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Thread: So when will Blair step down?

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    So when will Blair step down?

    Everything I'm reading about Blair's recent victory is dominated by speculation regarding how long before he turns the reins over to Brown. He does face what looks like a divided government with a small majority. Politicians always being ready to trade loyalty and soul for the right deal, are their any educated guesses out there?
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    The best time I reckon would be after we have the referendum on the EU constitution. If we lose it, Blair can then do the "honourable falling upon ones sword" exercise and if we win it, Blair can claim his work is done and it's time to move on. I can't think of any other point where he could go gracefully regardless of outcome.
    Accurate and within-context quote censored by the admin.

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    The election has been a massive XXXX to Blair's authority, but he is most unlikely to step down until he has some claim to "mission accomplished". As Clive says, this is most likely to be after the EU Referendum - whatever the result. (Spin will be applied if the result goes the "wrong way").

    One or two domestic issues could provide the proverbial banana skins: e.g. his proposals on ID cards and the job cuts (if they materialise) in the public sector. But I think if he slips up on them, he'll pick himself up and carry on.

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    After winning he did state that if people thought he was going to step down in a few months after going through four weeks of hell, they were fools. He doesn't have any economic issues to face, which tells me the political infighting will become vicious.
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    If you think there're no economic issues you have another thing coming. The economy is about to nosedive, in no small part due to house prices. High street spending is falling.

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    Quote Originally Posted by Jo Bennett
    If you think there're no economic issues you have another thing coming. The economy is about to nosedive, in no small part due to house prices. High street spending is falling.
    I wasn't aware of a nosedive. While a bearish trend has been forecast due to decreased manufacturing production, I hear little about real estate, what sounds like residential real estate in your post. Even though your interest rates have crept up, have mortgages reached a point where loan qualification has become a problem?
    These are my principles. If you don't like them I have others. ~Groucho Marx~

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    Quote Originally Posted by georged
    I wasn't aware of a nosedive. While a bearish trend has been forecast due to decreased manufacturing production, I hear little about real estate, what sounds like residential real estate in your post. Even though your interest rates have crept up, have mortgages reached a point where loan qualification has become a problem?

    A nosedive is only predicted - based largely on the supposition that consumers have overstretched themselves by piling up debts which have been sourced by extracting "equity" from the rising value of houses. Many have already spent the cash raised on the augmented value of their real estate, and a slow down in consumer spending could be on the cards. Should interest rates rise sharply or unemployment increase, a lot of people with colossal mortgages are going to find themselves in difficulty.

    Meantime, manufacturing jobs are being lost and the numbers employed in the public sector has risen alarmingly. How long it will be before the chickens are banging on the door of the rooster house is not something which was addressed by Mr Brown and Mr Blair at the general election.

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    Quote Originally Posted by Alan Ryan
    A nosedive is only predicted - based largely on the supposition that consumers have overstretched themselves largely by piling up debts which have been sourced by extracting "equity" from the rising value of houses. Many have already spent the cash raised on the augmented value of their real estate, and a slow down in consumer spending could be on the cards. Should interest rates rise sharply or unemployment increase, a lot of people with colossal mortgages are going to find themselves in difficulty.

    Meantime, manufacturing jobs are being lost and the numbers employed in the public sector has risen alarmingly. How long it will be before the chickens are banging on the door of the rooster house is not something which was addressed by Mr Brown and Mr Blair at the general election.
    Sounds about like the US. Once residential mortgage rates started creeping up and reducing potential qualifiers based on payment to income ratios, that industry countered with interest only loans, often exceeding appraised property value, but encompassing a larger market with lower incomes.

    US government employment numbers are now equal with private manufacturing and construction, something I consider very alarming, but unlike the UK, we're stuck with current policies for a few more years.

    Sounds like more than a couple of maturing societies are sitting on ticking economic time bombs. Blair may well be happy to eventually turn things over to Brown with opportune timing.
    These are my principles. If you don't like them I have others. ~Groucho Marx~

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    Banks have been lending on 5 times salary for mortgages, when 3 is the sensible limit. The size of mortgages is such that even a small rate change will push many over the limit of affordability. Consumer spending is already falling.

