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Everything posted by alexw

  1. I just lurk nowadays but just to let you know. Corbyn called out the gov on the property bubble in his maiden conference speech - "Britain’s balance of payment deficit £100 billion last year. Loading our economy and every one of us with unsustainable debt for the future. And the shocks in world markets this summer have shown what a dangerous and fragile state the world economy is in. And how ill prepared the Tories have left us to face another crisis. It hasn’t been growing exports and a stronger manufacturing sector that have underpinned the feeble economic recovery. It’s house price inflation, asset inflation, more private debt. Unbalanced. Unsustainable. Dangerous. The real risk to economic and family security. To people who have had to stretch to take on mortgages. To people who have only kept their families afloat through relying on their credit cards, and payday loans. Fearful of how they will cope with a rise in interest rates. It’s not acceptable."
  2. Oh boy. You really don't understand economics do you? I've read a lot of your posts recently on this thread, and it seems you are posting only based on ideology not on any fundamental understanding. What do you think happens to gov spending as a proportion of GDP if you destroy 25% of the real economy? That's right it goes up. If the private sector substantially shrinks as it has in greece then the relative size of the government sector must by consequence go up. Moreover all those people made unemployed by austerity economics are now not producing anything to earn an income, and need governmental support to survive. Given that unemployment is 25% government expenditure on these individuals will collectively be substantial. Thus is you look back to 2008 you will find that gov spending as a proportion of GDP was ~50% and about 8% lower than now. So the irony is that everything you propose for greece is doing the exact opposite of what you want as an end result. Austerity economics is and has been an absolute failure. It will never ever work. Not here. Not greece. Nowhere. Bleeding the patient some more because the current level of blood loss hasn't caused the patient to revive is an absurd economic doctrine, based on ideology not on what will work. Though given your ideological fanaticism I doubt you will ever be able to admit that.
  3. ??? The green party want to build a LOT of new homes. £50Bn a year on bringing old housing up to standard and new housing - http://www.theguardian.com/environment/2014/nov/28/green-infrastructure-initiative-for-jobs If half of that goes on new homes and each house costs ~£100K to build then we are talking about an additional 250K houses per year.
  4. You are missing the point. The reason they come here is because of the differential between the UK and elsewhere in terms of income, living standards, etc. If their living standards rise so they are more similar to ours then they simply won't come over. At least not in appreciable numbers. So at that point we won't need immigration controls.
  5. There was a poll done recently by lord ashcroft which asked "If candidates from the following parties were standing in your constituency and had a chance of winning, how likely would you be to vote for them?" The greens came third after lab/con. They came above UKIP. https://yougov.co.uk/news/2014/11/20/greens-would-soar-if-voters-thought-they-could-win/ If people start voting for them they will steamroller. My own vote will be for the greens. I am pretty anti-immigration but nimbyism is a way greater problem in regards to housing (2/3 of housing demand comes from internal changes), and UKIP are nimbyism on steroids. Many of their other policies chime well with me too, such as LVT, full reserve banking, and 5 year tenancies. I also hear they are about the most democratic party out there which I like. Their policies are all voted through by their general membership.
  6. +1000. Not many understand that. That QE is (or should be) only a means to paper over the cracks and keep the system together while the imbalances are tackled. The problem is even the politicians that want QE are acting like QE is the solution. It's not and never will be.
  7. Spot on. If every boomer (or the majority) was open to building more housing, caring about the young's futures, and willing to make some modest sacrifice, etc, then the young would not have an issue with boomers. But the truth is the exact opposite. This anecdote from another thread sums it up. "....... I stood up and mentioned that as someone local with a young family, the housing would be very helpful to those of us yet to have our own property within the local area... I kid you not, they all turned round and looked at me like scum with a look of total disdain."
  8. Yeah except the boomers never gave a toss about the younger demographics. Tell me the last time you saw a boomer led campaign group going out and campaigning for housing to be built, instead of protecting their dog ******** grounds? Oh and when the boomers were in their late 20's and getting the housing built for themselves doens't count.
