Interest rates
Comments
-
Margin call is a good film that describes the crash of 08. And amazingly right at the end it shows they revert back to type but call cdos etc by a different nameNapaAddick said:The world economy was on its way to a true reckoning back in 2008-09, but a wave of free money and government spending stalled it 1/2 way through its downward spiral. It just pushed off the inevitable.
Now that we are no longer printing "free" money (where the interest charged is lower than inflation,) just this slight change alone is already starting to worry the markets. In the USA we have 3.8% unemployment, 2% inflation, a record stock market... and yet our deficit in Obama's last year was $666 billion, 50% higher than the year before. This year it will be a trillion. And this is while the economy is roaring (GDP up 4.2% last quarter here.)
God knows what happens in the next recession. But we have kicked the can down the road as far as it will go. When the music stops, and people stop spending on things like iPhones and new cars and buying houses, it will be a real mess. My wine sells for $175 per bottle. Although I am doing well right now, no one needs that when people are in fear of their next paycheck.
Same game, just different terminology
I agree with a lot of what you say2 -
$175!!!NapaAddick said:The world economy was on its way to a true reckoning back in 2008-09, but a wave of free money and government spending stalled it 1/2 way through its downward spiral. It just pushed off the inevitable.
Now that we are no longer printing "free" money (where the interest charged is lower than inflation,) just this slight change alone is already starting to worry the markets. In the USA we have 3.8% unemployment, 2% inflation, a record stock market... and yet our deficit in Obama's last year was $666 billion, 50% higher than the year before. This year it will be a trillion. And this is while the economy is roaring (GDP up 4.2% last quarter here.)
God knows what happens in the next recession. But we have kicked the can down the road as far as it will go. When the music stops, and people stop spending on things like iPhones and new cars and buying houses, it will be a real mess. My wine sells for $175 per bottle. Although I am doing well right now, no one needs that when people are in fear of their next paycheck.
Bloody mad. I was in a restaurant last night where prices are up to 200 quid. We got a very good wine for 45 quid and, not bring a wine connoisseur, I very much doubt the higher priced wines would have been worth the price differential.0 -
Margin Call is a good film.cabbles said:
Margin call is a good film that describes the crash of 08. And amazingly right at the end it shows they revert back to type but call cdos etc by a different nameNapaAddick said:The world economy was on its way to a true reckoning back in 2008-09, but a wave of free money and government spending stalled it 1/2 way through its downward spiral. It just pushed off the inevitable.
Now that we are no longer printing "free" money (where the interest charged is lower than inflation,) just this slight change alone is already starting to worry the markets. In the USA we have 3.8% unemployment, 2% inflation, a record stock market... and yet our deficit in Obama's last year was $666 billion, 50% higher than the year before. This year it will be a trillion. And this is while the economy is roaring (GDP up 4.2% last quarter here.)
God knows what happens in the next recession. But we have kicked the can down the road as far as it will go. When the music stops, and people stop spending on things like iPhones and new cars and buying houses, it will be a real mess. My wine sells for $175 per bottle. Although I am doing well right now, no one needs that when people are in fear of their next paycheck.
Same game, just different terminology
I agree with a lot of what you say1 -
Honestly was amazed when right at the end they just go back to doing what they were doing againstonemuse said:
Margin Call is a good film.cabbles said:
Margin call is a good film that describes the crash of 08. And amazingly right at the end it shows they revert back to type but call cdos etc by a different nameNapaAddick said:The world economy was on its way to a true reckoning back in 2008-09, but a wave of free money and government spending stalled it 1/2 way through its downward spiral. It just pushed off the inevitable.
Now that we are no longer printing "free" money (where the interest charged is lower than inflation,) just this slight change alone is already starting to worry the markets. In the USA we have 3.8% unemployment, 2% inflation, a record stock market... and yet our deficit in Obama's last year was $666 billion, 50% higher than the year before. This year it will be a trillion. And this is while the economy is roaring (GDP up 4.2% last quarter here.)
God knows what happens in the next recession. But we have kicked the can down the road as far as it will go. When the music stops, and people stop spending on things like iPhones and new cars and buying houses, it will be a real mess. My wine sells for $175 per bottle. Although I am doing well right now, no one needs that when people are in fear of their next paycheck.
