Friday, Jun 13, 2008
Keep clicking and praying!
Irish Referendum - official website: Referendum results
Just for fun, totally o/t, I know, I know.
Posted by mark wadsworth @ 01:55 PM (497 views) Add Comment
9 Comments
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1. another alan said...
It's this b.s. that knocks the good stuff off the front page!
And by good stuff I of course mean my comments! (Just messing).
Whilst I've hijacked the comments part here I want to repost what I said on an earlier article (the Stephen Nickell one).
Regarding the crash predictions that many people - academics, analysts etc - made and did not come true until now, it is difficult to judge them harshily. The crash has been ripe for sometime, and these people would have been right (i.e. a crash a few years ago) were it not for (1) the utter irresponsibility of lenders (125%mortgages, 6 times salary etc)
(2) fraud
(3) greed (mortgage brokers, btl, property as way of making easy money, financial companies slicing and repackaging mortgages etc)
(4) the media... Allsop Location Location Location etc
These factors put it off for a few years, and have made the crash much worse than it was going to be.
(Totally different to the 10xsalary predictions of just a few months ago in their inaccuracy)
DO NOT BUY FOR AT LEAST 18 MONTHS. (Two years, really).
Anyone any comments/opinions?
2. mark wadsworth said...
AA, one thing we know is that house prices are crashing, that's easy. We do not know how far prices will fall, or for how long. The other thing that we know is that sentiment turns very quicly at the top of the market, there is a recognisable peak (let's say Q42007 - even if recognisable only in hindsight), but the bottom of the market is typified by a long period* where house prices are flat. So whether you buy in 18 months or 36 won't make much difference.
* e.g. house prices were within a range of +/- 5% between 1993 and 1996, there wasn't much to be gained or lost by buying earlier or later. Or looking further back, between 1955 and 1970, when we still had domestic rates and/or Schedule A taxation (a crude form of land value taxation) and governments were encouraging house building.
I have a pretty graph showing peaks and valleys since 1948 on my blog.
3. Another Alan said...
I think you are right re: the trough. I think that it will take time to get there (min 18 months, hence my DO NOT BUY FOR AT LEAST warning...).
Although as often demonstrated, predictions often make us look foolish. (My point above, in relation to the other article, is that people who made previous hpc predictions could not have expected the extent of irresponsible lending, fraud etc...) Just ask Stephen Nickell!
4. another alan said...
I think you are right re: the trough. I think that it will take time to get there (min 18 months, hence my DO NOT BUY FOR AT LEAST warning...).
Although as often demonstrated, predictions often make us look foolish. (My point above, in relation to the other article, is that people who made previous hpc predictions could not have expected the extent of irresponsible lending, fraud etc...) Just ask Stephen Nickell!
5. mark wadsworth said...
I despise Nickell.
Short term forecasts are dumb, long term forecasts are easy.
If you look at that chart of prices-to-earnings, it is quite clear that prices move in a range between 4 and 7 (or whatever) and that they go in 18-year-ish cycles. Fred Harrison reckons that these cycles go much much further back than that (centuries even), and he's the expert.
So, will the trough be from 2009 to 2011? From 2010 to 2015? I have no idea, but we'll know we're in a trough (good time to buy!) when we get there. And prices will reach a stage where it doesn't matter if they fall another 5% per year.
For example - I bought a flat in East London for £32k back in 1995. Would I have given a shit if it fell 10% in value over the next two years?
Answer - no - I would have 'lost' £3,200, or £30 a week. At the time, £30 a week was less than the difference between a 100% mortgage (say £43 a week at 7%) and renting (£80-plus a week they were paying for the flat next door).
6. cornishman said...
"£30 a week was less than the difference between a 100% mortgage (say £43 a week at 7%) and renting (£80-plus a week they were paying for the flat next door)."
- makes you realise how upside down things have become recently.
7. planning4acrash said...
Makes you realise how much the BOE has inflated/devalued our currency over that time. I heard that the Dollar has been devalued 95% last century! It has fallen close to 50% against the Euro since the Euro was introduced.
8. Hm said...
How do you define a crash
A common definition is 15% year on year fall, excuse me but this hasn't happened.
HM
9. it_is_going_with_a_bang said...
I will make one commen on the article....
Looking at all those "policiticans" who said there was no plan B or C etc. and that this is a must vote etc. to bascically put pressure on the only 'people' allowed to have a vote, anyone who was dubious about whether a yes or no was right, must be thinking definitely NO by now. The attitude of european policitians is now one of 'it doesnt matter' what the Irish think lets just press ahead anyway.
The one thing I can't stand is politicians who say one thing and then when events don't go their way immediately take a different stance. No credibility what so ever = NO Vote.