SEPTEMBER 12, 2018
EU must grasp world role as U.S. retreats, Juncker says
Alastair Macdonald
STRASBOURG (Reuters) - The European Union must flex its muscles as a world power, EU chief executive Jean-Claude Juncker said on Wednesday, as he spoke critically of U.S. President Donald Trump’s retreat from international engagement.
In his annual State of the Union address to the European Parliament in Strasbourg, Juncker, who is entering his final year as president of the European Commission, urged EU states to bridge angry divisions over budgets, immigration and other issues in order to capitalize on a chance to shape the world.
“Whenever Europe speaks as one, we can impose our position on others,” Juncker said, arguing that a deal he struck in July with Trump to stall a transatlantic tariff war and which won plaudits for the Commission should have come as no surprise.
“The geopolitical situation makes this Europe’s hour: the time for European sovereignty has come,” he said.
Juncker made no direct comment on Trump or U.S. policy but aides said the geopolitical situation he spoke of was a U.S. retreat into what Juncker described elsewhere in the speech as “selfish unilateralism”. He also saw new opportunities to work with China, Japan and others to develop “multilateral” rules.
Some proposals to strengthen the EU’s effectiveness face an uphill battle against member state opposition, notably scrapping national vetoes in some foreign policy areas, such as where economic pressure from the likes of Russia or China on certain EU countries has blocked EU sanctions to defend human rights.
In repeating his support for deeper economic integration, he also pushed the idea that the euro should challenge the dollar as the world’s leading currency, calling it “absurd” that the EU pays for most of its energy in the U.S. currency despite buying it mainly from the likes of Russia and the Gulf states. He said airlines should also buy planes priced in euros not dollars.
Juncker renewed calls for states to push ahead in developing an EU defense capability independent of the U.S.-led NATO alliance and to embrace Africa through investment and a sweeping new free trade area — part of a strategy to curb the flow of poor African migrants which has set EU governments at each other’s throats and fueled a sharp rise in anti-EU nationalism.
EU DIVISIONS
Without naming Hungarian Prime Minister Viktor Orban, Juncker blasted EU leaders who sought to undermine democracy and the rule of law and rejected complaints from lawmakers that the Commission has been lenient toward Hungary, Poland and other eastern states.
Later on Wednesday, the European Parliament voted to sanction Hungary for flouting EU rules on democracy, civil rights and corruption in an unprecedented step that could lead to a suspension of Budapest’s EU voting rights.
At the same time, the Commission put forward a plan to get even tougher on illegal economic migrants whose arrival has so angered Orban and others.
However, the idea of a fully federal European Border and Coast Guard, with its own 10,000-strong uniformed force run from Brussels may hit national resistance.
With an eye on elections next May to the European Parliament, Juncker proposed new vigilance, and penalties, for attempts to manipulate voters. As the centenary nears of the end of World War One, he recalled how Europeans were taken totally by surprise by its outbreak and urged more respect for the EU as a force for peace against nationalistic “poison and deceit”.
He spoke of regret at Britain’s impending withdrawal from the bloc which will mark his five-year mandate and warned Prime Minister Theresa May that the EU would not compromise its single market to let London pick and choose which rules to obey.
But as negotiators struggle to overcome problems about the future of the land border on the island of Ireland, Juncker also pledged that Britain would remain a very close partner.
In the parliamentary debate which followed his hour-long address, Nigel Farage, of the UK Independence Party, accused him of failing to acknowledge the arrival of eurosceptics in government in Italy and a “populist revolt” across Europe that he said would resist Juncker’s aim to centralize more power.
Editing by Alison Williams and Gareth Jones
Friday, September 14, 2018
Six ways China could retaliate in a trade war - BBC News
Six ways China could retaliate in a trade war
By Ana Nicolaci da Costa
Business reporter
20 July 2018
The US is threatening to escalate its trade war with China.
It imposed tariffs on $34bn of Chinese goods on 6 July and only days later listed another $200bn of additional products it intends to target.
US President Donald Trump has said more than $500bn worth could be hit - almost the entire value of China's goods exports to the US last year.
The US buys nearly four times as much from China as it sells to them. Given that China has limited room to retaliate through trade, it could seek other ways to get back at the US.
1. Action against US companies
US firms generate about $300bn of sales domestically in China so they are a potential target, says Julian Evans-Pritchard from Capital Economics. He highlights the likes of Apple, which have significant sales and operations there.
He says China could make life difficult for US companies by slowing down customs clearance for their imports, delaying or denying visa applications, or using health and safety checks as a way of temporarily shutting down a firm's operations.
There could also be more subtle measures. US companies may benefit less from Chinese efforts to open up its services sector (in areas such as finance and healthcare) than European and Japanese counterparts, says Julia Wang from HSBC.