Same game, just different terminology
I agree with a lot of what you say
It’s crazy
And the worse thing is, it’s not those guys that suffer. I don’t believe it’s changed. I also believe the housing market suits the government to a tee. They can just keep putting off the inevitable.
We have shed loads of threads on housing and not to take it down that route (although int rates are inextricably linked), it’s not stopping in London and the south east. My best friend is moving from his 2 bed ground floor flat in forest hill that they bought for £550k and are moving into a 3 bed in Peckham for £800k
Where does it end (in London anyway)0 -
Ramp up the interest rates I say - no mortgage so I don't care. More interest income means I can continue to buy wines from Napa.
Oh - sorry - I was briefly turning into William Rees-Mogg there.8 -
The house price to salary ratio in London is completely out of control - I'm assuming foreign money has kept this afloat. I keep waiting for the property crash - maybe rising interest rates will be the trigger once debt can't be serviced.
Will governments be in a position to bail out the banks again when it all comes crashing down?0 -
My wine goes for about $400-450 in restaurants.stonemuse said:
$175!!!NapaAddick said:The world economy was on its way to a true reckoning back in 2008-09, but a wave of free money and government spending stalled it 1/2 way through its downward spiral. It just pushed off the inevitable.
Now that we are no longer printing "free" money (where the interest charged is lower than inflation,) just this slight change alone is already starting to worry the markets. In the USA we have 3.8% unemployment, 2% inflation, a record stock market... and yet our deficit in Obama's last year was $666 billion, 50% higher than the year before. This year it will be a trillion. And this is while the economy is roaring (GDP up 4.2% last quarter here.)
God knows what happens in the next recession. But we have kicked the can down the road as far as it will go. When the music stops, and people stop spending on things like iPhones and new cars and buying houses, it will be a real mess. My wine sells for $175 per bottle. Although I am doing well right now, no one needs that when people are in fear of their next paycheck.
Bloody mad. I was in a restaurant last night where prices are up to 200 quid. We got a very good wine for 45 quid and, not bring a wine connoisseur, I very much doubt the higher priced wines would have been worth the price differential.
You can't really get good Napa Cabernet for less than $75 in stores anymore. But you can find really good Bordeaux (if it's a good vintage like 2015) for about $40. And really good Spanish Grenache from old vines for $20. Cab is the king of grapes, but a lot of the high price is simple demand vs. scarcity. Screaming Eagle Napa Cab sells out in a day at $1000 per bottle. Lunacy. No surprise the owner of that wine is the owner of Arsenal.0 -
Salary ratio v interest rates, think there is very little difference overall compared to when I first bought in the early 90's. 80k house at 10% interest rate v's 450k house at 2% interest rate - not much in it, if anything probably cheaper today.hoof_it_up_to_benty said:The house price to salary ratio in London is completely out of control - I'm assuming foreign money has kept this afloat. I keep waiting for the property crash - maybe rising interest rates will be the trigger once debt can't be serviced.
Will governments be in a position to bail out the banks again when it all comes crashing down?
Savings rates are beginning to tick up, but doubt many accounts will see the full 0.25%0 -
The ratio was 4.4 in 1995 and 12.2 by 2012 based on the median income and house price in the capital. I think the ratio is now in excess of 15.Rob7Lee said:
Salary ratio v interest rates, think there is very little difference overall compared to when I first bought in the early 90's. 80k house at 10% interest rate v's 450k house at 2% interest rate - not much in it, if anything probably cheaper today.hoof_it_up_to_benty said:The house price to salary ratio in London is completely out of control - I'm assuming foreign money has kept this afloat. I keep waiting for the property crash - maybe rising interest rates will be the trigger once debt can't be serviced.
Will governments be in a position to bail out the banks again when it all comes crashing down?
Savings rates are beginning to tick up, but doubt many accounts will see the full 0.25%
Low interest rates and lack of credit control have led to this anomaly - if interest rates were to rise it would all collapse.
2 -
Until rates go up meaningfully there won't be many forced sellers, so the pain in the housing market is felt by the middlemen (estate agents) as volumes have collapsed.hoof_it_up_to_benty said:The house price to salary ratio in London is completely out of control - I'm assuming foreign money has kept this afloat. I keep waiting for the property crash - maybe rising interest rates will be the trigger once debt can't be serviced.
