Is the U.K. in a Housing Bubble?

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Sept. 11 (Bloomberg) -- Barclays Plc Chief Executive Officer Antony Jenkins said Britain runs the risk of a property boom as the economy starts to recover. Matt Miller reports in today's "Global Outlook" on Bloomberg Television's "Street Smart." (Source: Bloomberg)

The ceo of barclays as a warning about the struggling british economy.

Matt miller has the story.

I thought we were out of the financial crisis.

Maybe not so much in the u.k.. it is kind of the opposite problem of sluggishness.

The berkeley ceo, anthony jenkins, says the british economy faces and new risks just as gdp growth stretches up to reach just barely 1.5%. england never saw a crash and property crisis -- prices as we did here, at least not in the southeast, and now the average house price in london is over 900,000 british pounds, about $1.4 million and change.

The chancellor of the exchequer, george osborne, is pushing a help-to-five program, as they call it, providing interest-free loans to buyers of new properties and will give bank guarantees on mortgages for purchases of new and existing homes and will allow people to buy houses for as little as 5%. mortgage rates in india -- england are fairly similar to hear.

They are down about 4%. refinancing, about 2.5%. the business secretary there called on the government to review the second part of the help-to-by program.

He said policy need to avoid new housing bubble.

It is interesting.

It is almost as though they have the opposite problem, kind of like china, where the housing market might be doing too well.

) they only have -- right, but they only have 1.5% gdp growth.

It does not justify it.

$1.4 million?

That is similar to the average two-bedroom apartment in new york.

As crazy as that sounds.

Crazy as that sounds, and the problem they have been a huge swath of southeast england, is the same problem we have in manhattan, there is no room to build more houses, street go vertical.

-- unless you go vertical.

At the reason they did not have -- the reason they did not have the same kind of crash we did in 2009. now they are concerned that attempts to revive the economy might cause a bubble.

Debolt for the ceo of the bank -- pretty bold for the ceo of the bank.

He is in a prime position to do something about it.

He could raise interest rates.

But then he would not make quarterly earnings and he would be out of a job.


Tough decision.

Netflix hitting an all-time high, trading above $300 for the first time ever.

Time to double down, or do you get out while it is good question mark we have today's lay in the triple threat.

? green is the new black and netflix.

The stock hit a new all-time high with a blowout deal with virgin media cable.

In a first for the company, the netflix product is being integrated by a major pay-tv provider.

If you have virgin media in the u.k., you can watch netflix by changing the channel.

Not everybody thinks the deal has staying power.

Cpi g richard greenfield downgraded the stock.

We have julie hyman on the story.

Is this deal being viewed as a game changer for the company?

It is being viewed as something that is significant because of the symbolism.

Essentially, virgin media eating together with netflix, it -- getting together with netflix, it is acknowledgment that virgin media customers want access to netflix, so rather than having adversarial relationship that has been characteristic of what we see between netflix and cable companies, virgin media is turning to a more collaborative relationship.

What is interesting here among the other features of how this works, it works through virgin media.

They can access virgin media through tivo boxes.

When customers do a search for content, it will include netflix content as well, so any movie netflix has, any actor in those movies will be accessible.

Michael, let me go over to you.

You have a company that is saying instead of competing with netflix, i will try to ring it into the fold.

Is this going to work?

It is smart of virgin media to embrace.

They have done this with tivo.

I do not think you will see this by the u.s. cable guys.

Why will he not see it in the u.s.? comcast is doing it themselves with infinity.

Verizon is doing it with red . at&t -- re dbox.

At&t is skeptical.

Nobody fears netflix because even though they do not present themselves as such, they are an alternative.

They are a reason for people to cut the cord.

People are putting rabbit ears up and getting their content through netflix.

People have said netflix has opportunities to keep growing membership rosters, the more and more people signing up, the better the prophet margins.

I know you do not agree with that because you are concerned that content costs will skyrocket.

Walk us to why you believe so.

It is a misstatement to say fixed price on the content side.

They share in the revenue at the movie theater, on television.

They get it.

Are they sharing the revenue on netflix?

They negotiate deals one year at a time, but if netflix pays $20 million, when they go to 30 million subscribers, they will pay more.

Content guys fear that is not enough, especially when the court -- they fear being the cord being cut, and -- what about netflix creating their own content?

Everything netflix has done so far is somebody else creating content and renting it.

They do not own it.

They have renewable -- renewal rights to "house of cards." i do not think they are close to hbo.

This is a reason why you have underperform on the company.

Let's go to jim for his trade . we are looking for netflix making another new all-time high.

The momentum is unstoppable.

I cannot step in front of this.

I think the stock is going to head higher.

Are you talking about this from a technical perspective?

Michael after has fundamental concerns -- the compactor has fundamental concerns.

-- michael packed her has fundamental concerns.

I can't to go about setting up a call spread.

There is a reward potential of 740 -- $725. it sets up really well in a risk versus reward basis.

Michael, near-term, could we see a move higher?

I think there is no shortage of greater fools out there willing to bid up internet stocks.

Their quality internet companies hitting all-time highs and i think netflix is but his opinion that rally.

Like a lot of skepticism out of michael pacter.

Thank you.

May be the key to netflix stock is being able to stream in the air.

We will go in flight with the ceo of gogo with their in-flight wi-fi.

Maybe you'll be able to watch all of the "house of cards that you want to.

Arsenio hall is back.

Can he get viewers to watch?

We will talk about his guest, his future, and yes, he is still pumping his fist.

We will be right back.


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