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HousePricesWillFall

Listed below are comments made by HousePricesWillFall between Friday, 6th February 2009 and Thursday, 5th March 2009.

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QE Day (2) 9:16pm on 05 Mar 2009 Mr Mervin King
Governor of the
Bank of England
Threadneedle Street
London

Dear Mr King,

I heard that the Bank of England is planning to buy assets from the private economy to stimulate the wider economy.

This is just to let you know that I have a whole garage full of old furniture and other unneeded items that I would like to sell to your Bank. For you, I would even agree a price of just £10,000 – a bargain seeing that with the inflation you are generating you'll soon be able to sell these items for more than that.

Can I also take this opportunity to let you know that I have been saving hard for years now in order to be able to afford a semi-decent house for my small, young family. Now, the Bank of England is trying to reinflate the housing market bubble and thus to punish those who have lived within their means to save up. I do not believe that mortgage and credit availibility is a problem, the banks are leaning over backwards to lend. The problem is that there still no affordable and nice houses, even though we have a good deposit and a very good family income.

If you buy the items in my garage, I pledge to use the proceeds to buy a house in this country, rather than emigrating, thus stimulating the economy.

Further, I note that the Inflation Rate is actually still above the target, so I don't see any reason why action is needed now.

Finally, have you ever considered that there may be a REASON for the lack of economic activity currently. An economy is not like a fire that can be stimulated by adding fuel. People must have needs, desires and aspirations in order to spend, and if they don't have those then no amount of money will change that.

So please let me know if you are interested in the items in my garage. I can arrange free delivery in central London.

Yours sincerely,

PS - can anyone explain whether at some stage in the future the BoE will sell these assets back to the private sector?
The Goodwin pension questions 11:09am on 01 Mar 2009 It is really beyond me how Mandelson can tell the BBC:

"I think a lot of the workforce of the Royal Mail won't be thinking of the politics of this, but about their pension and their job security," he said.

"Both are in danger if we do not sort out the finances of the Royal Mail."

How come the gov't can't find it in itself to sort out the Royal Mail pension and services - when Darling is on the record to admit that some companies are too big to fail (and apparently some individuals too).

I would be more than happy to pay an extra couple of pence for a first class letter in order to keep a publicly-owned universal mail delivery business. With all the modern technologies, surely that can be arranged, even if it entails some painful processes of reorganisation, but better to sort this out in public ownership!
Lloyds and HBOS humbled 10:10am on 16 Feb 2009 Here is a extremely helpful commentary that may be useful in deciding how to aportion blame and responsibility:

http://news.scotsman.com/opinion/Anyone-who-welcomed-soaring-house.4982626.jp
Lloyds and HBOS humbled 9:26pm on 14 Feb 2009 #397 - I wouldn't worry about the 1.9% price jump for real estate reported by HBOS in January. Prices will continue to fall:

As far as I understand the statistics (please someone correct me if I am wrong), there are ca. 30,000 mortgages approved each month at the moment. Say HBOS has 20% of the market share, makes 6,000 mortgages in January (is that ~6 per HBOS branch?). Now, 6,000 seems quite a small sample and one would expect fluctuations. Also, who knows perhaps HBOS have become more risk averse - lending to those with substantial deposits and who are not as price-sensitive thus paying a few thousand over the odds.
Lloyds and HBOS humbled 7:00pm on 13 Feb 2009 Given that they already estimated a write-off of GBP10billion, GBP11billion seems not so bad....

But there is more serious side to this. I will move all my cash out of HBOS as soon as the 12% regular saver I have with them matures in a couple of months. I can only imagine that most other folks won't want to keep their cash in a effectively-failed bank. So there will be and probably already is a massive leakage of deposits out of HBOS. So Lloyds bought a shell, with a deteriorating mortgage book. They'll get to close all the HBOS branches in the next couple of years, and hence will be able to pick up a lot of retail customers -- except if they chose to bank elsewhere. So the question is: will Lloyds, now part-owned by the government and surely no longer the most nimble of banks, really be able to translate this acquisition into a bigger market share?
Why Sir James Crosby resigned 6:10pm on 11 Feb 2009 well well well -- of course you are right that his resignation is not an admission that Moore was right -- but why are you trying to cool down the collective temperament? Are you, and those you talk to, worried that we may yet have a proper erruption of built-up frustration?

Btw, you say that Moore was worried that borrowers would not be able to repay the loans -- but is that not the same as the wholesale markets freezing up for HBOS?

HBOS could no longer access these markets because those who lent out the cash to banks could no longer believe that HBOS would be able to pay it back if its mortgagees defaulted. If Crosby et al. assumed that the wholesale markets were limitless, then that is unexcusably poor judgement. Many of the bankers are still in denial and blame the failure of their banks on 'abnormal' market conditions. 'The market' sorts the wheat from the chaff, when it comes to healthy and unhealthy companies -- there is no such thing as an 'abnormal' market. They should have considered the possibility that funding from the wholesale markets may one day diminish. So, I don't see the distinction you are trying to make between Moore's concern and what ultimately brought down HBOS.
Daniels sacrifices bonus 4:08pm on 11 Feb 2009 The funny thing is that the dearth of bonuses will deepen the recession, because there will be less bankers who are spending loose cash on big ticket items. So it may actually be in the govt's interest to protect the bonus payments, as a form of spending stimulus. Perhaps that's why they did not suspend those contracts as they were buying into RBS and Lloyds/HBOS.

I agree with many of the sentiments above, especially that the house price bubble is the key to all this, and that many who over-extended themselves with big mortgages are now being rewarded with near-0% interest, while first time buyers still have to pay substantially the same rent - although even they have started falling.
Daniels sacrifices bonus 12:05pm on 11 Feb 2009 Apparently my previous post was not only self-explanatory but also self-evident.

> 140. At 11:01am on 11 Feb 2009,
> HousePricesWillFall wrote:
>
> This should be self-explanatory:
>
> http://www.ipetitions.com/petition/Crosby_Resign/
Daniels sacrifices bonus 11:01am on 11 Feb 2009 This should be self-explanatory:

http://www.ipetitions.com/petition/Crosby_Resign/
Bonus buck stops with Brown 10:33am on 06 Feb 2009 there is one way we can all punish the banks:

Withdraw your savings and keep them under the mattress for a couple of weeks / months. They'll notice if people all over the country start withdrawing 5-10k.

Why should we keep cash in the bank for 1% interest (if one is lucky) so that they can pay themselves thousands. If they have other jobs to go to then please let them go -- good riddance!

It is absurd - while I am saving up for a deposit, I still have to pay full rent. Those who overextended themselves with bubble-priced houses, now get their mortgage for free - courtesy of the taxpayer!

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