Will governments be in a position to bail out the banks again when it all comes crashing down?
However if sentiment turns down then speculators in particular may try to get ahead of the queue, and then all hell could break loose especially in the new build market - anyone been to the Nine Elms ghost town recently?0 -
Sponsored links:
-
Terrible... Some of our youngsters may have to sell their sports cars and have a stay at home holiday this year. God help them if they have to find a deposit., might have to for sake night clubbing.4
-
I bought my first place 3 weeks ago...that nailed on means interest rates will rocket and house prices plummet in the next few years.0
-
People should buy places to live not to make a profit. P5
-
I'm sure thats all spot on, but interest now compared to then mean likely very little difference in monthly payment. London is the worst of course, other parts of the country it's probably now considerably less than back in the early/mid 90's as house prices have barely kept up with inflation yet interest rates have plummeted.hoof_it_up_to_benty said:
The ratio was 4.4 in 1995 and 12.2 by 2012 based on the median income and house price in the capital. I think the ratio is now in excess of 15.Rob7Lee said:
Salary ratio v interest rates, think there is very little difference overall compared to when I first bought in the early 90's. 80k house at 10% interest rate v's 450k house at 2% interest rate - not much in it, if anything probably cheaper today.hoof_it_up_to_benty said:The house price to salary ratio in London is completely out of control - I'm assuming foreign money has kept this afloat. I keep waiting for the property crash - maybe rising interest rates will be the trigger once debt can't be serviced.
Will governments be in a position to bail out the banks again when it all comes crashing down?
Savings rates are beginning to tick up, but doubt many accounts will see the full 0.25%
Low interest rates and lack of credit control have led to this anomaly - if interest rates were to rise it would all collapse.0 -
Carney is stockpiling amunition to fire at the Brexit shitfest. Most inflation is due to A50 issues and falling pound. A few public employees given half a percent over inflation after 10 years of no rises doesn't equal rampant wage fuelled inflation, but hey my economics A level was only a D. But this was in the days when you didn't get an A for spelling your name right on the exam paper.golfaddick said:
A £175k mortgage will mean about a £25pm increase. Anyone with a £500k mortgage (thus about a £70pm increase) can probably afford it.1905 said:
But the size of some mortgages out there now, it wont take too much to knock some people over ...............Addickted said:I used to be so jealous of my friends working in the banking sector who were only paying 2% interest on their mortgages.
Then we had 'Black Wednesday' when interest rates were hiked up temporarily to 15%.
0.75%? Pah…...
Next increase (again 0.25%) wont be for another year or so.....certainly at least 3 months after Brexit.
you never know, rates might even go back down again if Brexit is a total f**k up.0 -
Napa. I tuned out when you claimed America has 3.8% unemployment. Has Trump mandated LSD consumption?cabbles said:
Margin call is a good film that describes the crash of 08. And amazingly right at the end it shows they revert back to type but call cdos etc by a different nameNapaAddick said:The world economy was on its way to a true reckoning back in 2008-09, but a wave of free money and government spending stalled it 1/2 way through its downward spiral. It just pushed off the inevitable.
Now that we are no longer printing "free" money (where the interest charged is lower than inflation,) just this slight change alone is already starting to worry the markets. In the USA we have 3.8% unemployment, 2% inflation, a record stock market... and yet our deficit in Obama's last year was $666 billion, 50% higher than the year before. This year it will be a trillion. And this is while the economy is roaring (GDP up 4.2% last quarter here.)
God knows what happens in the next recession. But we have kicked the can down the road as far as it will go. When the music stops, and people stop spending on things like iPhones and new cars and buying houses, it will be a real mess. My wine sells for $175 per bottle. Although I am doing well right now, no one needs that when people are in fear of their next paycheck.
Same game, just different terminology
I agree with a lot of what you say
0 -
The ratio is out of sync in large parts of the country - London is obviously the worst example. This is all well and good while interest rates remain low but this is not a given.Rob7Lee said:
I'm sure thats all spot on, but interest now compared to then mean likely very little difference in monthly payment. London is the worst of course, other parts of the country it's probably now considerably less than back in the early/mid 90's as house prices have barely kept up with inflation yet interest rates have plummeted.hoof_it_up_to_benty said:
The ratio was 4.4 in 1995 and 12.2 by 2012 based on the median income and house price in the capital. I think the ratio is now in excess of 15.Rob7Lee said:
Salary ratio v interest rates, think there is very little difference overall compared to when I first bought in the early 90's. 80k house at 10% interest rate v's 450k house at 2% interest rate - not much in it, if anything probably cheaper today.hoof_it_up_to_benty said:The house price to salary ratio in London is completely out of control - I'm assuming foreign money has kept this afloat. I keep waiting for the property crash - maybe rising interest rates will be the trigger once debt can't be serviced.