Gary Hufbauer of the Peterson Institute for International Economics (PIIE) in Washington reckons China "will pick out US companies that are not well connected, and burden them with all kinds of regulatory red-tape".
But he says, "this will hurt the Chinese economy, a lot", as US companies contribute to China's economic growth.
How a US-China trade war could hurt us all
Charting the US-China trade battle
US-China trade row: What has happened so far?
2. Restrict tourism to the US
Although the US has a big trade deficit with China, the US sells more services to China than it buys from them. Its services trade surplus with China hit $38bn in 2016.
Part of that is overseas spending by tourists from China. More than 130 million people travelled out of China in 2016. Those tourists, whose long-haul destinations included the US, spent around $260bn that year.
So China could restrict tourism to the US. It wouldn't be the first time China has taken such an action. Last year it banned travel agencies from selling package tours to Korea last year in protest at Seoul allowing a US missile defence system.
However, some think this could be too disruptive.
"These measures will inflict pain on Chinese people," Mr Hufbauer says.
3. Devalue the currency
Lowering the value of the yuan would help exports by making Chinese goods cheaper for other countries to import, and could offset the rise in prices caused by the US tariffs.
Analysts say the fact China's central bank has not supported the currency during its recent fall shows they are leaving things to market forces for now.
Given the yuan has fallen to a one-year low against the dollar, analysts also see little need for the central bank to intervene at this time.
"There is obviously some willingness to allow the currency to weaken to dampen the effect of the tariffs," Mr Evans-Pritchard says. "I don't expect them to engineer a major devaluation of the currency."
4. Sell US bonds
China owns more than $1tn of US government bonds, which some worry gives Beijing influence over the US economy.
But if China sold US bonds in bulk, it would hurt China. Why? Because that would reduce the value of an asset China holds a lot of, and it would have to switch to other, less liquid foreign bond markets.
Also the impact on the US is likely to be limited, as US debt sold by China is likely to be bought by other countries.
"We think this is very unlikely, as falling prices of US treasury securities would also be a loss for China," Nomura said in a research note. "In addition, we believe it is very difficult for China to re-invest its US dollar holdings in a sensible way after selling US treasuries."
5. Interfere with North Korea talks
Mr Trump has suggested China may be interfering in US efforts to denuclearise North Korea.
He recently tweeted he had confidence that North Korean leader Kim Jong Un would honour their agreement, but added: "China, on the other hand, may be exerting negative pressure on a deal because of our posture on Chinese Trade-Hope Not!".
Donald J. Trump
✔
@realDonaldTrump
I have confidence that Kim Jong Un will honor the contract we signed &, even more importantly, our handshake. We agreed to the denuclearization of North Korea. China, on the other hand, may be exerting negative pressure on a deal because of our posture on Chinese Trade-Hope Not!
12:25 AM - Jul 10, 2018
PIIE recently wrote that China had "formidable" weapons in a trade war and could use leverage in areas outside the economic sphere.
"This is a card China could easily play - just signal to the North Koreans to do what comes naturally - stall," PIIE's Mr Hufbauer says. "The big drawback is that such action escalates the trade dispute into a geopolitical dispute of unknown magnitude."
6. Focus on the domestic economy
China could focus on domestic growth, by making sure it has the tools to keep the economy growing during tougher times and by expanding its trade and investment relations with other countries.
Mr Evans-Pritchard says China's "best option" in responding to tariffs is to be ready to prop up the economy. He notes there are signs that earlier moves to slow credit growth and rein in debt levels are changing already.
HSBC's Julia Wang says China will try to expand trade with countries other than the US. China recently hosted EU officials and discussed free trade.
"I think China has already been trying to diversify its trade and investment relationship away from the US since a few years ago, and now they will undoubtedly accelerate," she added.
By Ana Nicolaci da Costa
Business reporter
20 July 2018
The US is threatening to escalate its trade war with China.
It imposed tariffs on $34bn of Chinese goods on 6 July and only days later listed another $200bn of additional products it intends to target.
US President Donald Trump has said more than $500bn worth could be hit - almost the entire value of China's goods exports to the US last year.
The US buys nearly four times as much from China as it sells to them. Given that China has limited room to retaliate through trade, it could seek other ways to get back at the US.
1. Action against US companies
US firms generate about $300bn of sales domestically in China so they are a potential target, says Julian Evans-Pritchard from Capital Economics. He highlights the likes of Apple, which have significant sales and operations there.
He says China could make life difficult for US companies by slowing down customs clearance for their imports, delaying or denying visa applications, or using health and safety checks as a way of temporarily shutting down a firm's operations.
