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georgist

FT: Carney warns cabinet of no-deal Brexit property crash

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https://www.ft.com/content/984b15e0-b76b-11e8-bbc3-ccd7de085ffe

You can read the article if you google the content then use the google URL:

https://www.google.com/search?q=ft+Carney+warns+cabinet+of+no-deal+Brexit+property+crash

The gist of it. Chris Giles removes his tongue from Carney to read out the thoughts of Carney:

1. property prices are going to crash

2. panic and demand no Brexit

Now, will this work? Boomers want Brexit, in the main. Boomers have the housing.2hvm5p.jpg

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I agree that many don't care, or even that they actively see the damage and want them to fall. But this is not the case for many. Someone on this forum is for sure not representative of the mainstream.

Either way it's a dilemma. And it's interesting that Carney and Chris Giles think this will work. Or perhaps they think it won't work, but they are desperate.

Either way: it won't work. Because the UK isn't tenable in its current state.

The establishment also faces the same dilemma. They have to make someone bear the loss. The boomer block vote is no longer the gold stamp, as we saw when Corbyn nearly got in. Do the establishment:

1. mild GBP inflation and crash housing => boomers without a pot to piss in

2. big inflation keeping housing up nominally => boomers without a pot to piss in

No way to square this circle. It's all about demographics.

Please don your flame retardant underwear. It's getting hot.

Edited by georgist
thought!

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Man builds massive bonfire and says "we are all going to burn".

Quote

The property crash would be driven by rising unemployment, depressed economic growth, higher inflation and higher interest rates, Mr Carney warned.

The governor said that unlike the BoE’s rate cut in 2016, this time the shock to Britain’s economy would come from disruption on the supply side, as trading relations between the UK and EU took a hit.
 

What does he mean by this! xD What a wanker. 

Edited by XswampyX

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Carney said after the vote to leave that the UK economy would crash and so he had to cut interest rates ... since the vote to leave the UK economy has gone from strength to strength according to the government. So it is now certain that house prices will not fall if we have  'no deal' and will indeed rise by 20 to 30% .

Edited by satch

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45 minutes ago, Chewing Grass said:

 

Up North houses are worth diddly-squat in real terms compared to the wank-stain prices below Watford Gap.

 

You are talking nonsense, the property bubble is everywhere in the UK.

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57 minutes ago, georgist said:

https://www.google.com/search?q=ft+Carney+warns+cabinet+of+no-deal+Brexit+property+crash

The gist of it. Chris Giles removes his tongue from Carney to read out the thoughts of Carney:

1. property prices are going to crash

2. panic and demand no Brexit

Now, will this work? Boomers want Brexit, in the main. Boomers have the housing.

If it comes about we can downsize into an even bigger house. What's not to like.

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7 minutes ago, Banned said:

You are talking nonsense, the property bubble is everywhere in the UK.

Admittedly some bubbles are bigger than other bubbles but if you factor interest rates in i.e. sub 5% compared to say circa 10% when a 3 bed semi was 60K ~30 years ago the net cost of a 280K semi is more or less the same.

Unfortunately I have done the maths as my kid is looking for one and 250K is not quite enough.

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7 minutes ago, Chewing Grass said:

Admittedly some bubbles are bigger than other bubbles but if you factor interest rates in i.e. sub 5% compared to say circa 10% when a 3 bed semi was 60K ~30 years ago the net cost of a 280K semi is more or less the same.

Unfortunately I have done the maths as my kid is looking for one and 250K is not quite enough.

I factor in the price of the house, it truly is nonsense to claim the housing bubble is only in southern England. 250k is 9 times average UK salary, if this is not a bubble then i dont know what is.

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This is an interesting read from the So-Called BBC in 2000, very retro

http://news.bbc.co.uk/1/hi/business/593477.stm
 

Property prices rose in December at a rate of 30% a year. Estate agents say it is not a repeat of the disastrous 1980s boom. Are they right? BBC News Online's Alex Hunt reports.

When the good times were rolling in 1989, property prices were rising at an annual rate of 34%.

Quick, buy a house, note average wage was 12K gross back then and average house UK was 60K (London 97K)

Graph:-

_593477_house_prices_300_3.gif.79a5b708478f6de61ccb2e9c29e47ab9.gif

 

Note how different the BBCs reporting is compared to today, very telling....