Will governments be in a position to bail out the banks again when it all comes crashing down?
Savings rates are beginning to tick up, but doubt many accounts will see the full 0.25%
Low interest rates and lack of credit control have led to this anomaly - if interest rates were to rise it would all collapse.
It cannot be seen as a healthy state of affairs.1 -
Is this the same carney who said rthat ON june 24th 2016 said the uk was fucked... Just asking...harveys_gardener said:
Carney is stockpiling amunition to fire at the Brexit shitfest. Most inflation is due to A50 issues and falling pound. A few public employees given half a percent over inflation after 10 years of no rises doesn't equal rampant wage fuelled inflation, but hey my economics A level was only a D. But this was in the days when you didn't get an A for spelling your name right on the exam paper.golfaddick said:
A £175k mortgage will mean about a £25pm increase. Anyone with a £500k mortgage (thus about a £70pm increase) can probably afford it.1905 said:
But the size of some mortgages out there now, it wont take too much to knock some people over ...............Addickted said:I used to be so jealous of my friends working in the banking sector who were only paying 2% interest on their mortgages.
Then we had 'Black Wednesday' when interest rates were hiked up temporarily to 15%.
0.75%? Pah…...
Next increase (again 0.25%) wont be for another year or so.....certainly at least 3 months after Brexit.
you never know, rates might even go back down again if Brexit is a total f**k up.1 -
I've never really understood what the point of Carney is. Paid an extortionate amount of money for doing very little.Chippycafc said:
Is this the same carney who said rthat ON june 24th 2016 said the uk was fucked... Just asking...harveys_gardener said:
Carney is stockpiling amunition to fire at the Brexit shitfest. Most inflation is due to A50 issues and falling pound. A few public employees given half a percent over inflation after 10 years of no rises doesn't equal rampant wage fuelled inflation, but hey my economics A level was only a D. But this was in the days when you didn't get an A for spelling your name right on the exam paper.golfaddick said:
A £175k mortgage will mean about a £25pm increase. Anyone with a £500k mortgage (thus about a £70pm increase) can probably afford it.1905 said:
But the size of some mortgages out there now, it wont take too much to knock some people over ...............Addickted said:I used to be so jealous of my friends working in the banking sector who were only paying 2% interest on their mortgages.
Then we had 'Black Wednesday' when interest rates were hiked up temporarily to 15%.
0.75%? Pah…...
Next increase (again 0.25%) wont be for another year or so.....certainly at least 3 months after Brexit.
you never know, rates might even go back down again if Brexit is a total f**k up.3 -
No. He's saved a fortune by taking drinks machines out of the Bank of England. It's where Duchatelet got the idea from.hoof_it_up_to_benty said:
I've never really understood what the point of Carney is. Paid an extortionate amount of money for doing very little.Chippycafc said:
Is this the same carney who said rthat ON june 24th 2016 said the uk was fucked... Just asking...harveys_gardener said:
Carney is stockpiling amunition to fire at the Brexit shitfest. Most inflation is due to A50 issues and falling pound. A few public employees given half a percent over inflation after 10 years of no rises doesn't equal rampant wage fuelled inflation, but hey my economics A level was only a D. But this was in the days when you didn't get an A for spelling your name right on the exam paper.golfaddick said:
A £175k mortgage will mean about a £25pm increase. Anyone with a £500k mortgage (thus about a £70pm increase) can probably afford it.1905 said:
But the size of some mortgages out there now, it wont take too much to knock some people over ...............Addickted said:I used to be so jealous of my friends working in the banking sector who were only paying 2% interest on their mortgages.
Then we had 'Black Wednesday' when interest rates were hiked up temporarily to 15%.
0.75%? Pah…...
