Thursday, Jun 11, 2009
Oddly prophetic
New Statesman: Coming soon: the new poor
Ignore the date when the article was written, just have a quick read. Now repeat after me: "no-one saw it coming" - it was a "'Black Swan' event".
Posted by paul @ 10:54 PM (887 views) Add Comment
10 Comments
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1. enuii said...
Article concludes back in 2003:-
'What can be done now? Governments should take back the responsibilities they have given up. First, they should again regulate capital flows between nations, as happened in 1944, when the last "globalisation" experiment was still fresh in the public mind. That had created the great credit bubble that led to the crash of 1929 and the Great Depression.'
'Second, they should rein in "easy money" through increased regulation of savings, lending and borrowing. Finally, governments and central bankers should not pass on to heroic if gullible borrowers and consumers the huge costs of the crisis they have created. In other words, they should make provision for losses and bankruptcies resulting from their policies, and must bail out the consumers, pensioners and corporate bodies that will be the victims. Yes, this will increase public spending. But the burden should not fall on middle-income taxpayers. The rich should be made to share some of the extraordinary wealth they have acquired over these past two decades.'
It's going to plan for the banks then as politicians stick their fingers up to the gullible borrowers and consumers who haven't quite twigged it yet.
2. drewster said...
I read this article back in 2003. It was articles like this which dissuaded me from buying a house. Frankly I wish I had bought in 2003; I might be barely breaking even, but at least I'd have had a house of my own for the past six years.
3. quiet guy said...
"I wish I had bought in 2003"
Yes, it might have made sense to join the debt party. Irritating.
4. d'oh said...
drewster @ 2 - I did the same thing. Crazy isn't it? Even back then the debt situation was getting out of hand and house prices were soaring into unreasonable territory. Who would have thought that our "masters" would have been so irresponsible as to let it get as out of hand as it did. I was sure it was going to topple in 2005, but they managed to keep the balls in the air for another 2 years. Now, think how reasonable 2003 house prices sound to 2007 house prices. That thought is what underlines just how screwed up the whole system is at present.
5. bellwether said...
Back in 2003 I sensed the rises were not sustainable but hadn't thought too closely about it and indeed bought in 2003. This had practical benefits as I didn't sell until summer 2007 and got most of the rise.
I wouldn't have been able to do this if I had fixated on every news article and a sense of being right. Property moves on a very slow timeline and the warning signs as to whether we are in an up or down cycle are pretty much impossible to miss.
For this reason I think the downleg will play out over a long period of time and I have no intention of buying until I can get something I want at a fair price. This might of course be before the market bottoms.
I think paying too much attention to the monthly movements is therefore a waste of energy and actually becomes misleading. It becomes like ocd.
6. britishblue said...
To join the party I was another who sold in 2003. I think bellweather @5 sums it up, 'For this reason I think the downleg will play out over a long period.'
It looks like we are going to have a little bounce followed by a second leg down. It might be this very bounce and then downleg that changes the mood of the media and confines the Anne Ashworth's of The Times to history and turns the general public against the media spinners.
It will only when the general public view house prices on the basis that they will never go up (as was the case in the mid ninetees) that we will be close to reaching a bottom.
7. mander said...
Create unlimited amount of money in the name democracy and freedom so the rich get richer by doing exactly nothing: Having their assets inflated. Now that the problem has been indentified and stupid working people understand more what is going on the Governments do exactly the opposite by taking the money from the poor to save the rich inflated asset prices.
I foresee one more French revolution in 10 years time.
8. need-a-crash said...
@6. Britishblue - I remember when my sister bought in 2000 everyone was telling her that after 4yrs of moderate house price increases she'd better be careful as the cycle could turn at any moment, so fresh in people's minds was the 90's crash.
As you say it's attitudes like this that will mark the time to buy.
Although I do feel sorry for people who could've bought in 2003. Just goes to show how badly governed we have been. I suppose at least I can say I've never been able to afford to buy, so have that small comfort!
9. inbreda said...
I did the same as bb @6. However - I didn't just sell to take the profit - I did it because I wanted to go travelling and didn't want to be tied down in any way (particularly with a rental property back home!)
I agree with @5. It was obvious that prices were inflating too fast way back in 2003, and although there clearly wasn't a need to rush back then, I would say that 5 years too early is still better than a day too late. There are people who put their houses up for sale in July 2007 that still have them on the market and are seeing the value go down day by day. The odd blip in the data may give them some temporary respite, but as we all seem to agree - this aint gonna be over by lunchtime!
10. bluebeach said...
Hi all, back on board after a lengthy layoff..... fools will rush in over the summer, dust will settle and debt will become apparent...