Disliked13:06 02Sep08 IDEA-ANALYSIS: (GBP) UK: Housing Market Rescue Package Due Today?
(GBP) So, PM Brown as part of his political fight back, is reportedly set to
announce a GBP multi-million UK housing market rescue package tomorrow, withadditional measures set to be announced later this week or early next, and moreinitiatives to be tabled at the time of the autumn pre-budget report (PBR). Theinitial impact on GBP should be +ve, albeit temporary, (depending on the sizeof the package), as a govt spending boost should be supportive for the economy,and the possible consequential delay in BoE monetary policy easing should keepUK interest rate differentials favourable.
The measures are said to likely include making more funds available to local
authorities to help first time buyers (FTBs) on to the first rung of the property ladder, with councils able to buy up repossessed homes and unsold
properties from which they can provide social housing. They will also be able
to offer struggling borrowers financial assistance in return for part ownership
in their homes or outright ownership if necessary. It is unclear whether or not
a stamp duty suspension/holiday will be announced, although it is being considered. Other measures that are thought to be under consideration includedoubling the allowance for cash ISAs to GBP7200 for those saving up for a home,as well as the possible creation of a new regular tax efficient savings scheme for FTBs. Following on from today's likely announcement, another package is expected to be announced either later this week or early next week, with initiatives aimed at assisting low income households facing increased hardship as a result of higher domestic fuel bills. The aim is to assist those households in particular that spend above 10% of their disposable income on energy bills.
In terms of the wholesale mortgage market, further measures to reignite
activity there will probably be deferred to the time of the Pre-Budget Report
(PBR) in the autumn, after agreement between the BoE and the govt. Indeed the Sunday Times already indicates that the BoE is preparing to extend its SLS specifically for building societies that are currently setting up covered bond vehicles. However HMT is said to be averse to direct govt intervention into the mortgage market and the BoE has made it clear it is not keen on extending the SLS to take in new mortgage backed securities issued after 2007.
It is any one's guess how much the initial proposals are to cost the tax payer, (in top of the GBP2.7bn of tax cuts that the govt will already spend subbing those households that have been hard done by by the removal of the 10p tax band). But there is talk that a windfall tax on the super normal profits of energy companies (favoured by Labour MPs) could be announced to help finance some of the potential increased spending that would come about as a result of the economic rescue package. For a fiscal package to have a significant impact, and perhaps help arrest the slide in the govt's public opinion ratings, the size should probably be no less than 1%-1.5% of GDP. The govt can't really afford this without further undermining its own ability to meet its self-imposed fiscal rules. The BoE for its part will want to see how much any fiscal package adds to GDP growth, as the size of the impending measures could have a bearing on the timing of the resumption of the BoE's monetary policy easing cycle. The PSNB budget deficits for FY2008/2009 and FY2009/2010 are set to turn out perceptibly higher than the respective 2.9% and 2.5% of GDP ratios than the govt currently projects.Ignored
Auslanco - GBP/JPY and GBP/USD (newstrade)
- #109,686
- Sep 1, 2008 11:41pm Sep 1, 2008 11:41pm
- Joined Apr 2007 | Status: HARD SHYT SCUBA TRADER | 20,886 Posts
this channel on a 10 min is looking like a great set up ....
go long 193.80 break out
short 193.5
almost to easy ...mmmmmmmmm
it may be used as a trap ... I use 10 min chart and wait for break out candle to end
it really was that easy ......guess they think everyone is thinking short .... 194.309 target
Blogging daily now at www.volume.zone
- #109,691
- Sep 2, 2008 12:21am Sep 2, 2008 12:21am
- | Joined Jun 2008 | Status: Professional Frontrunning Troll | 2,312 Posts
look at that nikkei dump. Mathematicians would call that shape a hyperbola. 
- #109,692
- Sep 2, 2008 12:23am Sep 2, 2008 12:23am
- Joined Apr 2007 | Status: HARD SHYT SCUBA TRADER | 20,886 Posts
Blogging daily now at www.volume.zone
- #109,694
- Sep 2, 2008 2:02am Sep 2, 2008 2:02am
- Joined May 2008 | Status: has long shorts | 2,584 Posts
theres no reason to think bullish yet. can change suddenly of course 
markets tell that theres no demand except short markups to keep adding to the shorts. imho 194.20 is gone for the next time.
my target of 193 was reached. breaking 192.40 which is definitely loaded of stops, this thing could head to 189 soon.
as long as news don't get extremely worse news for gbp near the current lows with a last move further down on the newsday to close on the highs, you shouldn't expect any upmove. even tough, there won't be an upmove with good till neutral news for gbp like there were yesterday. this is just a continuation sign.