Next increase (again 0.25%) wont be for another year or so.....certainly at least 3 months after Brexit.
you never know, rates might even go back down again if Brexit is a total f**k up.0 -
Sponsored links:
-
Pretty sure all the Project Fear protaganists said we'd be fucked if we leave, not when we voted to leave. Recent economic analysis suggests we are severely damaged economically now, before Brexit, despite Sterling tanking which helps exports, even if we go the Norway route. Did you not read the BoE projections? Or any other opinions apart from the Mail? If May has a better grasp on economics than Carney then sack him.Chippycafc said:
Is this the same carney who said rthat ON june 24th 2016 said the uk was fucked... Just asking...harveys_gardener said:
Carney is stockpiling amunition to fire at the Brexit shitfest. Most inflation is due to A50 issues and falling pound. A few public employees given half a percent over inflation after 10 years of no rises doesn't equal rampant wage fuelled inflation, but hey my economics A level was only a D. But this was in the days when you didn't get an A for spelling your name right on the exam paper.golfaddick said:
A £175k mortgage will mean about a £25pm increase. Anyone with a £500k mortgage (thus about a £70pm increase) can probably afford it.1905 said:
But the size of some mortgages out there now, it wont take too much to knock some people over ...............Addickted said:I used to be so jealous of my friends working in the banking sector who were only paying 2% interest on their mortgages.
Then we had 'Black Wednesday' when interest rates were hiked up temporarily to 15%.
0.75%? Pah…...
Next increase (again 0.25%) wont be for another year or so.....certainly at least 3 months after Brexit.
you never know, rates might even go back down again if Brexit is a total f**k up.
But this is the woman who triggered A50 without a Plan A, B or C nor without the support of her own party. Called an election on her vision and was defeated. Smell the coffee!!!1 -
It does seem bizarre as you say that people are acting as if Brexit has already happened.harveys_gardener said:
Pretty sure all the Project Fear protaganists said we'd be fucked if we leave, not when we voted to leave. Recent economic analysis suggests we are severely damaged economically now, before Brexit, despite Sterling tanking, even if we go the Norway route. Did you not read the BoE projections? Or any other opinions apart from the Mail? If May has a better grasp on economics than Carney then sack him.Chippycafc said:
Is this the same carney who said rthat ON june 24th 2016 said the uk was fucked... Just asking...harveys_gardener said:
Carney is stockpiling amunition to fire at the Brexit shitfest. Most inflation is due to A50 issues and falling pound. A few public employees given half a percent over inflation after 10 years of no rises doesn't equal rampant wage fuelled inflation, but hey my economics A level was only a D. But this was in the days when you didn't get an A for spelling your name right on the exam paper.golfaddick said:
A £175k mortgage will mean about a £25pm increase. Anyone with a £500k mortgage (thus about a £70pm increase) can probably afford it.1905 said:
But the size of some mortgages out there now, it wont take too much to knock some people over ...............Addickted said:I used to be so jealous of my friends working in the banking sector who were only paying 2% interest on their mortgages.
Then we had 'Black Wednesday' when interest rates were hiked up temporarily to 15%.
0.75%? Pah…...
Next increase (again 0.25%) wont be for another year or so.....certainly at least 3 months after Brexit.
you never know, rates might even go back down again if Brexit is a total f**k up.
But this is the woman who triggered A50 without a Plan A, B or C nor without the support of her own party. Called an election on her vision and was defeated. Smell the coffee!!!0 -
Chippycafc said:
Is this the same carney who said rthat ON june 24th 2016 said the uk was fucked... Just asking...harveys_gardener said:
Carney is stockpiling amunition to fire at the Brexit shitfest. Most inflation is due to A50 issues and falling pound. A few public employees given half a percent over inflation after 10 years of no rises doesn't equal rampant wage fuelled inflation, but hey my economics A level was only a D. But this was in the days when you didn't get an A for spelling your name right on the exam paper.golfaddick said:
A £175k mortgage will mean about a £25pm increase. Anyone with a £500k mortgage (thus about a £70pm increase) can probably afford it.1905 said:
But the size of some mortgages out there now, it wont take too much to knock some people over ...............Addickted said:I used to be so jealous of my friends working in the banking sector who were only paying 2% interest on their mortgages.
Then we had 'Black Wednesday' when interest rates were hiked up temporarily to 15%.
0.75%? Pah…...
