Friday, Nov 28, 2008
Yikes. Even the Yanks think we're screwed
International Herald-Tribune: A dilemma in British housing
It's looking as if the fall in British house prices will be further than expected. Britons simply do not save enough to supply their banks with enough to lend to fund the debt requirement implied by their housing prices.
You have to wonder which potential house buyer is out there who a) is a good credit risk b) has a 20% down payment c) is willing to buy an asset depreciating at 2% a month.
Bank liabilities in the US amount to 20% of the size of the economy. In Britain, the figure is 285%.
Ask yourself then what might happen to Britain.
Posted by little professor @ 12:19 AM (1456 views) Add Comment
10 Comments
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1. titaniccaptain said...
I wish someone could explain this to our Prime Minister and Chancellor so that we can get on with life..............
2. gardeniadotnet said...
"the world will have more than it can handle of pound-denominated British government risk in the coming years"
We're becoming a real presence on the world stage again.
Makes me kinda proud to be British.
Altogether now.... "Land of Hope and Glory...."
3. matt_the_hat said...
"Bank liabilities in the United States are about 20 percent of the size of the economy. In Britain, the figure is 285 percent"
sounds like another Iceland to me
4. bystander said...
Not quite as bad as Iceland. their bank liabilities compared to the size of the economy were 800%, but thats not to say you have to question GB's ability to run a country's finances and now a country. Of topic a little, but did anyone catch GB on the news yesterday talking about the atrocity in Mumbai? I quote: "I think I speak for the whole world............". The man is totally arrogant, he shouldn't even be able to speak for the UK, but to say he speaks for the whole world, it beggars belief, that he thinks he is that important. I didn't hear a single other leader "speak for the whole world".
5. plato said...
When you compare property prices, it is very easy to see the level reached in the UK is nothing less than ridiculous....and if we are talking about something with no real basis or justification this is an excellent example. These prices were the product of pure greed,selfishness and delusion. Even the Americans - the masters of illusion - can see the problem we have created here. It is time to be realistic again.
bystander....... A good example of delusion.
6. gardeniadotnet said...
"Federal Deposit Insurance Corp"
I've seen that name somewhere before.
Hang on, I'll be back in a sec.
7. gardeniadotnet said...
I can never remember where I left things. Anyway, I've found it now...
8. Daintydiana said...
Thanks Gardenia. What a graph!!!
9. quiet guy said...
"you have to wonder which buy-to-rent investor or potential home buyer is out there who a) is a good risk, b) possesses a 20 percent down payment and c) is willing to buy an asset that is losing 2 percent of its value a month."
Step forward suckers.
10. stillthinking said...
The ultimate humiliation. Yankee doodles pointing out how shafted we are.