There could also be more subtle measures. US companies may benefit less from Chinese efforts to open up its services sector (in areas such as finance and healthcare) than European and Japanese counterparts, says Julia Wang from HSBC.
Gary Hufbauer of the Peterson Institute for International Economics (PIIE) in Washington reckons China "will pick out US companies that are not well connected, and burden them with all kinds of regulatory red-tape".
But he says, "this will hurt the Chinese economy, a lot", as US companies contribute to China's economic growth.
How a US-China trade war could hurt us all
Charting the US-China trade battle
US-China trade row: What has happened so far?
2. Restrict tourism to the US
Although the US has a big trade deficit with China, the US sells more services to China than it buys from them. Its services trade surplus with China hit $38bn in 2016.
Part of that is overseas spending by tourists from China. More than 130 million people travelled out of China in 2016. Those tourists, whose long-haul destinations included the US, spent around $260bn that year.
So China could restrict tourism to the US. It wouldn't be the first time China has taken such an action. Last year it banned travel agencies from selling package tours to Korea last year in protest at Seoul allowing a US missile defence system.
However, some think this could be too disruptive.
"These measures will inflict pain on Chinese people," Mr Hufbauer says.
3. Devalue the currency
Lowering the value of the yuan would help exports by making Chinese goods cheaper for other countries to import, and could offset the rise in prices caused by the US tariffs.
Analysts say the fact China's central bank has not supported the currency during its recent fall shows they are leaving things to market forces for now.
Given the yuan has fallen to a one-year low against the dollar, analysts also see little need for the central bank to intervene at this time.
"There is obviously some willingness to allow the currency to weaken to dampen the effect of the tariffs," Mr Evans-Pritchard says. "I don't expect them to engineer a major devaluation of the currency."
4. Sell US bonds
China owns more than $1tn of US government bonds, which some worry gives Beijing influence over the US economy.
But if China sold US bonds in bulk, it would hurt China. Why? Because that would reduce the value of an asset China holds a lot of, and it would have to switch to other, less liquid foreign bond markets.
Also the impact on the US is likely to be limited, as US debt sold by China is likely to be bought by other countries.
"We think this is very unlikely, as falling prices of US treasury securities would also be a loss for China," Nomura said in a research note. "In addition, we believe it is very difficult for China to re-invest its US dollar holdings in a sensible way after selling US treasuries."
5. Interfere with North Korea talks
Mr Trump has suggested China may be interfering in US efforts to denuclearise North Korea.
He recently tweeted he had confidence that North Korean leader Kim Jong Un would honour their agreement, but added: "China, on the other hand, may be exerting negative pressure on a deal because of our posture on Chinese Trade-Hope Not!".
Donald J. Trump
✔
@realDonaldTrump
I have confidence that Kim Jong Un will honor the contract we signed &, even more importantly, our handshake. We agreed to the denuclearization of North Korea. China, on the other hand, may be exerting negative pressure on a deal because of our posture on Chinese Trade-Hope Not!
12:25 AM - Jul 10, 2018
PIIE recently wrote that China had "formidable" weapons in a trade war and could use leverage in areas outside the economic sphere.
"This is a card China could easily play - just signal to the North Koreans to do what comes naturally - stall," PIIE's Mr Hufbauer says. "The big drawback is that such action escalates the trade dispute into a geopolitical dispute of unknown magnitude."
6. Focus on the domestic economy
China could focus on domestic growth, by making sure it has the tools to keep the economy growing during tougher times and by expanding its trade and investment relations with other countries.
Mr Evans-Pritchard says China's "best option" in responding to tariffs is to be ready to prop up the economy. He notes there are signs that earlier moves to slow credit growth and rein in debt levels are changing already.
HSBC's Julia Wang says China will try to expand trade with countries other than the US. China recently hosted EU officials and discussed free trade.
"I think China has already been trying to diversify its trade and investment relationship away from the US since a few years ago, and now they will undoubtedly accelerate," she added.
Even this Chinese CEO Who’s Benefiting From Trump’s Trade War Says It’s a Dumb Idea - TIME
Even this Chinese CEO Who’s Benefiting From Trump’s Trade War Says It’s a Dumb Idea
Posted: 12 Sep 2018 10:25 PM PDT
Li Bin has many reasons to be happy. Seeing the Chinese government’s backing for green tech, he teamed up with a former Ford executive to launch high-end electric vehicle firm NIO, which has been dubbed China’s answer to Tesla.
NIO’s first model, the jaw-dropping ES9, broke speed records at the famed Nürburgring racing track in Germany. On Thursday, the Tencent-backed firm generated $1 billion at its IPO in New York, putting its overall value at $6 billion. (Though less than earlier estimates of $8-9 billion.)