Next increase (again 0.25%) wont be for another year or so.....certainly at least 3 months after Brexit.
you never know, rates might even go back down again if Brexit is a total f**k up.
The very same. Also the same one that caused the pound issues yesterday based on more gloom messages.Chippycafc said:
Is this the same carney who said rthat ON june 24th 2016 said the uk was fucked... Just asking...harveys_gardener said:
Carney is stockpiling amunition to fire at the Brexit shitfest. Most inflation is due to A50 issues and falling pound. A few public employees given half a percent over inflation after 10 years of no rises doesn't equal rampant wage fuelled inflation, but hey my economics A level was only a D. But this was in the days when you didn't get an A for spelling your name right on the exam paper.golfaddick said:
A £175k mortgage will mean about a £25pm increase. Anyone with a £500k mortgage (thus about a £70pm increase) can probably afford it.1905 said:
But the size of some mortgages out there now, it wont take too much to knock some people over ...............Addickted said:I used to be so jealous of my friends working in the banking sector who were only paying 2% interest on their mortgages.
Then we had 'Black Wednesday' when interest rates were hiked up temporarily to 15%.
0.75%? Pah…...
Next increase (again 0.25%) wont be for another year or so.....certainly at least 3 months after Brexit.
you never know, rates might even go back down again if Brexit is a total f**k up.
I know that many lifers won't believe anything unless it is in the guardian so here's a link:
www.google.co.uk/amp/s/amp.theguardian.com/business/2018/aug/03/mark-carney-says-risk-of-a-no-deal-brexit-is-uncomfortably-high0 -
He’s the financial equivalent of bringing in an expensive foreign football manager like Sven or Capello to manage England...hoof_it_up_to_benty said:
I've never really understood what the point of Carney is. Paid an extortionate amount of money for doing very little.Chippycafc said:
Is this the same carney who said rthat ON june 24th 2016 said the uk was fucked... Just asking...harveys_gardener said:
Carney is stockpiling amunition to fire at the Brexit shitfest. Most inflation is due to A50 issues and falling pound. A few public employees given half a percent over inflation after 10 years of no rises doesn't equal rampant wage fuelled inflation, but hey my economics A level was only a D. But this was in the days when you didn't get an A for spelling your name right on the exam paper.golfaddick said:
A £175k mortgage will mean about a £25pm increase. Anyone with a £500k mortgage (thus about a £70pm increase) can probably afford it.1905 said:
But the size of some mortgages out there now, it wont take too much to knock some people over ...............Addickted said:I used to be so jealous of my friends working in the banking sector who were only paying 2% interest on their mortgages.
Then we had 'Black Wednesday' when interest rates were hiked up temporarily to 15%.
0.75%? Pah…...
Next increase (again 0.25%) wont be for another year or so.....certainly at least 3 months after Brexit.
you never know, rates might even go back down again if Brexit is a total f**k up.1 -
The key to being a central banker is instilling credibility in the institution so markets believe it will act rationally according to its mandate and statements.killerandflash said:
He’s the financial equivalent of bringing in an expensive foreign football manager like Sven or Capello to manage England...hoof_it_up_to_benty said:
I've never really understood what the point of Carney is. Paid an extortionate amount of money for doing very little.Chippycafc said:
Is this the same carney who said rthat ON june 24th 2016 said the uk was fucked... Just asking...harveys_gardener said:
Carney is stockpiling amunition to fire at the Brexit shitfest. Most inflation is due to A50 issues and falling pound. A few public employees given half a percent over inflation after 10 years of no rises doesn't equal rampant wage fuelled inflation, but hey my economics A level was only a D. But this was in the days when you didn't get an A for spelling your name right on the exam paper.golfaddick said:
A £175k mortgage will mean about a £25pm increase. Anyone with a £500k mortgage (thus about a £70pm increase) can probably afford it.1905 said:
But the size of some mortgages out there now, it wont take too much to knock some people over ...............Addickted said:I used to be so jealous of my friends working in the banking sector who were only paying 2% interest on their mortgages.
Then we had 'Black Wednesday' when interest rates were hiked up temporarily to 15%.
0.75%? Pah…...
Next increase (again 0.25%) wont be for another year or so.....certainly at least 3 months after Brexit.
you never know, rates might even go back down again if Brexit is a total f**k up.
