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Average Joe

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About Average Joe

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  1. Blimey its been a while since I posted! This seemed an appropriate thread. My views have certainly changed over the years but only in that I have learnt more about what is going on. In 07 and 08 when things went pop I was surprised at just the lengths the government went to to keep things going. In fact I was shocked. But they bailed everyone out and pumped a lot in and bingo....problem solved.....i think not! This is just a temporary bull trap, but yes I was surprised they (the government) could achieve such a thing. Another thing I learnt is how little restraint people have when it comes to debt, particularly to buy houses.....basically if the banks are offering it the people will take it, even if the risks to themsleves are huge. So assuming there is always a demand for credit, all the gov have to do is get the banks to lend it. They've done okay so far but only because they (and thus we the tax payer) have agreed to underwrite it all and buy all the old cr@p still on the books! The banks also know its a PR game so have to be seen to be doing their bit. But with bankruptcy being made so easy there is huge sums of cash the banks will never see. This I feel has now caused a huge imbalance in how, why, and when cash is loaned to consumers, the banks are trying desperately to bring the loan criteria in line with the real risk.....although this is impossible because the banks know with a recession likely to get worse, easy bankruptcy (debt write off) and house prices certainly not rising, the best commercial decision to make is to batton down the hatches and not lend... gordon brown says NO.....U MUST LEND! All we can do now is await the inevitable end game.....governments cannot prop up banks (and consumers forever), but low interest rates are keeping a lot of BTL in business and giving a windfall to many heavily indebted home owners (with lower monthly payments). I guess the question is when interest rates will rise.....but then can the gov keep them low as long as the economy is slugglish...can it be that easy to control? This is one i'm still thinking about......what will cause IR's to rise? I think this summer the VI's have done a great job of spinning even the smallest glimmer of good news, but during winter reality will set in. unemployment will rise, QE will reach its limit and end, and the declines in property will continue, mainly caused by new build firms (barrat, persimmon etc) realising that starting new builds of moth balled sites was a big mistake....government intervention will no longer be as readily available and there cash flows will be hit by early next year, with the knock on effect to the rest of the housing market / economy. Another thing i'm keeping an eye on is supermarkets...so far immune to the recession (with the ability to quickly change stock to cheaper goods) but there resilliance also proves people still have considerable confidence to spend....once the supermarkets are in decline this will be a huge indicator of economic downturn. Although after these last few years I am still trying to understand it all!!
  2. this may explain things : http://www.dailyexpressproperty.co.uk/ I cant believe their an estate agent.....should be a law against this kind of rubbish.
  3. this just shows Browns fixed inflation stats for what they are...until recently we've had huge amounts of cash injected into the economy via cheap credit yet had no effect on inflation due to the selective goods in the cpi basket, now he has they cheek to say if pay increases too high it will have a huge effect on inflation... selling this on to the sheeple as higher 'mortgage rates' whatever they are.....spin spin spin...as usual.
  4. its turning into a party political broadcast for Krusty! its a mix of stuff filmed summer 06, summer 07 and then looks like credit crunch stuff filmed more recently. Desparation.
  5. This guy could be on for taking Krustys crown! this also from the blog on his site:" "Martin's Blog W/C 19th May 2008 It's only Thursday and I've already had another busy and exciting week. Monday 19th May Monday I was filming in Liverpool for the latest series of Homes Under The Hammer. It's interesting that at the auction the properties we were filming came from, only 6 out of over 50 properties sold. That could be due to a variety of things from nervousness of the non-professional investors who had started to frequent the auctions, to unrealistic expectations and reserve prices from sellers. Either way, it's an indication of the interesting times we are in at the moment and confirmation of the need, now more than ever, for good advice - like what I aim to give."
  6. HBOS sells 13 per cent stake in Rightmove as agents feel the heat http://www.independent.co.uk/news/business...eat-830002.html
  7. Well at least gordys played his hand at last, we all knew he had to have something planned and finally here it is. I don’t think he had much of a choice, as soon as he led us down this path to such a huge debt and house bubble he’s forced to save the banks even if the downside risks to the whole economy are huge.... he cant let banks go bust as the consequences lead to very bad places. I think this move has saved the whole system but will not stave off a hpc. I think his meeting with the bankers was carefully planned as he had to be seen to keep the voters happy, ie. Not bailing out the rich bankers and their bonuses, so he’s making shareholders stump up too. This ‘appearance’ to be helping is the best he can do in terms of public perception...and the same reasons the tories have to follow.....because they both have to be seen to be wanting to do something even if it is all smoke and mirrors (as usual!). I don’t see how house prices can rise again tho. As soon as the game is up as far as making sub prime loans appear AAA plus investments the whole background machinery to the way in which a mortgage is given has changed. So the government now buy the crappy mortgages.......for how long.......my guess would be the banks will now be much more regulated....even is they are’nt, what banks are gonna wanna lend recklessly any time in the near future. The only way house prices can stay high is for there to be significant amounts of 100% interest only and buy to let mortgages freely available. I think the boe will not exchange such mortgages for bonds in future. The need for tighter regs has been given much publicity lately and i think this is what will happen. The banks don’t take risks and i cant see how anyone, including the government, will touch any future subprime lending, and certainly no investors will want to touch them for a very long time. The government has been forced to save the system via buying crappy loans that no one else wants.....loans that have already been made. I do not think they will take any future ones (unless they have been lent sensibly) and this will be made clear to the bankers. With no one to buy the future loans, and banks that run a mile from risk.......you’ve got yourself a hpc, as oppose to complete meltdown.