Meanwhile, NIO’s chief rival is having major problems. Tesla was forced to raise prices on its vehicles in China by 20% after Beijing boosted tariffs on American vehicles in retaliation for President Donald Trump’s hike on $34 billion of Chinese exports. The American firm’s stock has dropped more than a quarter from their high point last year. It is also facing lawsuits for alleged fraudulent company statements. And there were more legal woes after CEO Elon Musk’s bizarre and baseless accusation that a British diver, whom helped rescue a stranded football team from a cave in northern Thailand in July, was a “child rapist.”
More bad news appears on the way. On Friday, Trump said tariffs on an another $200 billion in Chinese imports would be inked “very soon.” He added that an additional $267 billion in Chinese goods were “ready to go on short notice.”
This should be music to Li’s ears. Beijing’s economic ministry spokesperson, Gao Feng, has said that “China will be forced to roll out necessary retaliatory measures,” which would seem to further boost NIO’s competitive advantage. Already, NIO’s ES8 electric SUV sells for $65,000, or around half the China road price of the most basic Tesla Model X.
Li, however, didn’t become a billionaire by ignoring the bigger picture. “There is no real winner in a trade war,” the NIO CEO tells TIME. “I believe a reasonable world leader should possess the wisdom to avoid a trade war instead of causing one.”
Read More: Things Are Not Going to Plan in Trump’s U.S. Trade Deficit Wars
Trump campaigned that unfair trade with China costs American jobs. The former reality television star took particular aim at America’s current record $375.2 billion trade deficit with China, as well as Intellectual Property (IP) theft that the U.S. Trade Representative estimates costs between $225 billion and $600 billion annually.
Li, however, points to NIO’s more than 300 patents on battery replacement technology — which allows a NIO power source to be swapped out in just three minutes — as evidence Chinese firms now lead rather than steal technology.
“Objectively speaking, a long time ago there some rogue players in China that didn’t have enough respect for IP,” he says. “But today, I don’t see any of the major U.S. IP holders accusing China.”
In fact, adds Li, some of America’s largest firms — such as Apple, Cisco and Intel — make huge profits from the Chinese market. “If these big IT companies were to complain about IP violations, then the accusation might hold some truth,” he says. “But I haven’t see any. People should look at the facts and stop judging China on outdated stereotypes.”
The importance of the Chinese market to U.S. firms is undeniable. Apple made $9.6 billion in revenues from greater China in the June quarter, helping the Cupertino behemoth to hit its recent $1 trillion valuation. China’s strident state media has warned such success provide Beijing with “bargaining chips” and suggested a trade war could make Apple “a target of anger and nationalist sentiment.”
China is also the world’s largest auto market with more than 28 million vehicles sold last year. Annual sales are forecast to grow steadily while the U.S. and European markets shrink. Tesla’s Chinese revenues doubled last year to over $2 billion, comprising almost 20% of the firm’s total income. In July, Tesla inked a deal to open a factory in Shanghai capable of producing 500,000 cars a year.
For Washington, that deal is bittersweet. On the one hand, it marks the first time a U.S. automaker has been permitted to set up shop in China without partnering with a Chinese firm. In April, Beijing agreed to scrap 50% local partnership rules on electric vehicle makers in 2018 and larger passenger vehicle market by 2022.
This is exactly the sort of increased market access U.S. firms been clamoring for in line with WTO rules, and seen as a positive response to Trump’s vitriolic attacks on Chinese trade practices. But the downside is that these are manufacturing and assembly-line jobs that would likely have remained in the U.S.
Telsa may also find itself targeted by increased regulations if Sino-U.S. relations spiral, and would not have the help negotiating China’s Kafkian red tape that partnering with a local company provides.
The risks are enough to boost NIO’s credentials despite the firm only having delivered 2,000 cars to date, and not even having a license to build its own vehicles. (It instead uses a plant by state-backed Anhui Jianghuai Automobile Group Corp.) In fact, NIO recorded just $7 million in sales over the first half of this year, posting a loss of $503 million.
Li, however, is confident of turning this around, saying Trump’s resurgent trade nationalism flies in the face of today’s globalized world. NIO, for one, is headquartered in Shanghai, Munich and San Jose, Calif. It has 6,000 employees from over 40 countries, including 200 from Europe and 600 recruited from Silicon Valley, plus key backers from Taiwan.
“How can you define the ownership of such company?” asks Li. “From our first day we’ve seen ourselves as a global startup.”
—With reporting by Zhang Chi/Shanghai
Bitcoin crash: This man lost his savings when cryptocurrencies plunged - CNN Money
Bitcoin crash: This man lost his savings when cryptocurrencies plunged
by Michael Kaplan @CNNMoneyInvest
September 11, 2018: 7:59 AM ET
He bet on Bitcoin and lost nearly everything
An estimated $400 billion has been wiped off the value of major cryptocurrencies since January.
