Sunday, Feb 10, 2008
When the sunday papers predict a crash you know it is going to happen
Guardian/Observer: Atlantic drift: will UK housing market follow America into a slump?
We all know there are no fundamentals underpinning UK house prices, just psychology and greed."growing evidence that UK housing market is already slowing sharply. Prices have slipped for 3 consecutive months and repossessions were already at a 14-year high in 2007. In the US, early in 2007, analysts were puzzled that the fallout from sliding prices did not appear to be hitting consumer spending or jobs, and Ben Bernanke remarked in the spring that he thought the problem was 'largely contained'. Less than 6 months later mortgage defaults sparked a financial crisis; by the end of the year, joblessness was rising. In other words, a housing market downturn can itself sow the seeds of a broader economic downturn - especially if it has been pepped up by an outbreak of profligate lending"
6 Comments
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1. geed said...
What are we to take out of this...
In the US, early in 2007, analysts were puzzled that the fallout from sliding prices did not appear to be hitting consumer spending or jobs, and Ben Bernanke remarked in the spring that he thought the problem was 'largely contained'.
He got it totally WWWWRRRROOOOONNNNNNGGGG!
Alistair Darling played down the risks of the credit crunch to housing and the UK economy in a speech to manufacturers' body the EEF last week. 'Housing market conditions today are very different to those we saw in the early Nineties,' he said. 'Interest rates remain at comparatively low levels - as do mortgage rates. And unemployment is currently at a 30-year low.' Darling added that lenders on this side of the Atlantic have been 'more responsible in taking account of an individual's ability to pay'.
He will also get it totally WWWWRRRROOOOONNNNNNGGGG!
They both no nothing of the future.
2. Crazyamj said...
"Alistair Darling played down the risks of the credit crunch to housing and the UK economy in a speech to manufacturers' body the EEF last week. 'Housing market conditions today are very different to those we saw in the early Nineties"
Yes, i also think they are different, just a bigger bubble, people more indebted, that's the fundamental difference, in my humble opinion of course
..
3. crash bandicoot said...
This time last year we were the loonies - posting exactly this kind of thing. Now it is regularly in the mainstream press, but still the crash has not fully started. We are still in a state of NIMBY denial - "well I know that houses are overpriced but MY house is different" (perhaps it is in York or Warrington). The period of stagnation will end as reality sinks in then the crash will begin in earnest.
4. Orwell said...
"...The housing boom, fuelled by reckless lending, began to turn to bust more than two years ago; but only toward the end of last year did unemployment begin to rise..."
And The Times today say that 2/5 of employers are predicitng shedding staff?
5. Landedgentry said...
There is denial at the moment, but that will evaporate soon when the stampede for exit begins.
6. doomwatch said...
But, but, Anne Ashworth said last week in the Sunday Murdoch, that all is well. Will all recent buyers
encouraged by Anne's continual propaganda feel a little upset right now ?