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    Quote Originally Posted by Jo Bennett
    Banks have been lending on 5 times salary for mortgages, when 3 is the sensible limit. The size of mortgages is such that even a small rate change will push many over the limit of affordability. Consumer spending is already falling.
    Are UK mortgages packaged and peddled as securities as in the US? If so, is that (those) a government or quasi-government agency(s)? I ask to see where the eventual fallout will take place. The UK is much like the US in that when consumers default there's always a substantial amount of private money waiting for those adjustments to buy at the bottom for future resale. If they are in fact packaged, the security holders will have to write down their investments and defaults by the end of their fiscal year, normally determining the length of that cycle. We follow many of your economic cycles but I've never watched your residential real estate market. Brown would have a tough time pulling that one out of the fire.
    These are my principles. If you don't like them I have others. ~Groucho Marx~

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    Quote Originally Posted by georged
    Sounds about like the US. Once residential mortgage rates started creeping up and reducing potential qualifiers based on payment to income ratios, that industry countered with interest only loans, often exceeding appraised property value, but encompassing a larger market with lower incomes.

    US government employment numbers are now equal with private manufacturing and construction, something I consider very alarming, but unlike the UK, we're stuck with current policies for a few more years.

    Sounds like more than a couple of maturing societies are sitting on ticking economic time bombs. Blair may well be happy to eventually turn things over to Brown with opportune timing.
    Precisely: a huge number of people have mortgaged up to (and over) the hilt - on the absurd assumption that historically low rates of interest are here to stay. Loan companies have been operating by snatching business from their rivals with lures of "bonuses" for people who will switch their debts to them. Sometimes these bonuses take the form of a reduced interest rate for a specified period.

    The increase in government employees is not seen (as it should be) as a factor in reducing the numbers in (private) manufacturing jobs.

    When the chickens are pecking at the door of 10 Downing Street, perhaps Tony will send for Brown to inform him that he has been promoted !

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    Quote Originally Posted by Alan Ryan
    Precisely: a huge number of people have mortgaged up to (and over) the hilt - on the absurd assumption that historically low rates of interest are here to stay. Loan companies have been operating by snatching business from their rivals with lures of "bonuses" for people who will switch their debts to them. Sometimes these bonuses take the form of a reduced interest rate for a specified period.

    The increase in government employees is not seen (as it should be) as a factor in reducing the numbers in (private) manufacturing jobs.

    When the chickens are pecking at the door of 10 Downing Street, perhaps Tony will send for Brown to inform him that he has been promoted !
    We all know there's no free lunch, so they're probably tacking the 'bonus' on the back end. Americans are just as dumb when they think they're getting something for nothing, and they also believe low interest rates are here to stay. Our problem with that cyclical market doing a big adjustment will be inflation with no demand for private capital, so with no competition the government will keep expanding public debt. What will happen with yours?

    Blair's actually in a good position to bow out as soon as possible. He got the record wins, had a mostly strong economy and only the Iraq blemish for history books. But I believe he came from a somewhat simple background and as a politician will probably be unable to separate himself from the grandeur.
    Is he known for other strong interests or has the office consumed him?
    These are my principles. If you don't like them I have others. ~Groucho Marx~

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    Quote Originally Posted by georged
    Are UK mortgages packaged and peddled as securities as in the US? If so, is that (those) a government or quasi-government agency(s)? I ask to see where the eventual fallout will take place. The UK is much like the US in that when consumers default there's always a substantial amount of private money waiting for those adjustments to buy at the bottom for future resale. If they are in fact packaged, the security holders will have to write down their investments and defaults by the end of their fiscal year, normally determining the length of that cycle. We follow many of your economic cycles but I've never watched your residential real estate market. Brown would have a tough time pulling that one out of the fire.
    I had an interesting discussion withthe president of a banking chain this morning who is a friend of my father. He said that internal predictions regarding forclosures put worst case scenario at around 47% of currently held mortgages over the next two years. Best case is 35%, with most probably somewhere in there, though he was unwilling to really speculate isnce it depends largely on the intelligence of the american consumer, and you will constantly screw yourself betting on that.

