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House Price Crash Forum


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Everything posted by Methinkshe

  1. Anyone who is wiser please correct me, but it seems to me that we are beginning to see the domino effect in action....first the weak banks, then the middling, and finally even the best banks will fail due to the devalueng of assets brought about by necessitated fire sales from the weak banks. Or is this too simplistic a view.... Goodness, we live in confusing times.........! The only way I can visulaise the current situation is in terms of trapeze artists (interbank lending) which so long as all the trapeze artists' flights end up in a safe landing, the momentum continues, but once a single trapeze artist falls, the whole act disintegrates. The interdependency is truly frighhtening....
  2. Could anyone with a better brain than I answer my tentative plea in an earlier post on this thread that if the Gulf States decouple from the dollar, oil prices will fall. Or have I got it totally wrong?
  3. Just another way (as if there were not already enough) of extracting money from the frugal to pay for the feckless.
  4. I'm inclined to agree with you - at least, for the moment - because no country with significant financial assets can afford to allow runaway inflation for any length of time. It's all very well for countries like Zimbabwe, but it would be suicide for the Uk or US. BUT....I can't quite get out of my head the potential for an unstoppable inflation triggered by short-termism on the part of unprincipled governments who will do anything to stay in office. I have to admit to being swayed one way and then the other (hyperinflation/deflation) as fast as I read apposite posts/books/articles etc. - what a fence-sitter! However much I try to come down firmly on one side of the fence or the other, there's always an: ah, but what if.... that prevents me from drawing a conclusion.
  5. If Gulf States drop dollar peg, then oil prices should plummet......shouldn't they?
  6. I'd very much like to think that would be the case and that he would retire to safe oblivion. However, I'd bet a few hundred quid that he'll end up as the first President of Europe and that it's already a done deal - arranged behind closed doors in return for reneging on his promise to hold a referendum on the Euroepean Constitution and instead railroading it through Parliament by whatever means necessary.
  7. They will use the government to force people to borrow. In a way, this is what student loans are all about - a forced borrowing. Can you think of any other examples of forced borrowing? BTW I have advised all my children NOT to go to university if it means they have to take out a student loan on the basis that they will enslave themselves to whatever government is in office, and to any variations on the loan agreement that any government chooses to inflict.
  8. Surreptitious inflation will serve a government well. There are many indications that this is what we are already experiencing. Spin the headline inflation rate while at the same time inflate away behind the scenes. But this is only a short term solution because sooner or later no-one will believe the headline inflation rates (we, here, already disbelieve them). At that point inflation will come roaring in like a tidal wave - it will be unstoppable. It's all about sentiment.......sooner or later the herd will stampede. Our job is to stay a few steps ahead of herd sentiment.
  9. Once sentiment has turned (which it has) in favour of saving rather than borrowing, even zero interest rates will not persuade people to borrow. And you cannot pay people to borrow money in an attempt to reliquify a credit averse population - witness Japan. Lower interest rates will do nothing - they are the wrong solution to the wrong problem. The only hope of getting out of this mess, as far as I can tell, is tightening belts a whole lot more than would have been necessary if Gordon hadn't engineered a "no more bust" economy. Recessions are the necessary counter-balance to excessive debt. By putting off the day of reckoning all that Gordon has done is ensure that the denouement will be 10 times worse than it might have been. Debt has to be repaid, i.e. deflation, or inflated away. I'm beginning to incline towards inflation because any government that allows deflation is as good committing suicide when the electorate is as financially unwashed as is presently the case. And I no longer believe that our government is principled such that they will do they right thing even though the right thing risks being voted out of office. Holding on to power seems to be far more important to this lot than doing what is right for the country.
  10. I'm not sure what to read into it, but three of my four credit card suppliers have just raised my credit limits - Natwest, Virgin and Barclaycard. I now have far more credit available than I have ever used and am ever likely to use.
  11. Exactly so! This is their first testing and they are not exactly performing well under pressure. What the fallout will be is anyone's guess, as is what the powers-that-be will do to get the world out of the financial mess it seems to be heading for. I used to think that the only way to solve a global financial cirsis would be to remonetize gold but now I'm not so sure. I wonder whether the stage is not now set for a global fiat currency as being the only solution to a global problem. In my mind it all links in with the global climate warming crisis (which I personally believe has been totally overblown). I'm looking out for the formation of a global supra-government under the guise of solving the climate crisis, the financial crisis and any other global problem such as terrorism. Only it won't appear as a supra-government, just act like one, if we aren't already there behind closed doors. Conspiracy theory? I don't think so, but I'm sure the accusation will be levelled at me by some.
  12. I'm afraid that I cannot rule out the possibility of a global financial meltdown, any more than I would rule out the possibility that once in a while, aeroplanes crash. The global inter connectedness of finance is what is most troublesome - there is no way that any one country can insulate itself from what is occurring on the global stage. Also, we have never been here before - derivatives, SIVs, CDOs and the like are all relatively new financial instruments that have yet to be tested in the event of a serious global economic downturn. I'm inclined to believe that they won't stand up to much testing. The potential for a domino effect to take down good financial institutions along with the bad seems all too likely to me. Personally I am hoping for the best but preparing for the worst. In short, I incline more to Anders pov than S.S's.
  13. ....or whether Uncle Sam can afford to pay maintenance for all his ******* children. Edit: ******* got censored - can't think why. "Children outside of marriage," then. Further Edit: just testing censorship. ****** ****** ****** **** **** **** Okay, fair enough.
