Brown tries to boost overheated housing market.

I don't think it's about saving the economy any more. I think Brown will happily bankrupt the country just so long as he can hold something together long enough to get through an election without it making him an unelected Prime Minister.

The irony is that his vanity will bring in the IMF - the final shattering of his delusion that he can be any different from previous Labour Chancellors.

FoFP

Most people just do not understand where the man came from and the nature of his character.

Everything he does is done with a desire for vengeance. He wants to get his own back against Tony Blair, against Aleck Salmond, against David Cameron, against those who put him down at school, against every journalist who ever said anything nasty about him and against those who were conspiring to bring him down.

The terrifying aspect to this is that he is prepared to take the UK or in fact the whole global financial system down with him.

Neb

I presume you are referring to this

?

I don't see this as trying to hold up the price of houses.

The householder will still get stuck with the loss, he just won't be kicked out because of it. In fact I think that this is a better deal for the county - by leaving the loss with the owner the banks won't get stuck with it

tim

It means house prices wil stay higher for longer, thus more people will have to over commit, or the banks won't lend, so either more bad debt, repossesions, or a market which cannot recover due to attempts to maintain stupidly high prices which no one can afford. A reciepy for finiancial armagedon, on top of the financial armageddon we already have.

Q. How shall we put the fire out? A. Throw more petrol on it.

Perhaps it will, perhaps it won't, but I don't see that this is the aim.

Having a few less repos in the market does not stop the rest of the market falling.

I'm looking at a couple of repos ATM, they are not selling despite being 30% under the other houses in the street. But even having them in the market isn't forcing the price of other houses down. Nothing is selling at the moment so keeping people in their houses makes sense to me

I think your logic is faulty

tim

It does.

Allowing people to make reckles decisions about what they can afford to buy is a receipy for disaster.

I know your wrong.

The only reason people paid stupid prices was because they hoped there would be a bigger mug to pay a higher price.

30% probably won't sell but 50% or more will. Get it down to 60% or 70% off and you should have a few buyers shiffing around.

The sooner they are repossed the sooner prices will fall to a realistic level they can afford, and the sooner firs time buyers will be abe to afford a house and the sooner the banks will be wiling to lend on the houses.

Browns policy is lunacy, the common type of lunacy see in people with feeble brains.

"Properties worth a quarter of a million pounds last year are going for under 100,000 after families who failed to meet their mortgage were kicked out."

At least it will assure his place in history.

It's a long time since I studied the US Depression, but I recall that Hoover implemented a reflationary policy and congratulated himself in

1930 on it having worked very sucessfully. The Wall Street index had risen back to 90% of its October 1929 peak.

Then everything went completely to hell.

FoFP

The UK had interest-only mortgages and 125% mortgages, but we never got to the US stage of having "negative Amortisation" mortgages - mortgages where the debtors don't even pay all of the interest.

It seems that Brown has just foisted these on the country, with the taxpayers on the hook for them.

FoFP

The recession is here because the structure of the economy is such that what's being produced is not what is demanded by people will the money they have. Much of that is because production was gerared to the bubble as people borrowed from their own future incomes. Production not only has to return to a pre-bubble normal, but to match restrained spendding as people repair their own balance-sheets from the excesses of the bubble.

Trying to prevent this, and to return to the lending levels and demand structure of the bubble, will only delay the necessary changes and repair. To that extent, more damage will be done to long-term growth than otherwise because we'll return to growth only after much of the repair is completed.

The Japanese went the same way and got 20 years of deflation, recession and impaired growth for its trouble. Folks there have been warning the West about this, but it's clear that those in power aren't willing to listen.

A big part of the problem is generals fighting the last war. The US is terrified of a repeat of the 1930's, so they implement policy based on an alternative history theory of how the 30's could have been prevented

- Bernanke's pet subject. Meanwhile in Europe, they're terrified of a repeat of the German hyperinflation.

I'd be the last to argue there aren't lessons to be learned from previous bubbles, but why concentrate on the 1930's when the Japanese bubble (to 1989) and still-ongoing bust can teach us so much about how they work in modern times?

And make one of the arsonist the Fire Chief...

FoFP

There are three basic lies that the Government are trying to sell: i) that it?s a global crisis (hardly), ii) that the crisis is not home grown but has been imported like some sort of bird flu and iii) that the worst effects of the crisis can be somehow alleviated by positive Government intervention.

Intervention won?t work and they know it. The only interventionist approach is Keynesian and note how they never ever mention the ?K? word that?s because we?re a good eight years off any Keynesian economic model.

Because we?re off the Keynesian model intervention effectively becomes impossible because they simply have no room for manoeuvre (for example the potential sterling crisis).

So we get lots of spin but then the devil is always in the detail. This latest scheme looks at best that it would help around 9,000 mortgage holders set against 75,000 potential repossessions however many of those would have already been helped by existing schemes (mortgage swaps) available from the banks.

So in the end, the Government is yet again caught offering what already exists.

Their interventionism amounts mostly to no more than spin designed to make it look as if they're doing something good (that the Tories would decline to do) in the hope it will get them as safely as possible to an early, shit or bust, election next year.

Once the election is out of the way look forward to good old-fashioned Thatcherite monetarism lots of draconian public spending cuts with all the consequences that go with it - whoever wins.

They?re all just too scared to admit it - that?s all.

70%

Well they did have a drought at a time when agriculture was a much bigger factor in the economy and it can't be a coincidence that 1930 was the year of the Smoot-Hawley Tariff Act.

Nonsense. The market fell this month, I confidently predict it will fall for at least 10 of the next 12 whatever GB does.

This is in the past. This action proposed by GB cannot make people more or less likely to undo these decisions as they cannot now be undone.

And I know your grammar is wrong

This is in the past

There will still be people selling at this price. There will still be people being repossessed and people voluntarily selling at this price

A few extra wont make any difference

> "Properties worth a quarter of a million pounds last year are going for > under 100,000 after families who failed to meet their mortgage were > kicked out." And is the house down the road on the market for 100K or 250K? I bet you it's the latter.

The repo-ed house I looked at a couple of months ago was originally on sale at 145. After the mortgage company took it back it was on offer at 99. The

99K house has now gone, but I can still see at least three houses on the same estate on offer at 145 and none at any less.

tim

That happened in the 80s. Our kids had grown too big for the small town house we lived in but when we came to sell there were always two or three similar properties on the estate going for less because they were repossessed. Wasn't all gloom because when we finally sold ours we bought a repo'd 3 bed semi for less than the original price. Just about covered the extra costs incurred by having ours on the market so long.

The market wil pick up in 2020, thats for sure.

I''ll be retired by then :-(

tim

Cheer up plenty of opertunnty to pick up a nice cheap retirement home, if you still have your facilties,