back to frount way we know CPI is higher but if you say its lower that means you can allow it to get a little more out of control by keeping Irs as is or lowering them ....'2 for 1 offers' ....they have been going for years ....!...have the Bof E only started going to Tesco's and Sainsbury's......they obviously think we are all simple while they clutch at straws....!... Quote Link to comment Share on other sites More sharing options...
Si1 Posted August 11, 2007 Share Posted August 11, 2007 why raise rates in a recession? to maintain a stable currency so we can still trade internationally. economic policy cannot save this thing Quote Link to comment Share on other sites More sharing options...
Pindar Posted August 11, 2007 Share Posted August 11, 2007 (edited) The central bankers are now running the printing presses full time to try and keep the titanic afloat. Wasn't this sort of crazy injection of liquidity into a leaking bucket the reason that Thatcher introduced strict monetarist policies in the UK in 1979? It seems that the socialist superstate, presided over by the ECB is just replicating the disasterous socialist policies that almost destroyed Britain in the 1970's but this time on a continent-wide scale. Edited August 11, 2007 by BarrelShifter Quote Link to comment Share on other sites More sharing options...
crash2006 Posted August 11, 2007 Share Posted August 11, 2007 look at this it tries to explain things: http://www.housepricecrash.co.uk/forum/ind...showtopic=53022 Quote Link to comment Share on other sites More sharing options...
patprimer74 Posted August 11, 2007 Share Posted August 11, 2007 The article says there's a 88% chance of a further rate rise by BoE. When you say less likely, how less likely do you mean? Exactly! The article says " ... In the U.K., traders see an 88 percent chance of another rate increase this year ... "! Eighty eight percent is certainly less than one hundred percent but not by much. In other words, the 'experts' think there's about a nine in ten chance of a rise this year and a one in ten chance of no rise. Big deal! Now, if I were a betting person, which would I go for? p Quote Link to comment Share on other sites More sharing options...
nohpc Posted August 11, 2007 Share Posted August 11, 2007 Exactly! The article says " ... In the U.K., traders see an 88 percent chance of another rate increase this year ... "! Eighty eight percent is certainly less than one hundred percent but not by much. In other words, the 'experts' think there's about a nine in ten chance of a rise this year and a one in ten chance of no rise. Big deal! Now, if I were a betting person, which would I go for? p If you are indeed a gambler why not take long shot punt on a rate cut. If there is a huge global economic meltdown and credit crunch then having a small hedge bet on a cut might not be a bad idea. Quote Link to comment Share on other sites More sharing options...
Guest vicmac64 Posted August 11, 2007 Share Posted August 11, 2007 Tried to start a thread in a similar vein:I've STR, perhaps too early but I had other motivations. As I understand it this credit drought and associated Western World market fall, will ultimately make further IR rises unlikely as the the central banks try to apply CPR to ailing economies - is this correct ? Effectively as the **** falls out of the financial markets - they will try and reinvigorate with IR cuts ? Informed people tell me 6.25% BoE base will be the max and it is forecast to drop thereafter ? With this in mind, how will this adversely effect HPI ? Discuss please as I'm bloody clueless Don't worry - hpi is dead, the next hammer blow to really get the HPC going will be companies offloading jobs. That is the next step in todays unwind scenario. Hence recession / depression is already here we just haven't seen its effects yet. As companies ditch jobs in an effort to stay afloat so the pressure exends to the housing market - hence the housing market has a long way to fall - my guess is you will see within the next 3 years houses having fallen by min of 30 - 40% Quote Link to comment Share on other sites More sharing options...
gravity always wins Posted August 11, 2007 Share Posted August 11, 2007 Do falling base rates matter that much in this situation to the bloke on the street? If the banks are in such trouble wil they not increase the spread in rates between the funny money they can borrow and the money they lend us (if they are willing to lend). Won't banks push up borrowing rates to increase thier margins and make a profit? Scuse my ignorance but is this not what has been happening in Japan? although the base rate there is low the ordinary punter wanting a mortgage had to pay a lot more. Quote Link to comment Share on other sites More sharing options...
insidetrack Posted August 11, 2007 Share Posted August 11, 2007 Do falling base rates matter that much in this situation to the bloke on the street?If the banks are in such trouble wil they not increase the spread in rates between the funny money they can borrow and the money they lend us (if they are willing to lend). Won't banks push up borrowing rates to increase thier margins and make a profit? Scuse my ignorance but is this not what has been happening in Japan? although the base rate there is low the ordinary punter wanting a mortgage had to pay a lot more. I think you are exactly right. The banks will be charging a larger margin above base rate in the future and will want a large deposit from new borrowers. In a riskier housing market with falling prices, the borrowers will be expected to pay more and shoulder most of the risk. Quote Link to comment Share on other sites More sharing options...
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