  9. +1 Exactly the same where i live. I had an extremely bad case of the stomach cramps last year spewing my guts up, so I went to see the doctor. The waiting room was full and 80% or so were pensioners. The rest were parents with children except for me and maybe one other. I was also visiting an elderly relative in hospital a few months ago. Every single bed I could see was filled with a pensioner. I don't know where greg gets the idea from that it's younger folk needing the healthcare. It's plain nonsense. I suspect he's trying to divert "blame".
  10. By implementing some type of tariff system against those nations with whom we are running large persistent long-term trade deficits. This is completely allowable under WTO rules. Thus we are able to force rebalancing without a crushing self-defeating depression, such as the piigs are forced to endure, as a means to rebalance their trade deficits. Of course this goes against everything the neo-liberal project stands for, which is why no mainstream party will countenance it. But on the plus side it would mightly piss off the merchantalist germans, and wreck the economic model the Germans have based their economy on. Particularly so if the piigs say enough us enough and follow suit.
  11. The generation before you walked everywhere, had no holidays, and darned their clothes when they started to fall apart. Why didn't you do that? Or were you too "good" to make do like that? Seems like you felt entitled alright - entitled to the goods and services common to that time. Just like young people today should be entitled to the goods and services common to this day and age. That includes consumer goods, cheap holidays, and yes houses. Or are you so arrogant as to believe to these should be only the preserve of boomers like yourself?
  12. Sorry. How stupid of me. We all know paying people more demoralizes the workforce. You must be jumping for joy with regards to how much wages have fall over the past 8 years, just like the rest of us, because we all *know* paying us more makes us unhappy.
  13. Except this is nonsense from everything we know about economics. We also know its true from the example of Germany. Until very recently it had no minimum wage - the result was the largest low paid sector in all of europe. For that very reason Germany has just introduced a minimum wage.
  14. Cobblers. In essence you are saying before the minimum wage employers paid more than they needed to for employees. Since when have employers been charities?
  15. I thought you were talking about a horror movie. Like chucky - the rebirth. Wait..... I guess you are talking about a horror movie.
  16. Ok you are making a couple of very big assumptions. A proper full-on house price crash will certainly lead to more than a 35% fall in house prices. Given that in any sort of crash in asset prices markets tend to overshoot, and that this is one whopper of a bubble, we can easily expect to see more than a 50% fall. This is especially true if you consider the financial state of this generation of young folk compared to those of say of 30 years ago when they first bought. The other demands on young folks income is so much greater. Don't get me wrong I want prices to crash, but given the magnitude of the falls we can expect, when it finally goes the system will not be able to absorb the sorts of losses we will see with just the capital they have. Another big question is whether the capital buffers are as good as the "tests" and the banks themselves make out. We know they still have all sorts of losses they are drip feeding out. If the buffers were as good as stated then why not just write those losses down and fully clear up your balance sheet? As for whether people will default. There seems to have been a big culture change towards this if we look at other nations. They have gone from seeing a debt as something that they should continue to pay to basically an attitude of "f**k it". I will be highly surprised if this change has not occurred here too. Given how fundamentally wrong the boe and other regulators were in the past I very much doubt they are as accurate as they are assuming with their don't worry keep calm attitude. Lastly the scenario I outlined was the worst case scenario which I don't think will happen, but would happen if the boe did not intervene to force savers to absorb the losses over the banks capital buffers. This is why savers will lose out. If the boe don't intervene in this way then we get a systemic crises were savers (and everyone else) will lose out much much more than if the boe does financial repression on savers. I see it working out in one of two ways. They will either go the bank holiday and confiscate route, or they will monitize and devalue current savings more than they already have. I think the boe will prefer the latter while the EU will be pushing for the former. At least based on precident. More than anything else I want the happy clappy "a crash will be a bed of roses" people here, to fully understand the consequences of what they want. I want it too but I unlike them understand the economic consequences which are going to be pretty horrific, and which I am certainly not looking forward to.