    He also said that despite the fact that even the fed has predicted 4.5% base rate by the end of the year, their most popular mortgages are still adjustable rate, and generally 100% financing. He also claims that the interest only mortgaes are taking a big bite out of their business, and nearly all of those are adjustable rate.

    What a bunch of XXXXXX we have running around out there.
    If ye love wealth greater than liberty, the tranquility of servitude greater than the animating contest for freedom, go home from us in peace. We seek not your counsel, nor your arms. Crouch down and lick the hand that feeds you; May your chains set lightly upon you, and may posterity forget that ye were our countrymen. —Samuel Adams

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    Quote Originally Posted by daewoo
    I had an interesting discussion withthe president of a banking chain this morning who is a friend of my father. He said that internal predictions regarding forclosures put worst case scenario at around 47% of currently held mortgages over the next two years. Best case is 35%, with most probably somewhere in there, though he was unwilling to really speculate isnce it depends largely on the intelligence of the american consumer, and you will constantly screw yourself betting on that.

    He also said that despite the fact that even the fed has predicted 4.5% base rate by the end of the year, their most popular mortgages are still adjustable rate, and generally 100% financing. He also claims that the interest only mortgaes are taking a big bite out of their business, and nearly all of those are adjustable rate.

    What a bunch of XXXXXX we have running around out there.
    I think idiot is a very kind definition. I don't give the general public that much credit.

    Since most US residential mortgages don't even have the ink dry before they're discounted to one of our accounting scandal-ridden quasi-government packagers, the national deficit will take another giant leap forward for mankind when that market adjusts itself. That's why I was curious about what sort of flak Blair/Gordon would face when the UK market inevitably goes through adjustment.
    These are my principles. If you don't like them I have others. ~Groucho Marx~

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    Quote Originally Posted by georged
    We all know there's no free lunch, so they're probably tacking the 'bonus' on the back end. Americans are just as dumb when they think they're getting something for nothing, and they also believe low interest rates are here to stay. Our problem with that cyclical market doing a big adjustment will be inflation with no demand for private capital, so with no competition the government will keep expanding public debt. What will happen with yours?

    Blair's actually in a good position to bow out as soon as possible. He got the record wins, had a mostly strong economy and only the Iraq blemish for history books. But I believe he came from a somewhat simple background and as a politician will probably be unable to separate himself from the grandeur.
    Is he known for other strong interests or has the office consumed him?
    Yes, the "bonus" is of course another advance tacked on the back end. In order for the increase in repayments for this larger mortgage to be kept at a "modest" level, sometimes a rescheduling of the loan over a longer period is negotiated - say from 30 to 35 years or more. Soon, we shall have what might be called the "Sing Sing" mortgage - i.e. one that lasts for 99 years and which you arrange, but which your grandchildren pay off.

    The rise in the number of public servants over the last five years has been incredible: 1 million manufacturing jobs lost, 750,000 extra people on the government payroll during the same period. Public borrowing has also grown to finance Brown's "investment" in public services. Money has been bucketed into the Health Service: an analogy of Mr Brown to Mickey Mouse as the sorcerer's apprentice comes to mind here.

    Nobody seems to worry much about all this - as though government debts never really have to be repaid (at least not in "our time"). Taxes will have to rise in order to pay for this public service bonanza: I predict that VAT (a sales tax on goods and services) will rise from 17.5% to 20% and other "stealth" taxes will have to be confiscated from the apathetic multitudes.

    Blair will skate over this thin ice; he has an ineffable lightness of being. But will Gordon fall in when he takes over ? Probably.

    P.S. Is your contempt for "short-termism" and steady focus on the long term consequences of any economic policy, evidence that I'm reporting my (amateur) economic views to the ghost of Ludwig von Mises ?

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