[Sledgehead]

News 24 currently has THREE inflation report / market commentators in the studio: Julia Ceasar (duh), Karen Bowman (who gave that correspondent a brain!) and Jenny Scott (who gave that correspondent two brains!).

Trouble for the bull is, as the IQ rises the rate cut count reduces!

[Sledgehead]

7 investment management think only one more rate cut. Cites inflationary pressures.

[ExeC]

nodumsunreader, on Aug 10 2005, 02:29 PM, said:

25 years ago, where I am (NHC) you could have bought a 'starter' home for around £15-20k. Repayments were well over £100 per month (12% IR). Extrapolating those figures ten fold to todays values makes current monthly payments on the same house reletively cheap. Still in those days we had a rising SM and a rising PM so what do I know
<{POST_SNAPBACK}>

Nodumsunreader, i aint read all thats on here...

But heres a simple fact for you,

We live just outside london, we earn £39,000 between us per year and CANNOT afford to buy a house. The best we could possibly get if we tried would be on an ex council estate at like 5.5x our wage, which would be too much.

Its a fact for us, so if this is happening to us, surely we aint the only people in this country with the same problem. And im sure us FTB's are the key to the property chain ?

[nodumsunreader]

Bart of Darkness, on Aug 10 2005, 03:31 PM, said:

Plenty of loud sheep over at the Sinking Pig.

"To provide a counter argument";  This would be welcome if your contributions didn't display a basic ignorance of elementary concepts in finance. Still, amongst Sun readers you're probably considered a financial guru.

Sun readers. Now there's a good example of sheep.
<{POST_SNAPBACK}>

The problem for you self appointed 'intelligent' sheep is that you fail to see what will happen if your wished for HPC actually happened. Ok so you get your 30-50% reduction in HP's. And just where do you think that would leave the economy and your prospects for generating earnings to pay a mortgage on all those cheap properties? The best thing that could happen to HP's over the next few years would be static or small increases below inflation and earnings NOT a HPC. The whole philosophy of an HPC is dangerous to the very people who think they will gain from it. The only winners will not be those who want to get on the ladder or want to remain in employment, it will be those who own property, no longer need a job and have ready cash to invest in cheap houses. Come to think of it, an HPC might be a good thing after all.

[MarkG]

Quote

The best thing that could happen to HP's over the next few years would be static or small increases below inflation and earnings NOT a HPC.

No, by far the best thing would be for prices to drop 60% tomorrow. Then we could get on with our lives, rather than wait thirty years for wages to catch up with prices (if they ever do).

Quote

And just where do you think that would leave the economy and your prospects for generating earnings to pay a mortgage on all those cheap properties?

What makes you think we'll need mortgages if prices crash? Many of us could buy houses _for cash_ if prices dropped back to historically normal 3.5x income levels.

[Hairlocks]

Weather we wish for a HPC or not is not going to affect if it if/how it happens.

But I,and FTB's will be in a much worst position if they buy now and a HPC does happen, then if they rent and a HPC occurs.

[nodumsunreader]

MarkG, on Aug 10 2005, 03:52 PM, said:

No, by far the best thing would be for prices to drop 60% tomorrow. Then we could get on with our lives, rather than wait thirty years for wages to catch up with prices (if they ever do).
What makes you think we'll need mortgages if prices crash? Many of us could buy houses _for cash_ if prices dropped back to historically normal 3.5x income levels.
<{POST_SNAPBACK}>

Good for you but I suspect there are many who could not - and would you want to invest your capital once employment prospects became less secure?

[Sledgehead]

nodumsunreader, on Aug 10 2005, 03:48 PM, said:

The problem for you self appointed 'intelligent' sheep is that you fail to see what will happen if your wished for HPC actually happened. Ok so you get your 30-50% reduction in HP's. And just where do you think that would leave the economy and your prospects for generating earnings to pay a mortgage on all those cheap properties?

May I point out the following:

                           %UK profits

BP                                  18
AstraZeneca                         22
Vodaphone                            8
Glaxo                               5
HSBC                               18

Source : Company Refs & Telegraph

These figures are typical of our largest companies (excluding specialist UK mortgage lenders). Our leading companies, by quirk of our historical past, are benefitting from trade in emerging economies. In short, the consumer may get nobbled, house price may get nobbled, but the wider economy need not suffer as badly as you make out. Why? Gordon Brown can take his taxes from bumper company profits, so his spending plans aren't completely trashed and a fall in property assest need not be accompanied by a rise in taxation. The key thing is not to be levergaed into it a HPC.

