Are we heading into another property boom? Don't bet the house on this rally continuing. "The believers in the bubble were wrong. They are still wrong. But, paradoxically, their alarmism may have helped to prevent the bubble they fear from developing. It has not, or at least not yet"
The most significant part to me is his reference to the credit cycle : "It is not hard to see why this has happened. (HPI) Throughout last year, money got cheaper. Many people ascribe the recent pick-up in prices to the Bank of England's interest rate cut in August, taking them to 4.5%, still low by historical standards. But money markets had been pushing down fixed-rate mortgages much earlier...."
that era of cheap easily available credit is now coming to an end as the author makes clear : "Money has stopped getting cheaper and has begun to go the other way.."
IMO asset bubbles do not survive periods of credit tightening (credit crunch) that we are now entering into.
Coincidentally that same author has another article in todays Guardian on the problems facing Iceland's economy in which this little nugget appears : "The strange thing is that Iceland could eventually trigger a sharp slowdown in Britain's housing market," says Mr Jessop."
It's well worth a read particularly for his comments on the ending of the carry-trade from Japan and it's possible consequences :
the second sentence of the second para is the one for you and all the other HPC merchants......surely you cant disagree with an eminent economist? :-)
"But, as Mr King has admitted on several occasions, he has no idea what will happen to house prices in future. Nor, he warns, does anyone else."
Mervyn King is very diplomatic and with good reason for every word he utters is scrutinised for 'hidden meaning'. A 'slip of the tongue' could have profound consequences.
BTW....... 7 points and closing. Are you looking over your shoulders yet ?
most definitely, not looking good at all, our playing is as dire as your predictions :-)
LOL. My prediction for a HPC doesn't come to fruition until the year end remember :-)
As for the footie, Chelsea's recent slips have certainly raised our hopes and we caught Arsenal and Newcastle in past seasons but it's still yours to give away. The odds are still against us but we're watching the 'turmoil' within Chelsea with interest.
I suspect that the Arse will give you a sound thrashing this weekend, I certainly hope so as we may need that :-)
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