On this score he has done well, and the foreign manager analogy is relevant as his credibility is enhanced by what he achieved in Canada.2 -
But it is just one ratio, it needs to be taken into account on the whole affordability of which interest rates play a huge part as very few people buy without a mortgage.hoof_it_up_to_benty said:
The ratio is out of sync in large parts of the country - London is obviously the worst example. This is all well and good while interest rates remain low but this is not a given.Rob7Lee said:
I'm sure thats all spot on, but interest now compared to then mean likely very little difference in monthly payment. London is the worst of course, other parts of the country it's probably now considerably less than back in the early/mid 90's as house prices have barely kept up with inflation yet interest rates have plummeted.hoof_it_up_to_benty said:
The ratio was 4.4 in 1995 and 12.2 by 2012 based on the median income and house price in the capital. I think the ratio is now in excess of 15.Rob7Lee said:
Salary ratio v interest rates, think there is very little difference overall compared to when I first bought in the early 90's. 80k house at 10% interest rate v's 450k house at 2% interest rate - not much in it, if anything probably cheaper today.hoof_it_up_to_benty said:The house price to salary ratio in London is completely out of control - I'm assuming foreign money has kept this afloat. I keep waiting for the property crash - maybe rising interest rates will be the trigger once debt can't be serviced.
Will governments be in a position to bail out the banks again when it all comes crashing down?
Savings rates are beginning to tick up, but doubt many accounts will see the full 0.25%
Low interest rates and lack of credit control have led to this anomaly - if interest rates were to rise it would all collapse.
It cannot be seen as a healthy state of affairs.
The interest payments today on my first house and cheaper than when I bought it in the early 90's even though the house price is 5x more. Once you take into account wage inflation it's considerably cheaper.
Interest rates may continue to rise but likely house prices will reduce accordingly, the overall cost is unlikely to change much so anyone hanging around to wait on prices reducing the only likely benefit will be a lower deposit is needed, the monthly costs won't shift much in my view. Of course it will effect those who bought at the height of prices and the lowest of interest rates, if I were in that boat right now and concerned i'd be taking a 10 year fix which amazingly are still around 2.5%. Money is still cheap to borrow so lock in whilst you can at these type of rates.
In fact right now you can get a better rate of interest on a 5 year savings account than a 10 year mortgage. Almost worth me borrowing again!
0 -
I think bankers get away with murder - they believe their own hype.newyorkaddick said:
The key to being a central banker is instilling credibility in the institution so markets believe it will act rationally according to its mandate and statements.killerandflash said:
He’s the financial equivalent of bringing in an expensive foreign football manager like Sven or Capello to manage England...hoof_it_up_to_benty said:
I've never really understood what the point of Carney is. Paid an extortionate amount of money for doing very little.Chippycafc said:
Is this the same carney who said rthat ON june 24th 2016 said the uk was fucked... Just asking...harveys_gardener said:
Carney is stockpiling amunition to fire at the Brexit shitfest. Most inflation is due to A50 issues and falling pound. A few public employees given half a percent over inflation after 10 years of no rises doesn't equal rampant wage fuelled inflation, but hey my economics A level was only a D. But this was in the days when you didn't get an A for spelling your name right on the exam paper.golfaddick said:
A £175k mortgage will mean about a £25pm increase. Anyone with a £500k mortgage (thus about a £70pm increase) can probably afford it.1905 said:
But the size of some mortgages out there now, it wont take too much to knock some people over ...............Addickted said:I used to be so jealous of my friends working in the banking sector who were only paying 2% interest on their mortgages.
Then we had 'Black Wednesday' when interest rates were hiked up temporarily to 15%.
0.75%? Pah…...
Next increase (again 0.25%) wont be for another year or so.....certainly at least 3 months after Brexit.
you never know, rates might even go back down again if Brexit is a total f**k up.
