Wednesday, Aug 08, 2007
The cat is out of the bag
bloomberg.com: U.K.'s Subprime Crisis May Be Worse Than U.S.'s:
"The U.K. has had a property bubble every bit as crazy as the U.S.'s. Valuations were stretched, and lending criteria loosened. And now arrears are starting to rocket, even while the economy remains healthy."
"Not only does the U.K. face its own subprime crisis, it could be far worse than in the U.S."
Posted by dobber @ 10:06 PM (195 views) Add Comment
5 Comments
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1. Grimsby Reaper said...
It will indeed be far worse. Only in the major population areas of the US was a bubble apparent, with consequential burst. In the UK, however, EVERYWHERE has had a bubble.
2. Uday said...
It would be interesting to know the how the % of defaulters increased against increase in interest rates i.e. Base rate 5% defaulters 5000, Base rate 5.75% defauletrs xxxx and how many do they expect if the base rate hits say 6% or more.
Another issue is this argument about immigrants, what is the quality of these immigrants, to be honest i am one. Basically i am a professional i.e. a licensed category skilled worker. Most of these so called immigrants are handy men from Eastern europe competing with what you can call as middle england. They are not only low quality tenants but are also a threat to the earning potential of the largest segment of British class under employement. So one group negates the advantages of the other, however in this case due to the low earnings (wages/cost) of the immigrants each one of them is equivalent to 1.75 local (middle england), so if you have 2m poles in U.K. as claimed by most analyst, they are displacing 3.5m middle (little) england residents/mortgage holders.
3. taffee said...
looks like the tipping point to me....bloomberg is normally very factual and this article says all we have been saying.33% of sales in uk last year were from investors...take that out and the market would collapse
4. Benstar said...
In response to taffee's comment, Bloomberg are indeed "normally factual". However remember that this article was taken from the "Opinions" section of their website, the opinion of one man called Matthew Lynn - and everyone is entitled to their opinion!
5. dohousescrashinthewoods said...
I find Bloomberg, whilst fairly factual, to be a little on the sensationalist side compared to the rest of the media (though well inside the likes of MoneyWeek and Safe Haven).
Then again, perhaps most of the press is too conservative in reporting what could work out to be massive systemic risks.