Edited by Chewing Grass

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2 hours ago, Chewing Grass said:

Most Boomers are actually Sane and know they are going to die soon so don't actually give a fuck about the price of their house.

This is a myth pedalled by the frigging media and their bankster buddies down south.

Up North houses are worth diddly-squat in real terms compared to the wank-stain prices below Watford Gap.

Anyway those with any brains would surely have shorted their houses by now.

Bring it on 'you can't fit a house in the pocket of your shroud'.

Pass me another bottle of brown-ale and a bag of pork-scratchings.

Great comment if I may say.

Lot of oldies are wathcing their kids and grandskids living in insecure tenancies and on low wages.

Quite why your average Joe can work out the basic maths and the politicians can't, I'll never know.But I suppose if your snout is deep enoguh in the trough you can't see the trees,

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3 hours ago, sancho panza said:

Great comment if I may say.

Lot of oldies are wathcing their kids and grandskids living in insecure tenancies and on low wages.

Quite why your average Joe can work out the basic maths and the politicians can't, I'll never know.But I suppose if your snout is deep enoguh in the trough you can't see the trees,

I do think it is dawning on them that it's a pyramid scheme. This strategy from Carney shows (yet again) he's out of touch.

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Carney is an absolute tosser. Banging on about unemployment rising (made up figures due to zero contract hours and tax credits) and cutting the interest rates like in 2016 to save the day (0.25% fuck all) as they have no room to manoeuvre anymore. In some ways I’m glad this bastard will be in place to watch the forthcoming shitshow unfold, and watch him squirm to try and pin the global financial crisis 2008 chickens coming home roost to Brexit. 

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47 minutes ago, Sideysid said:

Carney is an absolute tosser. Banging on about unemployment rising (made up figures due to zero contract hours and tax credits) and cutting the interest rates like in 2016 to save the day (0.25% fuck all) as they have no room to manoeuvre anymore. In some ways I’m glad this bastard will be in place to watch the forthcoming shitshow unfold, and watch him squirm to try and pin the global financial crisis 2008 chickens coming home roost to Brexit. 

This. At some point we are going to have to pay for this. The whole economy is unsustainable. People and government getting into massive debt, housing bubbles, mass numbers of unproductive peo0e, all been kept by a shrinking number of taxpayers, loading young people with massive debt, insecurity in work for many, stagnant wages. 

At some point it implodes. Why not blame it on the evil brexiteers?  

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8 hours ago, sancho panza said:

Great comment if I may say.

Lot of oldies are wathcing their kids and grandskids living in insecure tenancies and on low wages.

Quite why your average Joe can work out the basic maths and the politicians can't, I'll never know.But I suppose if your snout is deep enoguh in the trough you can't see the trees,

I wish this was true SP, but I find them detached and often unable to join the dots, preferring to blame society as a whole and expecting it to be responsible for solving their problems.

As an example, I have a relative who bought their council house at a substantial discount but always complains that their son is a the mercy of BTL landlords as he cannot get a council house!

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47 minutes ago, One percent said:

This. At some point we are going to have to pay for this. The whole economy is unsustainable. People and government getting into massive debt, housing bubbles, mass numbers of unproductive peo0e, all been kept by a shrinking number of taxpayers, loading young people with massive debt, insecurity in work for many, stagnant wages. 

At some point it implodes. Why not blame it on the evil brexiteers?  

This is what worries me, and with Brexit it has made my potential escape from this sinking ship that is the UK that much more difficult....perhaps someone could start a thread where we share our thoughts/ideas on escape plans?

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8 minutes ago, MrXxx said:

This is what worries me, and with Brexit it has made my potential escape from this sinking ship that is the UK that much more difficult....perhaps someone could start a thread where we share our thoughts/ideas on escape plans?

We have one. Buy the island 🌴. We just need a lottery win and sorted. 

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9 minutes ago, MrXxx said:

This is what worries me, and with Brexit it has made my potential escape from this sinking ship that is the UK that much more difficult....perhaps someone could start a thread where we share our thoughts/ideas on escape plans?

Well guys, I'm off to work in Norway next week for at least a year, let me know how you're all getting on

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8 hours ago, sancho panza said:

Great comment if I may say.