Sean Russell's life savings were among them.
Russell rarely played the stock market and had little investing experience when he put around $120,000 into bitcoin in November 2017. He was stunned when that turned into $500,000 in just one month.
"I think there was one morning where I woke up, where I made about £12,000 ($15,600) in one morning on my investment and it just kept going," said Russell. "I was thinking, wow, that's mortgages paid, that's holidays that I've always dreamed of."
The dream didn't last for Russell, who works as a property developer in the United Kingdom, buying homes and fixing them up. The price of Bitcoin surpassed $20,000 in December before collapsing. It now trades at $6,300.
Russell attempted to mitigate his losses by shifting money from bitcoin (XBT) to an offshoot called Bitcoin Cash and other cryptocurrencies including Ethereum and Ripple. But that didn't work, and Russell says the paper losses on his initial investment have reached 96%.
"It was devastating, quite traumatic, really," Russell said. "I've seen stories on the news of billionaires going bankrupt, and you think how can that be? How on earth did you lose that amount of money? And yet, here I am in that position."
Sean Russell lost most of his savings when the price of cryptocurrencies plunged.
Russell is not alone.
Michel Rauchs, who researches cryptocurrency and blockchain at the Cambridge Centre for Alternative Finance, said the explosive rise in prices in 2017 attracted a wave of inexperienced investors.
"Retail investors, students, housewives, even grandma was driven in by the hype," says Rauchs. "They were told by the media that this was an opportunity of a lifetime. They bought at the top and are now sitting on heavy losses."
The crash has left professional investors and enthusiasts debating where cryptocurrencies go from here.
"Clearly the frenzy that we have seen and the volatility in the price of bitcoin ... resembles a lot of other financial bubbles that happen over and over again in our economic history," said Benedetto De Martino, a behavioral economist at University College London.
The fever that gripped cryptocurrency investors has faded in recent months. JPMorgan (JPM) CEO Jamie Dimon and Warren Buffett of Berkshire Hathaway (BRKA) have warned investors to stay away from bitcoin.
Last week, bitcoin prices plunged more than 20% in two days after Business Insider reported that investment banking giant Goldman Sachs (GS) may be dropping plans to launch a crypto trading desk.
Goldman Sachs told CNNMoney it hadn't made a firm decision bitcoin or other cryptocurrencies.
The Securities and Exchange Commission blocked several proposals for bitcoin exchange-traded funds in the past few months, including plans from ETF giants ProShares and Direxion and one backed by the Winklevoss brothers.
Despite the warnings, some cryptocurrency entrepreneurs see the boom and bust as growing pains.
"Markets are cyclical and there's still a lot of opportunity for sophisticated investors," said Benjamin Dives, CEO of cryptocurrency trading platform London Block Exchange.
Before he first invested, Russell spent years tracking bitcoin and studying blockchain, the technology underpinning digital currencies. He said the learning process was like solving the plot of a murder mystery.
Despite the loss, he remains a committed investor.
"I have to be hopeful about something," he said. "I need to keep my mind occupied, because when I just focused on the money I lost, it destroyed me mentally and emotionally."
CNNMoney (Leeds, UK)
First published September 11, 2018: 7:59 AM ET
by Michael Kaplan @CNNMoneyInvest
September 11, 2018: 7:59 AM ET
He bet on Bitcoin and lost nearly everything
An estimated $400 billion has been wiped off the value of major cryptocurrencies since January.
Sean Russell's life savings were among them.
Russell rarely played the stock market and had little investing experience when he put around $120,000 into bitcoin in November 2017. He was stunned when that turned into $500,000 in just one month.
"I think there was one morning where I woke up, where I made about £12,000 ($15,600) in one morning on my investment and it just kept going," said Russell. "I was thinking, wow, that's mortgages paid, that's holidays that I've always dreamed of."
The dream didn't last for Russell, who works as a property developer in the United Kingdom, buying homes and fixing them up. The price of Bitcoin surpassed $20,000 in December before collapsing. It now trades at $6,300.
Russell attempted to mitigate his losses by shifting money from bitcoin (XBT) to an offshoot called Bitcoin Cash and other cryptocurrencies including Ethereum and Ripple. But that didn't work, and Russell says the paper losses on his initial investment have reached 96%.
"It was devastating, quite traumatic, really," Russell said. "I've seen stories on the news of billionaires going bankrupt, and you think how can that be? How on earth did you lose that amount of money? And yet, here I am in that position."
Sean Russell lost most of his savings when the price of cryptocurrencies plunged.
Russell is not alone.