  17. Yes an "elephant polo champion" just oozes wealth creation. What would scotland do without this "talent"? It won't be a "successful" country for sure. Because we know passing down an estate for hundreds of years and doing sweet f***k all has made scotland the marvel of prosperity it is today..... You know sometimes I wonder how stupid people can be. But then I read some of the posts here and am reassured.
  18. No he is spot on. In a great depression MK2 as we were facing large numbers of savers would be wiped out. My mind boggles that you can somehow think that the amount of money i.e. savings can become/is disconnected from the value of assets. In a big housing crash people will default (as they have in the past) en mass on their loans as they did in spain and the US. The difference between the valuation of what the assets are worth post crash as a distressed sale by the bank, and what was lent thus ends up being taken as a loss by the bank in question. Given the magnitude of the bubble, the losses between loans vs actual post crash asset selling price would have been large. That loss has to be taken by savers of one type or another. There is noone else who can take it. Once a person has defaulted and declared bankruptcy you get next to nothing out of them. Thus the only question is whether savers take the losses by direct write-downs or by monetization of the losses and having their savings inflated away.
  19. We know exactly what happens in such a scenario from the great depression. "A bank run (also known as a run on the bank) occurs in a fractional reserve banking system when a large number of customers withdraw their deposits from a financial institution at the same time and either demand cash or transfer those funds into government bonds, precious metals or stones, or a safer institution because they believe that the financial institution is, or might become, insolvent. As a bank run progresses, it generates its own momentum, in a kind of self-fulfilling prophecy (or positive feedback loop) – as more people withdraw their deposits, the likelihood of default increases, thus triggering further withdrawals. This can destabilize the bank to the point where it runs out of cash and thus faces sudden bankruptcy.[1] A banking panic or bank panic is a financial crisis that occurs when many banks suffer runs at the same time, as people suddenly try to convert their threatened deposits into cash or try to get out of their domestic banking system altogether. A systemic banking crisis is one where all or almost all of the banking capital in a country is wiped out.[2] The resulting chain of bankruptcies can cause a long economic recession as domestic businesses and consumers are starved of capital as the domestic banking system shuts down.[3] According to U.S. Federal Reserve chairman Ben Bernanke, the Great Depression was caused by the Federal Reserve System,[4] and much of the economic damage was caused directly by bank runs.[5] The cost of cleaning up a systemic banking crisis can be huge, with fiscal costs averaging 13% of GDP and economic output losses averaging 20% of GDP for important crises from 1970 to 2007.[2]" It's not the price of the underlying asset that really matters. It's the defaults that occur as a result and what you do when that happens that matters. If house prices fall substantially a heck of a lot of people will default. We know this. Why pay your loans when the loan is vastly more than the value of the asset? The banks must take a write-down of their capital if this happens. If too many defaults occur then all their shareholder capital is wiped out and they must start wiping out the capital of their depositers. This is why people were taking their money out of NR. They feared that the bank was in bad shape and that rightly their money was at risk. Now if you start wiping out money in a bank people take fright and companies do too. If there is a smidgen of a hint that you might loose deposits then you will shift your money to a bank where it is safe or more safe or take it all out in cash. If it had been allowed to continue I like everyone else would have withdrawn cash from troubled banks. I had already taken out a couple thousand prior to the NR. If it continued I would have withdrawn nigh on every last penny in cash. I'm betting if you can find the stats you would see a lot of people were withdrawing money in 2007 not just from NR but starting to do the same from other troubled banks. Thus it becomes a self-fullfilling prophecy. The weak banks become weaker and weaker until they fail. Note also these banks hold the balances of companies for trade, etc. Once a bank fails uncontrollably as happpens in a banking panic which is the inevitable result of allowing a major bank to fail you get a lot of perverse economic effects. They call in their loans in attempt to shore up capital. They freeze all additional lending. They raise their