  8. i agree in some resects that he can only be judged once we've seen how this thing is gonna play out, however he's made it very clear that he's going for the borrow borrow borrow and spend spend spend ideology to keep the economy going. Long term this simply cannot be sustained and is, in my opinion, very far from prudent. If he was really prudent and concerned about the long term he'd of not helped engineer the biggest credit and house bubble in history, merely to gain a short term feel good factor throughout the country and a nice boost to the economy. Also he seem to take credit for all the good in the economy and blame other countries for things that go wrong (when he helped put us in a very risky position in the first place). But he also knows that voters know a few basic things....like low inflation good....low interest rates good, so he just keeps saying those things...over and over and over! interest rates and inflation are now just a PR tool at his disposal. What is clear tho is that the battlelines have been drawn. He's gonna try and carry on this bubble as long as he can and plaster over the gaps that will appear (northern rock, unfavourable inflation figs etc). He'll have to be very clever to do this as he'll need to get the banks to take ever greater risks, risks i'm hoping they will not be prepared to take...although pretty much sending them the signal that he will print them as much money as they want is clearly a good start for him! will they play ball.....who knows. I bloody well hope not!
  9. so lets recap : morgan- browns soooo good we have nice low interest rates so you should all be happy with the money you made (did'nt you get the sack) kennedy - convert empty buildings in city centers to more flats (cheers charlie, you wanna run that by vince) krusty - if you get rich you wanna live in london. nice tip. (words cannot describe the pain you bring in my life) blears - build build build...and keep building. (just leave....please for everyones sake just leave....leave now....go!) patten - things in the world economy are going tits up (getting warmer)
  10. Is it different this time? i hope so, and do think the crash is still on. I think theres alot to take from todays decision tho. Firstly i think its now fully evident that the boe bases their decisions on short term forcasts / events. They have done this all along, at any time interest rates have changed in the last few years its been on the back of short term data or "suprises" to the economy; spike in oil price, northern rock, weak / strong consumer spending or house prices up/down in the month they make the change to rates. Shocks to the economy now have a big impact on UK plc because we are in such a vulnerable position with too much debt and easy cash pumped into economy (so boe are basically forced to take a short term view). I dont think they have any clue about the medium or long term. They just act on information they have now that will have an immediate effect (they hope). So I guess the next few months in unknown territory again. BOE are making decisons on a wing and a prayer based on short term problems. If they'd really been targetting inflation 2 years ago (based on a fair inflation measure) we would be in a much better postion today. The thing is tho i think if theres money to lend people will borrow it, so its up to the banks, and that does look to be going the way of no more lending to subprime or btl with no deposit. So that in itself wipes out a huge number of players from the market. Secondly i think we are as vulnerable as ever to those "shocks" i mentioned earlier. We all know inflation can be stoked up pretty quickly, thus i dont think the governments medium / long term forcasts are worth much. I think we need a couple more big shocks to the economy before a crash will materialise. If we dont get them soon it could go either way, although the effect of tightening lending criteria and how much they actually tighten will be the one to watch. The boe is now a bit of a farce, interest rates nowadays seem to be more of a PR tool to generate positive newaspaper headlines, evident by LIBOR and the banks interest rates moving away from that set by BOE. Banks want two things...no risk....lots of profit. They dont care about anything else. Hopefully this should mean a significant tightening in lending. I think boe will continue to make short term decions for as long as they can keep the party rolling on. So far they have been able to deal with each situation separetly eg. rising inflation they raise, weak house prices they cut. A shock to the economy such as oil continuing up creating unforcast inflation, combined with lower house price / consumer spending, will leave them in a no win situation. Thats the end game. Basically we need some more bad economic news to finally put a lid on this thing! All these factors make chances of a crash much more likely than not. I'm getting sick of waiting tho!
  11. todays paper http://www.mirror.co.uk/news/topstories/20...89520-20182764/ this is an article from 2005 http://www.mirror.co.uk/news/topstories/tm...-name_page.html are things different in 2007? i bloody well hope so! credit crunch anyone
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