Monday, Feb 11, 2008
The collective delusion that house prices only go up
FT video interview: Peter Bernstein
Venerable historian Peter Bernstein speaks on the causes of the subprime. We went through a period of low risk. When risk is low so are returns. So people started taking more risks. This effects the whole financial system. The ratings agencies were part of this delusion that there was low risk. The delusion was based on the assumption that house prices don't fall. Video in three parts the third ends with a comment on gold (apologies if we are not allowed to mention gold on this blog anymore!).
Posted by happyrenterz @ 01:13 PM (364 views) Add Comment
4 Comments
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1. Landedgentry said...
It's been part of our psyche that prices never go down, Time to slap the vested interests in the face with this 'revelation' that they can and will go down.
Who we gonna listen to? some dummie agent that left school with 2 GCSEs in Home economics and woodwork or a market guru like Mr Bernstein?
2. lvmreader said...
Mention Gold. Mention Silver. Mention any piece of information that can be shown in 2 steps or loss to affect the markets (commodities, currency, debt, credit, equity).
Damn those idiot shills who say "whatz dat got 2 doo wid Haase Prices then!"...
Such neanderthals had never even heard of the bond market.
Mention what you want.
And any stories of dead estate agents should get triple mention!
3. dave said...
There doesn't have to be a HPC...let inflation do it's work! Seen this?
http://news.bbc.co.uk/1/hi/business/7238503.stm
4. Landofconfusion said...
> 3. dave said...
>
> There doesn't have to be a HPC...let inflation do it's work! Seen this?
From what I'm reading, the BoE will have to suspend rate cuts in order to prevent run-away inflation. This in turn will keep mortgage interest rates high. Given that a lot of people are calling for rate cuts to help protect the market, I don't see how inflation can prevent a HPC at this time.
Am I missing something?