terms on borrowers to try to bring in more money. This means companies run out of working capital, and you see lots of company bankruptcies. This causes an economic cascade. More people start taking money out of banks. They also hunker down and stop spending. More companies go bankrupt as their customer base shrinks. They also fire their workers, which reduces expenditure in the economy, and causes more loans to be defaulted on as those workers nolonger have an income. The remaining banks which were relatively strong now start to come under increasing pressure, not that there were many of them. They start to fail too. Further economic contraction occurs, as people hunker down even more, and more companies go bust or have their loans called in. So on and so forth. This is what happens in a systemic banking crisis if the banks are allowed to fail. The economy ends up liquiditaing itself in a positive feed-bank loop. This process had already started in 2007 and if not prevented would have continued until stopped or total liquidation had occurred. We know this is what happens because it's exactly what happened in the last great banking crisis - the great depression. If the crisis was smaller or localized it could have been contained by letting a few banks go. But it was way way too big to be contained in this way. Banking crisis have non-linear dynamics. The system can absorb moderate levels of failure, but past a certain point failure ends up in a cascade that brings the whole lot down. Now this is not to say we could not let house prices collapse. We can and should. But we will end up having to monetize the debt because unless you think liquidating our economy is a good thing we cannot let the contractionary cycle that would otherwise happen happen. In the great depression the fed let it happen and did not intervene in the banking liquidation. The result being mass liquidation and a shrinkage of the money supply by 1/3, and a recession turning into a great depression.
  20. Yes. You see whenever problems arise it's always the fault of socialists. So Hitler was a socialist. Stalin was a socialist. The 1%ers are socialists. The people at the bottom are socialists. The man who ran over your cat is a socialist. That guy who had an affair with your wife is a socialist. If we ever get invaded by aliens they will also be socialists from the planet "socialism" which is located somewhere in a far-away socialist galaxy.
  21. Excess savings are not a fallacy. If one region/group has excess debt then another must by consequence have excess savings. Since debt and savings are the mirror image of one another, one cannot exist without the other also existing. The argument you are putting forward is like saying it's possible to have a coin with only one side on it and that side is heads - something that we all know is an impossibility. P.S. Germany has done crap in terms of investment as a % of GDP compared to the past, don't confuse merchantalist advantage with investment - they are not the same. <a href='http://www.tradingeconomics.com/germany/investment-as-percent-of-gdp-imf-data.html?embed' target='_blank'> <img src='http://www.tradingeconomics.com/charts/germany-investment-as-percent-of-gdp-imf-data.png?s=%2fgermany%2finvestment-as-percent-of-gdp-imf-data.html&d1=19800101&d2=20151231&type=line' /> <br />tradingeconomics.com</a>
  22. I would prefer to see more building, but if the nimby's truly believe there is a shortage of land then what we really need is a better allocation of housing. Thus I would be open to a bedroom tax being implimented so that your council tax doubles for each empty bedroom you have if you are not within child-rearing age (i.e. are over 45). I'm sure the nimby's would be completely supportive of such a proposal given that it would protect the environment, and stop the UK being "concreted over".
  23. Either way its still a corporate subsidy. Not too long ago McDonalds got caught with a "how to claim foodstamps" helpline. Something similar happened with walmart I believe. http://www.bloomberg.com/news/2013-11-13/how-mcdonald-s-and-wal-mart-became-welfare-queens.html We need wages to be forced upwards, housing costs downwards, and then we can disband the tax credits system completely. We should not be susidizing the incomes of corporates, 1%ers, and parasitic landlords.
  24. Ahh so what you are actually after is not choice or any of that other nonsense then is it? But to have it rationed based on incomes. So basically what the US had pre-obamacare. Ergo the bottom 30% more or less have none, the next 40% some, the next 20% quite a bit, and the top 10% have top notch healthcare. Don't you think it's better to ration healthcare on cost vs outcomes? So instead of spending £1 million to keep some wealthy 80 year old alive for a year longer, to spend that on saving the lives of a group of 30 somethings?
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