Lot of oldies are wathcing their kids and grandskids living in insecure tenancies and on low wages.

Quite why your average Joe can work out the basic maths and the politicians can't, I'll never know.But I suppose if your snout is deep enoguh in the trough you can't see the trees,

Totally agree. They portray leave voters as being old and ruining the future for the young.

I'm not young or old but voted leave not for my benefit but for the benefit of my children. I hate the thought of my children having to sign up to life of slavery for the pleasure of living in one of the tiny new build flats round here.

They seem to convieniently forget that as you say, the majority of those oldies will have children and grandchildren and will be fully aware of the difficulties they face with regard to housing.

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45 minutes ago, null; said:

I'm not young or old but voted leave not for my benefit but for the benefit of my children. I hate the thought of my children having to sign up to life of slavery for the pleasure of living in one of the tiny new build flats round here.

You voted leave because you thought it would making housing more affordable?

Could you explain the reasoning behind that?

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Solving all problems with monetary action would seem to be madness.  Eg, if he's worrying about the impact on house prices now surely the answer would be to try to control asset price inflation when it was possible to.  Yet at those points in the past the answer was 'it isn't our job to worry about asset prices'.  They also made the grave mistake of mixing inflation due to external and internal factors; when inflation stayed reasonable after their policy they called it a success, yet inflation due to external factors (that they can't control) was very negative, while internal inflation was out of control but masked.  I still have no idea how they actually got away with this.

The right answer in the past and in the future would be to use fiscal policy to ensure that 'bad things are discouraged', as well as a bit of monetary policy to steer things along.  

ed -- the guy says we'd need higher interest rates after a Brexit supply shock.  This is backwards -- you don't influence the economy with interest rates at that point.  Better to take the inflation and keep interest rates the same; you'd get the stimulus from the negative real-rates.  You'd only need to raise rates when things got out of control because the stimulus from the negative real rates was too effective.  At even at that point you would use fiscal policy to protect debt holders -- the one thing that doesn't make sense is to make the recession worse by forcing everyone holding debt into bankruptcy.

Edited by dgul

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1 hour ago, stoobs said:

You voted leave because you thought it would making housing more affordable?

Could you explain the reasoning behind that?

It's only one of the reasons I voted leave, there are many others. A rapidly growing population puts upward pressure on houses prices. I know some will argue that prices are driven by the cost and availability of borrowing, which is certainly a factor, but not the only one.

I own my home outright, I would be happy to see house prices fall because I (and all of us) will benefit in many other ways from cheaper housing.

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3 hours ago, null; said:

Totally agree. They portray leave voters as being old and ruining the future for the young.

I'm not young or old but voted leave not for my benefit but for the benefit of my children. I hate the thought of my children having to sign up to life of slavery for the pleasure of living in one of the tiny new build flats round here.

They seem to convieniently forget that as you say, the majority of those oldies will have children and grandchildren and will be fully aware of the difficulties they face with regard to housing.

I live in a low wage city and my experience of my friends over the last ten years is lower wages and higher rents.

A good friend, used to earn £10 an hour van driving in 2007,now those wages are minimum wage.Warehouses are stack full of cheap labour.There's a reason they want in.There's a reason Carney wants in and that's cheap labour reducing wage inflation.Quite how these dunderheads at the Bank of England are scratching theri heads as to why there;s no real wage growth I'll never know.I mean what did they expect as a result of allowing cheap labour to pour in.

As I've said before,Leicester was 51-49 to Remain.This includes 40,000 students.

And then you get all these people saying they were lied to during the Brexit debate.What did they expect, a bunch of Westminster politicians were speaking.They never talked about declining real wages or rents rising.

2 hours ago, JoeDavola said:

I got chatting to a bloke in his 50's the other day. Minimum wage earner.

His house cost him 40K when he bought it, 20 years ago. The same house now sells for 160K.

1999 min wage: 3.60/hr

2018 min wage: 7.83/hr

....i.e. his kids are having to pay twice as much for a house as he did. (and £160K is a cheap house by Belfast standards) Let them fucking crash and crash hard. 

It's not rocket science maths is it Joe.Yet it's amazing how the Westminster elite were stunned by the result.

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