Michel Rauchs, who researches cryptocurrency and blockchain at the Cambridge Centre for Alternative Finance, said the explosive rise in prices in 2017 attracted a wave of inexperienced investors.
"Retail investors, students, housewives, even grandma was driven in by the hype," says Rauchs. "They were told by the media that this was an opportunity of a lifetime. They bought at the top and are now sitting on heavy losses."
The crash has left professional investors and enthusiasts debating where cryptocurrencies go from here.
"Clearly the frenzy that we have seen and the volatility in the price of bitcoin ... resembles a lot of other financial bubbles that happen over and over again in our economic history," said Benedetto De Martino, a behavioral economist at University College London.
The fever that gripped cryptocurrency investors has faded in recent months. JPMorgan (JPM) CEO Jamie Dimon and Warren Buffett of Berkshire Hathaway (BRKA) have warned investors to stay away from bitcoin.
Last week, bitcoin prices plunged more than 20% in two days after Business Insider reported that investment banking giant Goldman Sachs (GS) may be dropping plans to launch a crypto trading desk.
Goldman Sachs told CNNMoney it hadn't made a firm decision bitcoin or other cryptocurrencies.
The Securities and Exchange Commission blocked several proposals for bitcoin exchange-traded funds in the past few months, including plans from ETF giants ProShares and Direxion and one backed by the Winklevoss brothers.
Despite the warnings, some cryptocurrency entrepreneurs see the boom and bust as growing pains.
"Markets are cyclical and there's still a lot of opportunity for sophisticated investors," said Benjamin Dives, CEO of cryptocurrency trading platform London Block Exchange.
Before he first invested, Russell spent years tracking bitcoin and studying blockchain, the technology underpinning digital currencies. He said the learning process was like solving the plot of a murder mystery.
Despite the loss, he remains a committed investor.
"I have to be hopeful about something," he said. "I need to keep my mind occupied, because when I just focused on the money I lost, it destroyed me mentally and emotionally."
CNNMoney (Leeds, UK)
First published September 11, 2018: 7:59 AM ET
Brexit: Carney warns no-deal could see house prices plunge - BBC News
Sept. 14, 2018.
Brexit: Carney warns no-deal could see house prices plunge
The Bank of England's governor has warned the cabinet that a chaotic no-deal Brexit could crash house prices and send another financial shock through the economy.
Mark Carney met senior ministers on Thursday to discuss the risks of a disorderly exit from the EU.
His worst-case scenario was that house prices could fall as much as 35% over three years, a source told the BBC.
The warning echoes some of the Bank's previous comments.
The Bank of England routinely carries out "stress tests" to check whether the banking system can withstand extreme financial shocks.
Its latest one was conducted in November, when it said a 33% fall in house prices could occur in a worst-case scenario.
Several reports said that the Bank governor also told the Downing Street meeting that mortgage rates could spiral, the pound and inflation could fall, and countless homeowners could be left in negative equity.
Preparing for two 'no deal' scenariosBrexit papers: What no deal could mean
Ahmed: Carney and the "no deal" Brexit threat
Brexit could 're-ignite conflict' in Northern Ireland
Bank holds rates amid Brexit uncertainty
May says £39bn bill linked to Brexit deal
Mr Carney, who has just agreed to stay on as governor of the central bank until 2020, has faced strong criticism in the past, with Brexiteers accusing him of being part of the Remain camp.
Analysis:
Kamal Ahmed, economics editor
It appears that the Governor wasn't providing the Cabinet with a forecast of what the Bank believes would happen in the event of a no deal Brexit. He was briefing the Cabinet on what preparations the Bank was making if that does happen, including last November's stress test.
It was not a forecast.
It was an apocalyptic test where the Bank deliberately sets the parameters beyond what might reasonably be expected to occur. The major banks all passed the test, giving reassurance that the financial system can cope with whatever happens next year.
The Governor believes that a "no deal" scenario would be bad for the economy. But not as bad as the headlines today which are based on a doomsday scenario that is not actually forecast to happen.
In August, Mr Carney told the BBC that the risk of a no-deal Brexit was "uncomfortably high".
That comment prompted leading Tory eurosceptic Jacob Rees-Mogg to call Mr Carney "the high priest of Project Fear", while former minister Iain Duncan Smith said "there is no such thing as a no-deal" and the Bank "struggled to understand how this would work".
Independent property expert Henry Pryor told the BBC that Mr Carney was "not predicting Armageddon, he was not predicting house prices would fall by a third, they are just making sure that if, for some extraordinary reason anything was to go horribly wrong, the bank is prepared."
But he warned house prices were likely to fall in the first half of the 2019 as people put off buying amid the Brexit uncertainty, while the number of sellers, "driven by death, debt and divorce" would remain about the same.
