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House Price Crash Forum

Wiseman

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  1. Maybe it is a good way of comparing between generations but it doesn't mean anything else. For example in London house prices have been roughly flat. Imagine you could have bought a house for 100k three years ago and now it would be worth 100k. That is a 8% real fall. But is the buyer in negative equity? No. Would an owner be better off selling than buying back later? No. Are real prices important? No. Even better is if the house went from 100k to 104k. Ie a 4% rise in nominal prices and a 4% real fall. A FTB with a 5% deposit nearly doubles their money even though there is a 'real fall in house prices'. Real prices are irrelevant. It is nominal ones that count!
  2. I think you will find stagnation is normal and house price falls are unusual. Reading US articles they talk about how the average US house price has never fallen. They then point out that some markets do fall, but that is mostly California in the 90's or special situations like Boston after the dotcom boom or Houston when the oil price crashed. The falls in the UK 15 years ago were quite unusual. It is not the norm, so I wouldn't expect this to happen again. (Of course real prices do/will fall, but that doesn't count if you have a mortgage). It wont give an FTB any excuse not to buy.
  3. Why shouldn't they get their deposits back? I can't see why they should get kicked out at all. If the place wasn't damaged what right has the ll to keep the deposit?
  4. Before I worked in the city all I heard was about young yuppies driving porsches, earning millions and snorting coke in the toilets. The reality is very different. Most work their **** off, in 6:30 to 7:30 a day, eat at your desk, not stop noise and decisions and get an early night. They are not party animals more like overstressed geeks. Most are A+ students who worked their **** off at University. 75% of junior traders don't make it and get kicked off the floor after the first few years. Once you are forty you are burnt out. At the end of the day they probably are over paid, but there isn't much you can do about it. For example if the govt wants to borrow ten billion dollars. How many people does it take to sell the bonds. Not many, but you want to make sure it gets done right. Would you pay a guy half a million a year to do this or some second rate guy at 50k? Due to the big numbers the cost is mostly insignificant, so you hire the guy who knows what he is doing. Most of the money is commission or profit based. We had a desk that never made any money. We hired a team of two guys and they started making $10 million profits a year. How much do you think they should get paid? The UK benefits hugely from the banks in London. A lot of the people and business is international. Typical example you'll have an Italian selling an American bank's products to his home country. There is no good reason why this has to happen in London except for this is where it happens. The UK govt just gets its share of taxes from the deal to dish out to the chavs in the regions. Suits UK fine. BTW if you want to see the parasites that really are overpaid you have to look at the partners at the big law and accountancy partnerships.
  5. Wait a second. The crash certainly isn't guaranteed. If we do get a flat landing or even see house prices pick up. Do you think the general property owning public should care about our predicament? I think most do.
  6. I don't know where you are, but the UK median is 40k http://www.jobstats.co.uk/jobstats.d/Rates.html If you're in the city the median is 54k http://www.jobstats.co.uk/jobstats.d/Detai...TY.d/index.html BTW congrats to FaTB for the new job.
  7. Its just because when you're unemployed and sitting around the house all day you actually have to spend a lot of time with the missus until you manage to p*ss each other off. When you're working at least you get to get out of the house!
  8. Don't know why you want to go to NZ it isn't much better there: http://www.stuff.co.nz/stuff/0,2106,0a12855,00.html Oz ain't flash either IMHO London is pretty safe. I think young people get a hard time. I can remember seeing a bunch of guys in hoodies making funny gestures and looking threatening. Turns out they were deaf. :-)
  9. Thanks for replying. Sounds like you are getting the hang of it. You say the loan was originally debt money, it depends which way you look at it. In reality the credit and the debit are created at the identical same time, think of depositing a cheque. One more thing, M0 is not real money, dont concentrate on that. If everyone used credit cards and cheques m0 could drop to zero, there is no need for it. Yes fiat money is printed by banking system. But under supervision of the central bank who is there to protect the system. Yes it can be abused, but mostly works pretty well. Don't believe all the crap you hear about banks getting a small deposit and then loaning out 10x as much, and everyone a slave to the financiers. Yes if you borrow too much you can be in trouble, but the majority of people in the country don't even have a mortgage.
  10. OK a director. I can't prove he wasn't so we'll leave that up in the air 'til I look deeper. Are you going to fix your sig to take president out? So the second richest man in England. Is that after the king I suppose. Funny that you hardly find any reference to him. Is the house in Bromley really a palace fit for the richest man in England (after the king)? I would imagine that would be crap too then. Do you know where the quote comes from. some say he was talking to students in Texas, is that when he said it?
  11. That quote is everywhere on the gold-bug sites on the internet. I'd be really surprised if you could find he definitely said that. Especially as there is no such thing as president of the bank of England. The main man is the governor, and he certainly wasn't one of those. http://en.wikipedia.org/wiki/Bank_of_Engla...Bank_of_England Not to mention he was chairman of the largest private company in Britain. You think he would have better things to do that run the BoE. Here is another list of the Governors of the BoE. Stamp isn't there either. http://www.bankofengland.co.uk/about/pdfs/governors.pdf Please find proof that Stamp ever worked for the BoE.
  12. Oh please. Why don't banks just print money and pay themselves? Why do they bother lending money at all? How come some banks go bankrupt? Why do banks limit risk if they could just print money to cover the loss? Like there never was any boom and bust when banks had big gold reserves? Yes there is some truth when the govt has control of the money supply it can lead to boom & bust, which is why central banks are mostly independant now. Its quite funny everyone here blaming the fiat system when there is no alternative. If the gold reserve was so great why don't countries change to it? Oh I forgot because of the secret society of facist overlords who run the banks and make all the profits.
  13. NLRG, your example is misleading. The money is only created if the person with the loan gives the money to someone who puts back into the same bank (or the other bank has a transaction the other way). The bank cannot just loan out endless money from a small piece of capital. If it could do this banks could have savings accounts with 10% rates and mortgages with 1% rates and still make money. They don't because they can't. marko, you don't understand how money works, if you did I think you'd be less upset. "collectively we are all in debt to the tune of 97% of the total money supply " is factually completely wrong. There is a credit in someones savings account (+ some bank capital) for every loan. Look at the balance sheet of any bank and you will see it. If it was that great why don't you start your own bank? There already are a few hundred(?), you just need some capital.
  14. Really? How would such a company make money? How much mind gold is there in the world and if we went to a gold standard, would the price of gold be less than a million dollars a gram?
  15. He is a kook. What is the govt supposed to do buy X million tons of gold? Will that make the economy better? What about when a new baby gets born. Buy more gold? What about poor countries. I guess they should stop buying useless stuff like machinery and oil and buy gold instead. He isn't the only one to go on about the money supply. Look what the BoE did during the Thatcher era. They kept money supply targets as their primary aim and it was one of the main reason rates went so high and the whole economy went t*ts up. Sheesh
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