tag:blogger.com,1999:blog-2249851329008146395.post7178829714662683581..comments2023-10-30T09:11:12.922-07:00Comments on Clouded Outlook: Mortgage rates up; house prices downAlice Cookhttp://www.blogger.com/profile/05753570123987780947noreply@blogger.comBlogger7125tag:blogger.com,1999:blog-2249851329008146395.post-33152783971074924582008-08-18T08:31:00.000-07:002008-08-18T08:31:00.000-07:00I'm not "daft enough" to call for a ...I'm not "daft enough" to call for a rate cut. However the reasoning for one is not so much any hope that it'll lower mortgage rates so much as it'll steepen the yield curve and allow banks to refinance their own long-term debt a little while longer, in the hope of putting off an eventual systemic collapse.<br><br>I say let 'em burn, but the reasons behind a rate cut are sensible if you are pro-bank.<br><br>NickAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-2249851329008146395.post-2803389404863421112008-08-18T08:44:00.000-07:002008-08-18T08:44:00.000-07:00Nick,There are others besides banks looking for ra...Nick,<br><br>There are others besides banks looking for rate cuts.vodka drinkernoreply@blogger.comtag:blogger.com,1999:blog-2249851329008146395.post-33281821752111589472008-08-18T09:24:00.000-07:002008-08-18T09:24:00.000-07:00How does this fit with the 'rapid growth in th...How does this fit with the 'rapid growth in the money supply' thesis?Woody Finchhttp://www.blogger.com/profile/00158968392312442567noreply@blogger.comtag:blogger.com,1999:blog-2249851329008146395.post-45875517857591290912008-08-18T09:58:00.000-07:002008-08-18T09:58:00.000-07:00vodka drinker,Could you be more specific?Nickvodka drinker,<br><br>Could you be more specific?<br><br>NickAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-2249851329008146395.post-20430623930211002942008-08-18T10:19:00.000-07:002008-08-18T10:19:00.000-07:00Woody,A fair question. The current monetary data s...Woody,<br><br>A fair question. The current monetary data shows continued rapid growth, as does the data from 12-18 months ago. Therefore, there is a lot of money out there, both causing today's inflation and will continue to do so for the foreseeable future. <br><br>The decline in bank availability is really about coming from a very high level of growth to a more moderate level of growth. In any event, the past shows that bank credit can fall quite a bit and still have inflation.<br><br>I can foresee a situation, where we have weak bank balance sheets being pumped out by central bank credit, which would support rising wage expectations, banks "rolling over" dead loans, growth slowing and living standards collapsing.<br><br>For me, the great fallacy of today is that we can't have inflation if there is banking crisis and a recession.<br><br>Wrong, wrong, wrong. The past tells us other wise (for example the 1974 banking crash here in the UK).<br><br>Alicealice cookhttp://angryalice.blogspot.comnoreply@blogger.comtag:blogger.com,1999:blog-2249851329008146395.post-50555740779451277092008-08-19T05:04:00.000-07:002008-08-19T05:04:00.000-07:00NIck: but that would be bailing out careless banke...NIck: but that would be bailing out careless bankers at public expense, as BofE profits not held on to for the reserves pass to the Treasury. If their collapse is certain, why not nationalise the casualties now? B. in C.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2249851329008146395.post-73036119140123439842008-08-19T06:02:00.000-07:002008-08-19T06:02:00.000-07:00That's why I wrote " if you are pro-bank....That's why I wrote " if you are pro-bank."<br><br>I'm not pro bank. Let them burn.<br><br>NickAnonymousnoreply@blogger.com