Monday, November 29, 2010

Mortgage approvals fall again.

Lending to Individuals: October

Number of approvals down 0.39% from September, but it's six months of falls in a row now.

Posted by phdinbubbles @ 09:49 AM (1468 views)
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7 thoughts on “Mortgage approvals fall again.

  • its ok …. merve isnt worried 🙂 From the november inflation press conference. [posted this at the weekend sorry for repeat].

    “Joel Hills, Sky News: The IMF recently described the UK housing market as worrisome. Are you worried about the UK housing market?

    Mervyn King: I worry about many things. I wouldn’t say that was the one that was top of my list; I think the world economy is the one that worries me most. We have seen a surprisingly buoyant housing market, given that activity is about half what it was at the peak of the levels of activity before the crisis. We’ve seen initially almost an effective closure of the mortgage market for six months. Now the banking sector’s coming back into it; mortgage rates are clearly well above Bank Rate.

    But I think there are two very instructive differences between the US housing market, with which perhaps they’re more familiar, and the UK housing market. The first is that house prices in the UK did fall in the immediate wake of the financial crisis, but then recovered. They are down 1% on the past three months – some signs of a weakness in activity and prices. But we’ll have to monitor where that goes.
    In the United States house prices are still 26% below their peak. Here’s it’s about 13%. That’s a big difference.

    The result of that is that, whereas fewer than 5% of homeowners in this country have negative equity, in the United States it’s 23% – enormous difference. The result of that is that mortgage arrears, defaults and repossessions are at record post-War levels in the United States, and here they are markedly lower than they were in the ’80s and ’90s – lower than the ’90s, and falling.

    So, yes, we’re always worried, and I don’t predict – I can’t predict what will happen. But we will monitor what happens and take action to keep inflation on track to meet the target.

    Joel Hills, Sky News: I ask the question because in future potentially you’ll have the power to intervene when you perceive asset bubbles to be forming. I was wondering if you had the power today, whether you or any other member of the Monetary Policy Committee – given that there are a range of views and judgements – would choose to intervene today?

    Mervyn King: The Monetary Policy Committee will not have responsibility for macroprudential policy. That will go to a Financial Policy Committee. The members of that haven’t been appointed yet. So I do not presume –

    John Hills, Sky News: You will be on it, would you do that?

    Mervyn King: – I do not presume to speak on their behalf. I will merely speak about the objective, which is not to pr1ck asset bubbles; it is to take actions to maintain the stability of the financial system. That’s a very important distinction.”

    http://www.bankofengland.co.uk/publications/inflationreport/conf101110.pdf

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  • so he is still NOT doing his job

    keeping inflation below the set level

    if a policeman did not do his job would he be fired?

    If a nurse didnt do their job would he/she be fired?

    if you asked a builder to build a wall 3 ft high and he built it 12 foot high would you fire him?

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  • glad you liked it mark – you should read the whole lot or watch it – quite instructive… thats all i will say ;).

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  • sibley's b'stard child says:

    “But I think there are two very instructive differences between the US housing market, with which perhaps they’re more familiar, and the UK housing market.”

    Yes, that’s right Merv; jingle-mail and an absence of all-or-nothing State support.

    What a f*cking pecker.

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  • A young man named David received a parrot as a gift. The
    parrot had a bad attitude and an even worse vocabulary.

    Every word out of the bird’s mouth was rude, obnoxious
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    David was stunned at the change in the bird’s attitude.

    As he was about to ask the parrot what had made such a
    dramatic change in his behavior, the bird spoke-up, very
    softly, “May I ask what the turkey did?”

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  • Q. Are you worried about the UK housing market?

    A. We have seen a surprisingly buoyant housing market

    That’s why he isn’t worried about it, inflation is doing everything he needs.

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  • this might interest you hpw re mortgage rates, as flash stated before he left :

    “Jeremy Warner, Daily Telegraph: The IMF, while congratulating the UK on its deficit reduction plans, has suggested that there should be a contingency plan for if growth falls short. What beyond QE is our contingency plan? And a slightly related question: the Inflation Report acknowledges that anticipation of more QE is one of the factors driving bond yields to near record lows. Are you concerned about stimulating fresh bubbles in bond markets and central bankers?

    Mervyn King: Let me take the second one, and then you can remind me about the first. On the second one, the level of long-term real interest rates is not driven by monetary policy; it’s driven by what’s happening in the balance in world capital markets between flows of saving and investment. That’s a real variable. Of course when inflation is expected to be low for a long time, that will pull down nominal rates. That’s just a result of meeting the inflation target at a time when real interest rates are very low.

    There is a risk that at some point the flows of savings and investment will change. If we get a real rebalancing in the world economy, then no doubt financial markets will wake up to the fact that in the longer term real interest rates could be higher, because the balance between savings and investment will have altered. At that point then asset prices will fall back as real interest rates move up, and that could create some risks looking further ahead; and we’re very conscious of that. But there’s nothing we can do as central banks, either individually or collectively, to influence the overall balance between savings and investment, other than to lend our support and weight to those people who want to bring about an orderly rebalancing of the world economy.”

    the second issue is “the Inflation Report acknowledges that anticipation of more QE is one of the factors driving bond yields to near record lows” – it says ANTICIPATION…. so therefore some downward pressure on bond yeilds is already locked in. So then the question is what happens if there isnt? This is how markets work – this is why instead of the dollar collapsing after QE2 (per schiffs argument) it strengthened (per precther’s argument). Lets say to give the dollar bears some slack that change in trend may be a short term thing.

    Of course you could say that the movement in the dollar is all due to the “collapsing” state of the EU. The fundamental argument.

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