  14. I'd be really interested to hear how people think the internet and rapid dissemination of information will affect a HPC this time in a way that is different from the 1989 crash.
  15. It's different this time (when applied to bubbles)
  16. Ah, Esher! I was born in Farncombe, nr Godalming, moved to Cranleigh and thence to Worthing via Bognor and all before the age of 12 yrs. I wonder what has happened to the two houses my father built in the 1940s - one for his aged parents and one for himself and his new wife - my mother. Nursery Road, Farncombe. My father's father was mayor of Godalming and then got caught up in the great depression - lost all his money - they had a timber mill - Gridley and Spring or something like that. Which is why my father ended up building (or causing to be built) a house for his elederly parents. He died in 2001 age 92. The memory of the 1929 crash still lives on in my family history.
  17. The following is the only paragraph that I could find that mentions the housing market. "Despite buoyant activity in recent years, strong inward migration has contributed to an easing in labour market tightness. Although the unemployment rate has crept up over the past two years, particularly among young unskilled school-leavers, it is still relatively low at around 5½ per cent. Consumer price inflation temporarily spiked to just above 3% earlier this year, partly because of unusually large increases in electricity and gas prices, but has since dropped back to just under 2%. Looking ahead, the interest rate increases over the last year, together with recent financial market volatility, are expected to slow the housing market. Prior to the recent financial market turmoil the OECD projected growth of 2¾ per cent this year and 2½ per cent next year, with inflation remaining close to the 2% target. However, although indicators of economic activity have been robust in 2007 to date, there is now a risk that growth will be weaker going forward, which could imply a need for interest rate reductions. A slowing in growth, together with reduced profitability in the City, could also reduce tax revenues and imply a rise in the budget deficit, which is still relatively high by international comparison." Judging by the tail end of the conversation I picked up on Radio Five, one would have thought that the OECD had a lot more to say about the Housing Market than that. Perhaps it was because the person being interviewed was herself from the OECD and was elaborating. Ah, well....
  18. Listening to a US soldier speak about his experience in Iraq, one cannot help but sympathise with the psychological bafflement he felt at the attitude of the enemy - they really WANTED to die. It's a whole new game when the enemy is as committed to dying as his opponent is to preserving his life - and the lives of his troops and even the lives of enemy civilians. Judaeo/Christian tradition cannot and will not ever match that, therefore J/C societies are at a huge disadvantage when it comes to conventional warfare. The whole approach to warfare must change to accommodate such a paradigm. If people not only don't mind, but actively WANT to die, then warfare as we have traditionally understood it is irrelevant. It would be much more effective to look at ways of disabling societies through terrorist attacks on infrastructure. Bring a country to its knees economically and the battle is won. The only way forward is to match terrorism with terrorism - horrific as that sounds.
  19. I bought 1982 for £30,000 Sold 1988 for £160,000 with OPP for Nursing Home My buyer sold 1989 for £90,000 - he'd overstretched his finances.
  20. Thanks. Got through to OECD website but couldn't find the relevant part, There's a link for economic surveys which, when you get there, says that the next UK economic survey is due to be published 27th September - but it isn't there. I think that may be where they talk about housing market. Perhaps it has not yet been uploaded.
  21. Just caught a snatch of conversation concerning this report on R Five Live. Talking about outlook for UK Housing Market. Have tried to find report on OECD website but can't. The gist of the conversation was that there have been some fundamental changes in the UK economy and housing market as a result of financial turmoil and the outlook for UK plc ain't as rosy as was formerly predicted. Perhaps a more competent Internet practitioner can find the report.
  22. I think he could call an election this year - Labour are already gearing up for it, just in case Gordon gives the go-ahead. He's a good way ahead in the polls, he'd definitely wrong-foot the Tories and he cannot be certain that more bad news won't have spoilt his chances by 2008/9. I have this delicious thought that he'll set an elcetion date late October or early November and a few days before there will a massive stock market crash and he won't be able to postone the elction. EDIT: Don't forget, October is the best month for crashes!
  23. Inside Today's Dealing Rooms Inside Today's Dealing Rooms "If you haven't been in a bank or other financial institution's dealing room lately, let me describe it to you. Banks of flat panel screens. Dozens of young males and females intently staring into them. Banks of telephones, but interdealer voice brokers? Fuggetaboutit, video killed the radio queen. Human contact, for contextual depth and balance? Blip. Blikp. Blkpid. Most of the denizens were hardly out of diapers when the last "major" crash in US markets happened. To them it's textbook lore and 1929 is the number that comes before 1930 and after 1928. Assuming they can count that high without a calculator. They grew up with video games, so flat panels with continuously updated charts and technicals are as essential to "finance" as water is to fish. Take them away from their screens during trading hours and they experience severe withdrawal symptoms. Further, they have been conditioned to shoot first and ask later. They are thus all prime fodder for self-fulfilling market manipulation operations. Their "opinions" last nanoseconds, varying blip by blip. A long term view is measured in minutes. News? If it ain't on a screen it didn't happen. Reading material? Research? Historical perspective - parallels, even??? PUH-leease. The BlackBox baby, that's today's financial guru and all you need to know. Everyone is balanced on the edge of a very sharp knife. And so is the global financial system. Someone please go tell their boss's boss what "critical system" means."
  24. My experience was similar. It is likely that a crash could have been avoided if no warning had been given of ending of MIRAS and it had just been announced on Budget Day as a done deal. As others have said, it was the advance warning that accelerated HPI drawing in loads of buyers who would otherwise have waited. By the time the change was introduced there were no buyers left. The market just stalled and then nose-dived.
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