Meralti Posted December 14, 2010 Report Share Posted December 14, 2010 Thanks, this is a great chart. It is interesting to look at the last 3 peaks and the periods of falls that followed. These falls were arrested by sharp upturns in the YoY figures that mark local minima. These minima correspond almost exactly to significant policy changes by the then government. The one in the summer of 2005 was when Brown/King first cut rates by, if I remember correctly about half, stimulating the lending boom even further. The second to the BoE ZIRP and QE. Using the 1st derivative shows this very clearly. The gradient of the 3 periods of falls look very similar and are pretty much a straight line (constant rate of falls). This ties in nicely with my original point. The government could act, as Brown and Darling did, and throw everything at it a second time. Over the next few months, as house prices continue to drift down we should be asking ourselves the following questions: 1. What can the government do to prevent the second down leg? 2. What are they doing now, or have already done to prevent it? Unless the answers to these two questions are broadly the same then the government is not genuinely acting to support prices and the falls will increase. The trend looks firmly established now, with IMO only a significant policy act able to stop it. Does anyone on here have any insight into whether this will occur. Without evidence to the contrary I thinking it won't. Thanks again for making this so 'graphically' obvious. Link to comment Share on other sites More sharing options...
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