Responsible planning
Following the Downing Street meeting, the Prime Minister's official spokesman said ministers remained confident of a Brexit deal, but had agreed to "ramp up" their no-deal planning.
"As a responsible government, we need to plan for every eventuality. The Cabinet agreed that no-deal remains an unlikely but possible scenario in six months' time," the spokesman said.
The Bank of England declined to comment.
The cabinet meeting was part of a series of no-deal planning sessions designed to discuss the "unlikely" scenario that the UK leaves the EU without an agreement in place. After each meeting, planning papers are published on various subjects.
Phones and driving
On Thursday, the papers disclosed that UK car drivers may have to get an international driving permit if they want to drive in some European countries after a no-deal Brexit.
The government said that after March 2019 "your driving licence may no longer be valid by itself" in the EU, in its latest no-deal planning papers.
The papers also warned that Britons travelling to the EU may need to make sure their passports have six months left to run.
And, in an interview with BBC Political Editor Laura Kuenssberg, Brexit Secretary Dominic Raab said the government was trying to give the "reassurance that consumers need" on the issue of mobile phone roaming charges but admitted that European operators could pass on charges.
He said: "No, I can't give a cast-iron guarantee. What I can say is that the government would legislate to limit the ability of roaming charges to be imposed on customers."
Brexit: Carney warns no-deal could see house prices plunge
The Bank of England's governor has warned the cabinet that a chaotic no-deal Brexit could crash house prices and send another financial shock through the economy.
Mark Carney met senior ministers on Thursday to discuss the risks of a disorderly exit from the EU.
His worst-case scenario was that house prices could fall as much as 35% over three years, a source told the BBC.
The warning echoes some of the Bank's previous comments.
The Bank of England routinely carries out "stress tests" to check whether the banking system can withstand extreme financial shocks.
Its latest one was conducted in November, when it said a 33% fall in house prices could occur in a worst-case scenario.
Several reports said that the Bank governor also told the Downing Street meeting that mortgage rates could spiral, the pound and inflation could fall, and countless homeowners could be left in negative equity.
Preparing for two 'no deal' scenariosBrexit papers: What no deal could mean
Ahmed: Carney and the "no deal" Brexit threat
Brexit could 're-ignite conflict' in Northern Ireland
Bank holds rates amid Brexit uncertainty
May says £39bn bill linked to Brexit deal
Mr Carney, who has just agreed to stay on as governor of the central bank until 2020, has faced strong criticism in the past, with Brexiteers accusing him of being part of the Remain camp.
Analysis:
Kamal Ahmed, economics editor
It appears that the Governor wasn't providing the Cabinet with a forecast of what the Bank believes would happen in the event of a no deal Brexit. He was briefing the Cabinet on what preparations the Bank was making if that does happen, including last November's stress test.
It was not a forecast.
It was an apocalyptic test where the Bank deliberately sets the parameters beyond what might reasonably be expected to occur. The major banks all passed the test, giving reassurance that the financial system can cope with whatever happens next year.
The Governor believes that a "no deal" scenario would be bad for the economy. But not as bad as the headlines today which are based on a doomsday scenario that is not actually forecast to happen.
In August, Mr Carney told the BBC that the risk of a no-deal Brexit was "uncomfortably high".
That comment prompted leading Tory eurosceptic Jacob Rees-Mogg to call Mr Carney "the high priest of Project Fear", while former minister Iain Duncan Smith said "there is no such thing as a no-deal" and the Bank "struggled to understand how this would work".
Independent property expert Henry Pryor told the BBC that Mr Carney was "not predicting Armageddon, he was not predicting house prices would fall by a third, they are just making sure that if, for some extraordinary reason anything was to go horribly wrong, the bank is prepared."
But he warned house prices were likely to fall in the first half of the 2019 as people put off buying amid the Brexit uncertainty, while the number of sellers, "driven by death, debt and divorce" would remain about the same.
Responsible planning
Following the Downing Street meeting, the Prime Minister's official spokesman said ministers remained confident of a Brexit deal, but had agreed to "ramp up" their no-deal planning.
"As a responsible government, we need to plan for every eventuality. The Cabinet agreed that no-deal remains an unlikely but possible scenario in six months' time," the spokesman said.
The Bank of England declined to comment.
The cabinet meeting was part of a series of no-deal planning sessions designed to discuss the "unlikely" scenario that the UK leaves the EU without an agreement in place. After each meeting, planning papers are published on various subjects.
Phones and driving
On Thursday, the papers disclosed that UK car drivers may have to get an international driving permit if they want to drive in some European countries after a no-deal Brexit.
The government said that after March 2019 "your driving licence may no longer be valid by itself" in the EU, in its latest no-deal planning papers.