An obvious way of doing this (NDSR aside) is lowering ones exposure to property, which, let's face it, has the disadvantage of not being abl eto take advantage of growth in the Far East and Eastern Europe.

nodumsunreader, on Aug 10 2005, 03:48 PM, said:

.....if your wished for HPC actually happened .....  The only winners will ....be those who own property<{POST_SNAPBACK}>

You really are a dumbass fool old boy!

This post has been edited by Sledgehead: 10 August 2005 - 04:19 PM

[munimula]

nodumsunreader, on Aug 10 2005, 04:56 PM, said:

Good for you but I suspect there are many who could not - and would you want to invest your capital once employment prospects became less secure?
<{POST_SNAPBACK}>

The majority couldn't, only a pitiful 2.5% or something of the under 35s save any money (National Savings & Investments figures). This is another reason prices are not sustainable because FTBers aren't saving money towards house deposits - what's the point at current prices, you need tens of thousands now. In the past you needed only a few thousand.

Stick that in your pipe you sun reading gimp

...and all the FTBs of the future are starting work with £15K and rising student loans, they'd need to save 20 years to pay that off and save for a deposit at today's prices...which is why they won't have to because they won't be buying at today's prices

This post has been edited by munimula: 10 August 2005 - 04:11 PM

[nodumsunreader]

Sledgehead, on Aug 10 2005, 04:03 PM, said:

May I point out the following:

                           %UK sales    %UK profits

BP                       10                18
AstraZeneca               5                  22

These figures are typical of our largest companies (excluding specialist UK mortgage lenders). In short, the consumer may get nobbled, house price may get nobbled, but the wider economy need not suffer as badly as you make out. They key thing is not to be levergaed into it.
Yeah, dream on!
You really are a dumbass fool old boy!
<{POST_SNAPBACK}>

You say the wider economy 'need not suffer as badly as you make out' from a HPC but I suspect you have your doubts eh! ?

[CrashIsUnderWay]

Hey Muni!

Aren't you being a bit unfair to gimps there???

This 'NoDummyThrownOutOfPram' person makes the average gimp look educated, witty, and charming...

[BoredTrainBuilder]

Sledgehead, on Aug 10 2005, 04:14 PM, said:

Great: HousePriceCrash's cummulative IQ surges on admission of new Arsenal supporter! <{POST_SNAPBACK}>

As a Scot living in England I have been able to increase the average IQ in both countries.

[nodumsunreader]

munimula, on Aug 10 2005, 04:07 PM, said:

The majority couldn't, only a pitiful 2.5% or something of the under 35s save any money (National Savings & Investments figures). This is another reason prices are not sustainable because FTBers aren't saving money towards house deposits - what's the point at current prices, you need tens of thousands now. In the past you needed only a few thousand.

Stick that in your pipe you sun reading gimp

...and all the FTBs of the future are starting work with £15K and rising student loans, they'd need to save 20 years to pay that off and save for a deposit at today's prices...which is why they won't have to because they won't be buying at today's prices
<{POST_SNAPBACK}>

So how would a recession resulting from an HPC assist them? Without employment,they won't be buying at any prices will they?

[zzg113]

Quote

So how would a recession resulting from an HPC assist them? Without employment,they won't be buying at any prices will they?

Not everyone loses their job in a recession. And the average HPCer with high personal savings/rainy day fund will likely weather such an event much better than your average savings-short MEWed-out homeowning consumer.

[Sledgehead]

nodumsunreader, on Aug 10 2005, 04:19 PM, said:

You say the wider economy 'need not suffer as badly as you make out' from a HPC but I suspect you have your doubts eh! ?
<{POST_SNAPBACK}>

Make no mistake, those who believe in ever increasing property prices, especially investors with multiple units and BTLers, are gonna get hit REAL bad. Why? After all, what about all those accumulated profits from the boom? Surely that will protect them?

th eproblem is one of mindset. When you've made a fortune from an asset it's hard to go to bed with another. You see a dip and think "it's doe well for me in the past, leverage up!" We hear it on HPC over and over again: "FTBs won't benefit from a fall as LLs will jump in first as FTBs / STRs don't have the nerve."

Nerve? It isn't nerve you are short of: it's perspective! Bulls WILL buy first. And prices WILL fall further. They'll buy again, leveraging further. Prices will continue to fall. Soon their leverage will be so great and their losses so large all their profist will have gone.

Guess what they suddenly aquire as tootal capital gains = zero? You guessed it: PERSPECTIVE.

That's when they start to read up on all those "boring stats" the bears have been familiar with for ages. BOO! say the stats to them in the fresh light of perspective. And the more they read, the more they sell at a loss, that is if theBank hasn't already foreclosed.

Meanwhile the bears recognise what they have waited for and buy the panic.

And the economy? Well, it absorbed a 50% stock market fall 3 years ago. It won't be pretty but I think it can handle a HPC.


Sweet dreams.