On this score he has done well, and the foreign manager analogy is relevant as his credibility is enhanced by what he achieved in Canada.0 -
But what happens when an event causes rates to increase? And people now will be paying back mortgages for far longer. Well into retirement? Who benefits - developers and banks.Rob7Lee said:
I'm sure thats all spot on, but interest now compared to then mean likely very little difference in monthly payment. London is the worst of course, other parts of the country it's probably now considerably less than back in the early/mid 90's as house prices have barely kept up with inflation yet interest rates have plummeted.hoof_it_up_to_benty said:
The ratio was 4.4 in 1995 and 12.2 by 2012 based on the median income and house price in the capital. I think the ratio is now in excess of 15.Rob7Lee said:
Salary ratio v interest rates, think there is very little difference overall compared to when I first bought in the early 90's. 80k house at 10% interest rate v's 450k house at 2% interest rate - not much in it, if anything probably cheaper today.hoof_it_up_to_benty said:The house price to salary ratio in London is completely out of control - I'm assuming foreign money has kept this afloat. I keep waiting for the property crash - maybe rising interest rates will be the trigger once debt can't be serviced.
Will governments be in a position to bail out the banks again when it all comes crashing down?
Savings rates are beginning to tick up, but doubt many accounts will see the full 0.25%
Low interest rates and lack of credit control have led to this anomaly - if interest rates were to rise it would all collapse.
Prices way too high and well out of whack with wages.1 -
Many of them certainly did after the credit crunch banking fiasco.hoof_it_up_to_benty said:
I think bankers get away with murder - they believe their own hype.newyorkaddick said:
The key to being a central banker is instilling credibility in the institution so markets believe it will act rationally according to its mandate and statements.killerandflash said:
He’s the financial equivalent of bringing in an expensive foreign football manager like Sven or Capello to manage England...hoof_it_up_to_benty said:
I've never really understood what the point of Carney is. Paid an extortionate amount of money for doing very little.Chippycafc said:
Is this the same carney who said rthat ON june 24th 2016 said the uk was fucked... Just asking...harveys_gardener said:
Carney is stockpiling amunition to fire at the Brexit shitfest. Most inflation is due to A50 issues and falling pound. A few public employees given half a percent over inflation after 10 years of no rises doesn't equal rampant wage fuelled inflation, but hey my economics A level was only a D. But this was in the days when you didn't get an A for spelling your name right on the exam paper.golfaddick said:
A £175k mortgage will mean about a £25pm increase. Anyone with a £500k mortgage (thus about a £70pm increase) can probably afford it.1905 said:
But the size of some mortgages out there now, it wont take too much to knock some people over ...............Addickted said:I used to be so jealous of my friends working in the banking sector who were only paying 2% interest on their mortgages.
Then we had 'Black Wednesday' when interest rates were hiked up temporarily to 15%.
0.75%? Pah…...
Next increase (again 0.25%) wont be for another year or so.....certainly at least 3 months after Brexit.
you never know, rates might even go back down again if Brexit is a total f**k up.
On this score he has done well, and the foreign manager analogy is relevant as his credibility is enhanced by what he achieved in Canada.
0 -
The entire credit and debt system is designed to lure people into financial commitments.SF-02 said:
But what happens when an event causes rates to increase? And people now will be paying back mortgages for far longer. Well into retirement? Who benefits - developers and banks.Rob7Lee said:
I'm sure thats all spot on, but interest now compared to then mean likely very little difference in monthly payment. London is the worst of course, other parts of the country it's probably now considerably less than back in the early/mid 90's as house prices have barely kept up with inflation yet interest rates have plummeted.hoof_it_up_to_benty said:
The ratio was 4.4 in 1995 and 12.2 by 2012 based on the median income and house price in the capital. I think the ratio is now in excess of 15.Rob7Lee said:
Salary ratio v interest rates, think there is very little difference overall compared to when I first bought in the early 90's. 80k house at 10% interest rate v's 450k house at 2% interest rate - not much in it, if anything probably cheaper today.hoof_it_up_to_benty said:The house price to salary ratio in London is completely out of control - I'm assuming foreign money has kept this afloat. I keep waiting for the property crash - maybe rising interest rates will be the trigger once debt can't be serviced.
Will governments be in a position to bail out the banks again when it all comes crashing down?
Savings rates are beginning to tick up, but doubt many accounts will see the full 0.25%
Low interest rates and lack of credit control have led to this anomaly - if interest rates were to rise it would all collapse.
Prices way too high and well out of whack with wages.
People are seduced by media and peer pressure - and want property, holidays, consumer goods and services.
And they don't pay with cash .... they borrow on credit.
It's a monthly cash cow for the lenders ...... and you, me and a huge percentage of other borrowers are milked in order that the money lenders prosper.
Ker-ching!0
