Friday, Dec 01, 2006

King warning on asset prices

The times: Boom at risk from rapid end to cheap money, Bank warns

If they were to adjust quickly then you might see quite sharp movements in asset prices overall and that would have some impact on the world economy.

Posted by holding out @ 09:16 AM (424 views)
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1. waitingfor hpc said...

call me stupid but if all these prices keep going up in a 'boom'. Surely this should be represented in the inflation figures? ANd therefore the bank could have acted to make sure they did not go too high?

Friday, December 1, 2006 09:28AM Report Comment

2. tyrellcorporation said...

'there was now exaggerated buoyancy in the property market, Nigel Jenkinson, the Banks director in charge of financial stability, said in a hard-hitting speech.'

You couldn't write this stuff!

Friday, December 1, 2006 10:20AM Report Comment

3. Disciple said...

Please remember that a bear market is like the previous Bull. So a solid, longer than expected Bull, that seems to defy logic can only mean a super Bear market at some point. So thiis market may go on for some time just like the "Roaring" 1920's.

Friday, December 1, 2006 10:56AM Report Comment

4. denzil said...

>>if an unusual run of very low long-term interest rates should come to an end, the Bank of Englands Governor told MPs yesterday.

"If an "unusual" run of low long-term interest rates comes to an end", there could be trouble says BoE Governor.

Now to my way of thinking and sometimes odd logic "unusual" implies "not usually" which literally can be interpreted as "low interest rates are rare and will eventually come to an end because they are uncommon. When that day occurs and it is highly likely it will because it is "unusual" then it will be interesting to see the subsequent fallout.

Friday, December 1, 2006 12:03PM Report Comment

5. geed said...

How much are we paying Merv? 130K (probably more as he is the Guv) and that is all he has got to say?

In his speech he has admitted that there is a bubble in the stock market, bonds and the house market. He then says "please be careful, its awfully likely that there could be an economic crash if we put up interest rates up (which we appear to be doing)". How many more lame speeches is he going to come up with?

Its like a policeman watching a drunk take his car keys out, the policeman warns the drunk "dont do it mate or you'll crash your car". The drunk taunts the policeman (takes out even more debt) and puts the keys in the door of the car. Policeman; "please dont do it sir or you'll crash your car". Drunk get into car and starts the engine smiling (as he takes out more debt) at the policeman. Policeman; "I know I have the power to stop this mess but I am hoping that if I ask nicely you will turn the engine off, get out the car and sober up"......But the drunk wont, he/she is intoxicated much in the same way the general buying public are intoxicated with cheap borrowed money and consumerism. It wont stop unless the cuffs are used and he /she are locked up.

Both Merv and the Policeman and men of many words and little action. What a mess.

Friday, December 1, 2006 12:10PM Report Comment

6. paul said...

I agree waitingforhpc, the bank should have acted much earlier on rapidly rising houe price inflation.

I reckon that in years to come, this will be remembered as a grave error on the part of the Governor and the MPC. It wouldn't actually surprise me if in a few years when the dust has settled after the market has bottomed out, there isn't a parliamentary investigation into why exactly the bank didn't act upon news of rapidly rising HPI. In reality of course I think that Merv and the MPC probably had their snouts too far in the trough themselves, celebrating their own new found wealth to notice the trouble lying ahead for the economy.

He's now trying to manipulate the market by sounding bearish, but of course it has no effect on the speculation driven housing market his rate setters have created. The only way he can possibly bring back any sanity to the market is by raising rates further to crash the market - moving the brick by pulling harder on the elastic band.

Friday, December 1, 2006 12:15PM Report Comment

7. geed said...

A good point denzil and probably a clear sign of what is to come for the BoE. Question is what do the BoE consider "usual", and when are they going to return to "usual" IR policy because, quite frankly, I have enough of this "unusual" period!

Friday, December 1, 2006 12:15PM Report Comment

8. george monsoon said...

This is fantastic!

I really can't help feeling smug. It will be really satisfying and probably a bit selfish I know to feel so warm inside, when I see all the people who have been gloating over my predicament, start to feel the kind of pain that I feel when I cannot afford my own home. They really do deserve the most severe punishment because of their borrowing, not out of necessity, but rather greed and stupidity.

What I am about to say will upset some of you, but I have suffered for nearly 5 years, working towards owning a home and I have 0 debt, because I know that you only borrow when you have no other choice. (Wise words from my Dad, thanks)

Can't wait to see all the Mercs, BMW's, and Chelsea tractors with "for sale" signs on the dashboard.
I can't wait to offer someone half the asking price for a house, and watch them have to give it serious thought.
I Can't wait to see estate agents queueing at the dole office.
I really can't wait to see the stock market crash. I don't have any money to loose, so it won't affect me.
I can't wait to see the history books show this "so called" ficticious bubble turn out to be the biggest con ever devised by a single government.

And I feel all this hatred and resentment, because I have been excluded from securing a home for my family. A home that will not bought for profit, but somewhere that I can develop over the years into my ideal living space. My home. All this madness is due to GREEDY Arrogant lying sub-humans who thrive on gloating at those who aren't "in it for the money"

I hope they all rot in hell.

Friday, December 1, 2006 01:21PM Report Comment

9. paul said...

Yes george our feelings are with you - though don't depend on it happening soon.

You're not going to like Swerving Mervyn's latest comments on 5x and 6x lending multiples ...

Friday, December 1, 2006 01:32PM Report Comment

10. sold 2 rent 1 said...


Everyone gets hurt in a recession and high unemployment - renters and homeowners alike

Be careful what you wish for.
You might be the one out of a job.

As for the stock market crashing - that could be your pension down the tube

Keep it togther man - it is early days - we are only at the equivalent of late 1987 early 1988.
There is at least 3/4 years before you can buy

Friday, December 1, 2006 02:27PM Report Comment

11. denzil said...

George are you still off the fags?

Friday, December 1, 2006 03:35PM Report Comment

12. george monsoon said...

Paul, thanks its good to know I am not alone

Sold 2 Rent - What pension? on my wages? and I may actually be better off if I go on the dole!

Denzil, yes I am on the gum

Friday, December 1, 2006 03:40PM Report Comment

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