Sunday, January 6, 2008

House prices will rise, sterling will strengthen, all is fine in cookoo-land

Fear of falling governs outlook

"My prediction for house prices remains one of stagnation – broadly flat." "As for sterling, its fall in recent weeks has been the product of several factors. It was caught in the dollar-euro crossfire and hurt by the damage to the Bank and Treasury’s reputations as a result of Northern Rock, together with the government’s wider difficulties. The apparent willingness of the Bank to cut rates aggressively has contributed, as has the perception that Britain is heading for US-style economic and housing weakness. There are the twin deficits; poor public finances and a horrendous, £20 billion current-account deficit in the third quarter. But sterling is only a little below its average" What a spinmaster!! GBP lost 12% to the EUR since February!! "Dollar-euro cross fire"... what a bs!!

Posted by confused76 @ 10:33 AM (1737 views)
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15 thoughts on “House prices will rise, sterling will strengthen, all is fine in cookoo-land

  • this guy is strange, I emailed him a few weeks ago to ask him about the data he was using, he came back with abusive emails….. So I really think this guy needs a yellow coat that ties his arms up to stop self harm…lol

    Yellow you say!! Well we want to see him coming….lol

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  • I wouldn’t worry about David Smith – certainly no relation to Adam Smith. Anyone who finishes the article with a quizzie-poos on Spaghetti Westerns and questions that would make Anne Robinsons contestants look like Bamber Gascoigne tells it all.

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  • Just ignore him. He is an idiot.

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  • The best bit is the line: “I took some encouragement from the Bank’s survey. It showed that the sudden shift in the housing market is overwhelmingly a credit-crisis effect and mainly on the mortgage-supply side, rather than a sudden collapse of confidence among buyers.” Tell me David since as you say it’s “mortgage-suppy side” as if some sort of revalation noone thought of before, you must know the ability to buy is proportional to the amount of credit you can get (unless salaries soar – which they haven’t). So, er, if there are less people in the market, and those people have less cash, don’t you think that you’ll have to get the price it into the new “zone of possible agreement”? Don’t forget: Demand is the “desire, backed by the willingness and ABILITY to pay the price”.

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  • Tell me Mr Smith when will your prediction of oil returning to $40 come true.
    I feel an equivelent level of affection for Mr Smith as I do the local village idiot. A mixture of pity and amusement.

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  • Just looking at the HP graph, the housing market is NEVER flat until it is at the bottom. Maybe he htinks prices are at a new bottom, just waiting for the world to catch up

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  • Yes a village idiot with the wierdest agenda, but he is still in far too influential a position in the Sunday Times, and has now taken over the market narative column in their Home section if you have noticed. He must have some odd hold on his paymasters…

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  • I am willing to give Mr Smith’s speculation about oil prices some serious consideration but his house price prediction is a bit nuts.

    “Counter-intuitively, I took some encouragement from the Bank’s survey. It showed that the sudden shift in the housing market is overwhelmingly a credit-crisis effect and mainly on the mortgage-supply side, rather than a sudden collapse of confidence among buyers. It may be that credit conditions remain very tight all year. More likely is a gradual thaw as we move into the spring, helped by lower interest rates.”

    Huh? He correctly identifies the house price bubble as asset inflation caused by excess money supply then says that he is encouraged? Presumably, therefore, the banks will revert to liar loans, overrated CDOs and a collective amnesia so that the housing market can take off again?

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  • This isn’t economics. He’s got a blinkered view of the housing market and he’s attempting to find data to back up his argument, rather than letting the data speak for itself.

    With a 40% year on year drop in approvals, the only way is down. Sentiment has most certainly changed and was the driving force behind the boom. Expect prices to fall and keep falling.

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  • David Smith's Sub Prime. . . says:

    What Sub Prime?

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  • David Smith has a solid track record of being wrong about just about everything. Even the other editors on the Sunday Times think he’s a bit of a muppet.

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  • I’ve just conducted a survey and 100% of people questioned thought tick [email protected] was spot on.

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  • Recently, this idiot quoted in one of his articles that house prices rose in 1990. He always makes me laugh, I’ll give him that.

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  • Recently, he quoted in one of his articles that house prices rose in 1990. Case closed, he makes me laugh though, I’ll give him that.

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  • Bubbles. . . . says:

    I read a good letter in the Sunday Times from Trevor Evans. Which summed up very much I believe the position of most of us on this site.

    Especially good as it refered to succesive governments and their total and utter failure to in anyway manage the british economy or sterlings plight. The economics of the mad house have been applied to us all. Starting with the Labour governements an American loan to finance and already bankrupt NHS and put in being communistic ideals which might just as well been declared god has returned to the new Jerusalem and we dont have to worry about money anymore. Mr Evans corrctly concluded that our economic policy has been a national disgrace, and that our twin defecits our managed in cloud cuckoo land by politicians desperately seeking another 5 years in power in order to put the same crazy policies on poor Englands back.

    House prices are the sop to the people where we can all say to each other after dinner you know we made another £1000 this week on our house darling, and how David Smith can amazingly pass off a 50 billion trade defecit by saying that the figures were wrong by 5 billion pounds is totally and utterly improbable ignoring of course the extra 45 billion of borrowing the goverment needs to keep the wolf from the door, add to this the other defecits from computer projects etc etc etc..We are prpobably slipping into the red each year to the tune of 120 billion. Is David Smith trying to get elected? Where he will become the apologist for all parties, and lead us into a finacial world where what we wish is much better than what we deserve. Vote for David Smith..

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