The papers also warned that Britons travelling to the EU may need to make sure their passports have six months left to run.
And, in an interview with BBC Political Editor Laura Kuenssberg, Brexit Secretary Dominic Raab said the government was trying to give the "reassurance that consumers need" on the issue of mobile phone roaming charges but admitted that European operators could pass on charges.
He said: "No, I can't give a cast-iron guarantee. What I can say is that the government would legislate to limit the ability of roaming charges to be imposed on customers."
Trump says US under 'no pressure' for China trade deal - BBC News
Sept. 14, 2018.
Trump says US under 'no pressure' for China trade deal
The US President Donald Trump said Washington is under "no pressure" to achieve a trade deal with China as the prospect of new tariffs loom.
The comments come amid reports the two sides could resume talks to stave off a third round of US tariffs.
China welcomed the offer of talks and said the two countries were discussing the details, according to reports.
The US has launched a trade war against China which could see all of its exports to the US subject to duties.
"We are under no pressure to make a deal with China, they are under pressure to make a deal with us," Mr Trump said in a tweet on Thursday.
"Our markets are surging, theirs are collapsing."
The US and China have slapped tariffs on $50bn of one another's goods this year in an escalating trade war between the world's two largest economies.
The tariffs are the latest Trump policy to challenge the free trade system which has prevailed for decades.
They are already affecting companies, particularly the automobile industry, and hurting economies.
Mr Trump said last week he could move "very soon" to impose tariffs on an additional $200bn (£153bn) worth of products with taxes on another $267bn "ready to go on short notice".
If both sets of tariffs go ahead it would mean virtually all of China's US exports would be subject to new tariffs.
"The [US] administration views tariffs as a way of getting the attention of the Chinese leadership and increasing their leverage at the negotiating table," Michael Froman, former US trade representative told the BBC.
"I don't think the imposition of tariffs are a wise move because it's a tax, it's a tax on the consumer ultimately. It's also very disruptive to companies who are trying to manage global supply chains."
Potential talks
Details on the potential trade talks were thin, but Larry Kudlow, White House economic advisor, said the prospect of talks was a positive development.
Mr Kudlow told Fox Business News on Wednesday that US Treasury Secretary Steven Mnuchin "has apparently issued an invitation".
"I can't give you many details because there aren't many details. But I always believe in most cases talking is better than not talking, so I regard this as a plus."
Later on Thursday, China's foreign ministry welcomed the offer of talks and said the two countries were discussing details.
The White House says tariffs are a response to China's unfair trade policies, which Mr Trump blames for helping to create a huge trade deficit.
China accuses the US of launching "the largest trade war in economic history" and has retaliated in kind.
Trump says US under 'no pressure' for China trade deal
The US President Donald Trump said Washington is under "no pressure" to achieve a trade deal with China as the prospect of new tariffs loom.
The comments come amid reports the two sides could resume talks to stave off a third round of US tariffs.
China welcomed the offer of talks and said the two countries were discussing the details, according to reports.
The US has launched a trade war against China which could see all of its exports to the US subject to duties.
"We are under no pressure to make a deal with China, they are under pressure to make a deal with us," Mr Trump said in a tweet on Thursday.
"Our markets are surging, theirs are collapsing."
The US and China have slapped tariffs on $50bn of one another's goods this year in an escalating trade war between the world's two largest economies.
The tariffs are the latest Trump policy to challenge the free trade system which has prevailed for decades.
They are already affecting companies, particularly the automobile industry, and hurting economies.
Mr Trump said last week he could move "very soon" to impose tariffs on an additional $200bn (£153bn) worth of products with taxes on another $267bn "ready to go on short notice".
If both sets of tariffs go ahead it would mean virtually all of China's US exports would be subject to new tariffs.
"The [US] administration views tariffs as a way of getting the attention of the Chinese leadership and increasing their leverage at the negotiating table," Michael Froman, former US trade representative told the BBC.
"I don't think the imposition of tariffs are a wise move because it's a tax, it's a tax on the consumer ultimately. It's also very disruptive to companies who are trying to manage global supply chains."
Potential talks
Details on the potential trade talks were thin, but Larry Kudlow, White House economic advisor, said the prospect of talks was a positive development.
Mr Kudlow told Fox Business News on Wednesday that US Treasury Secretary Steven Mnuchin "has apparently issued an invitation".
"I can't give you many details because there aren't many details. But I always believe in most cases talking is better than not talking, so I regard this as a plus."
Later on Thursday, China's foreign ministry welcomed the offer of talks and said the two countries were discussing details.
The White House says tariffs are a response to China's unfair trade policies, which Mr Trump blames for helping to create a huge trade deficit.
China accuses the US of launching "the largest trade war in economic history" and has retaliated in kind.
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