"hey good news, reversal sign" and the guys which earn the money can heavily short into the uninformed herd buying without pushing price down too early against their shorting.
markets tell that theres no demand except short markups to keep adding to the shorts. imho 194.20 is gone for the next time.
my target of 193 was reached. breaking 192.40 which is definitely loaded of stops, this thing could head to 189 soon.
as long as news don't get extremely worse news for gbp near the current lows with a last move further down on the newsday to close on the highs, you shouldn't expect any upmove. even tough, there won't be an upmove with good till neutral news for gbp like there were yesterday. this is just a continuation sign.
"hey good news, reversal sign" and the guys which earn the money can heavily short into the uninformed herd buying without pushing price down too early against their shorting.
- #109,696
- Sep 2, 2008 2:12am Sep 2, 2008 2:12am
- Joined Apr 2008 | Status: Trader | 7,674 Posts
theres no reason to think bullish yet. can change suddenly of course
markets tell that theres no demand except short markups to keep adding to the shorts. imho 194.20 is gone for the next time.
my target of 193 was reached. breaking 192.40 which is definitely loaded of stops, this thing could head to 189 soon.
as long as news don't get extremely worse news for gbp near the current lows with a last move further down on the newsday to close on the highs, you shouldn't expect any upmove. even tough, there won't be an upmove with good till neutral news for gbp like there were yesterday. this is just a continuation sign.
"hey good news, reversal sign" and the guys which earn the money can heavily short into the uninformed herd buying without pushing price down too early against their shorting.
- #109,697
- Edited 2:43am Sep 2, 2008 2:29am | Edited 2:43am
- Joined May 2008 | Status: has long shorts | 2,584 Posts
no, not first try, but gj is reluctant to bounce off of heavy support areas currently, also dont paying much attention to uy.
gj just retraces as much as needed to gain enough space for another wide spread bar runup towards the support levels ^
197 was some demand coming in- straight the way supply pushed it down. weakness following.
195.50 area no demand to higher prices. drop.
195 also no interest in higher prices. drop + weakness appearing.
194.70 -.40 still no demand for higher prices.
yesterday closed extremely bearish with vol. just like it should be.
there's still much supply left in the markets which would brake an upmove and costs money to remove regularly.
also on better news for gbp.
in my post above i was referring to 194.70 area not 194.20. mistake...
gj dropped out of the 240 channel so we should assume heavily oversold, with rsi flat flowing under the 20 which adds to the weakness. i don't assume any bigger upmoves till we see worse gbp news/numbers.
imho all we currently may see are some minor retracements. i still see no signs for a retracement to at least 23.6 -198.07 and therefore my bias still remains antibullish and with those signs, if they do not change, 190 this week.
but prepare for bad news near the lows as sign for a reversal, followed by congestion! after this bear market there will be a nice bullmarket guaranteed.
fanny mae share will perhaps soon show how it is done
perhaps ny open will change it + i'm looking forward to see which story they try to tell us today with gbp numbers.
gj just retraces as much as needed to gain enough space for another wide spread bar runup towards the support levels ^
197 was some demand coming in- straight the way supply pushed it down. weakness following.
195.50 area no demand to higher prices. drop.
195 also no interest in higher prices. drop + weakness appearing.
194.70 -.40 still no demand for higher prices.
yesterday closed extremely bearish with vol. just like it should be.
there's still much supply left in the markets which would brake an upmove and costs money to remove regularly.
also on better news for gbp.
in my post above i was referring to 194.70 area not 194.20. mistake...
gj dropped out of the 240 channel so we should assume heavily oversold, with rsi flat flowing under the 20 which adds to the weakness. i don't assume any bigger upmoves till we see worse gbp news/numbers.
imho all we currently may see are some minor retracements. i still see no signs for a retracement to at least 23.6 -198.07 and therefore my bias still remains antibullish and with those signs, if they do not change, 190 this week.
but prepare for bad news near the lows as sign for a reversal, followed by congestion! after this bear market there will be a nice bullmarket guaranteed.
fanny mae share will perhaps soon show how it is done
perhaps ny open will change it + i'm looking forward to see which story they try to tell us today with gbp numbers.
- #109,699
- Sep 2, 2008 3:09am Sep 2, 2008 3:09am
No, we should really test the 07 high first
Just an info and not a reco!
- #109,700
- Edited 3:18am Sep 2, 2008 3:15am | Edited 3:18am
- Joined May 2008 | Status: has long shorts | 2,584 Posts
Are you referring to 207? M sorry my friend to disappoint you early but it will not happen this week or even this month once again sell on rallies and you'll never go wrong targeting 191.70 (Jan 05 low)!
Just an info and not a reco!