Why is the UK property market fake?


No more corset controls on the banks since 1979/80. Goodhart pre-empted it.

Now they loan to things that don’t boost GDP including mortgages.

It’s included in debt to GDP though.

Boosted in addition to the retarded notion of a crumbling hovel being a “retirement” fund.

Funds and other assets don’t depreciate.

Don’t bail out bad property investors, they’re idiots.

You wanted the reward, the risk is also ALL yours.

The ‘competition and credit control’ reforms, which removed direct controls on bank
lending, had been introduced in September 1971 and a dramatic surge in bank
intermediation, leading to broad money growth rates in excess of 25%, had resulted in
1972 and 1973. The conclusion drawn by policy makers in 1973 was that the only
option was to supplement monetary targets with direct controls on banks through
Supplementary Special Deposits known as ‘the Corset’ (See Zawadzki, 1981).
Modest interest rate changes seemed powerless in the face of this monetary expansion
and the previously stable money demand function seemed to have broken down. This
was clear well before 1975, but Goodhart (1975b) was a summary of the current
problems of monetary management, as the title suggests.

So Labour want rent controls but not bank controls.

I wonder (((why))).

Goodhart’s Law is the statement missing from the square brackets in the quotation
above. It says: “Ignoring Goodhart’s law, that any observed statistical regularity
will tend to collapse once pressure is placed upon it for control purposes”.

“Houses as Collateral”
“First were the removal of exchange controls in 1979 and the direct control of bank lending (“the corset”) in 1980″

“The abolition of exchange controls in 1979 and the abolition of the last of the quantitative controls on bank lending heralded a period of rapid deregulation and increased competition in British banking during the 1980s”

They weren’t more productive in the 80s, they stole from the future (you).

1. Be civil. 2. Be logical or fair. 3. Do not bore me.

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s