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Everything posted by EmpiricalBear

  1. That level of spec is very, very, expensive. I know the architect (interesting he is not named) as his work is very distinctive. We are not talking a fly-by-night here, but a solid practice with a separate interiors designer and the quality shows in these albeit rather cold estate agenty photographs. Only 0.2 acre of land, but hey, this is a house for a family with a combined income in the 200k range or possibly more so the price doesn't seem unusually high to me. The problem with a spec of this level is that you won't get it back on resale, so a price fall probably just reflects the realisation that while the expensive luxuries are nice, they aren't worth what they cost by a long chalk.
  2. And once interest rates rise to a more normal level, annuity rates will improve. Considering increasing life expectancy, annuities would become more attractive. There are risks that annuities will overall diminish in payouts if the industry has less to spread around (its like insurance, those who live shorter lives balance out those who live longer, so with fewer people in the annuity 'pot' the risk to the annuity provider increases reducing overall payouts). Even so I don't think this is the end of annuities, it just might mean the providers have to work harder and there is scope for better competition/shopping around. Also, at retirement, how many people want the hassle which comes with running a BTL? If its fully managed the yield is lower still. I think this change is probably a good thing provided people get good advice. For many people that could be an issue as most people don't know the first thing about investing, they need to be protected from the charlatans and snake oil merchants
  3. I've been doing a lot of reading and studying of this in the last week preparatory to buying a few bit coins. Wish I'd mined them :-) Theres not much wrong with Bitcoin at its core, the massive problem is with these amateurish and dodgy exchanges and how people are using it. To my amazement owners of bitcoins if they store them on some of these sites are effectively giving the online site their credit card number and the pin code to unlock it! Madness. Hence they are very open to hacking attacks in that case. Another thing to say is... even with 7% of ALL Bitcoins apparently stolen from Mt. Gox the price of Bitcoin has not collapsed. The need and opportunities Bitcoins serve appear to override these massive 'teething' troubles. I suspect that there will be a new version of the Bitcoin software that can address many of the quibbles and that within 10 years it will be mature. At that point we'll all wish we'd bought a couple while they cost less than $1000 each.
  4. Bigoted nonsense about teachers. Some work harder than I suspect you have ever done in your life. I'm not one, but live with one so I can tell you this from first hand experience. Every year when the government comes up with a new idea about how kids should be taught she has to rewrite all the course materials (usually involving unpaid evening and weekend work). Almost a day in every weekend is spent marking books. Then there's reports, parent-teachers meetings (loads of these nowadays) which are unpaid and involved dealing with demanding and irrational parents. Duke of Edinburgh trips, etc. etc. All conducted under the threat of random instantaneous evaluations by a superior and the constant need to run interference on lazy and stupid children who have all to be treated like little gods (no child left behind irregardless of their lack of aptitude or bad attitude). Frankly I have no idea why anyone does it, but the work and stress might actually be partly to blame for a few of the more deluded teachers to reach for the fantasy of becoming property magnates as a dream of getting out of the system and finding an easier life.
  5. Ha ha. I read on the internet in 2003 there there was going to be a house price crash! Guess what, there wasn't and now people write about the price of cheese instead. :-)
  6. But what matters is wage inflation. Only wage inflation can reduce the real value of debts, so until wage inflation kicks in there will be a dangerous dance with price inflation, the hope being that it will not become too hot. And the policy allows 'get outs' so that extreme price inflation would allow a change of course.
  7. The CB lists the gold as an asset (they can, because they have the leasing relationship with HSBC) Kaye has an asset, the actual gold. Most likely HSBC have a liability to the CB to return the Gold (which they would have to buy from someone else if it had to be delivered) HSBC also have the money in the bank they got from selling it to Bill Kaye, they could use part of that money to buy a future or option to cover that liability to the CB. Nothing wrong here, all normal it seems to me.. thats what derivatives and banking is all about, the virtualisation of assets to create more liquidity. The whole thing goes kerflump if HSBC didn't do their sums correctly and we're back to 2008. In that case, Bill Kaye could well be in the best position. But at no point has any Gold 'disappeared' mysteriously.
  8. How I'd like this to be true. This is not a scientific paper in the true sense. The main social purpose of publishing (apart from the more mundane aspect of establishing ownership of the discovery) is that other researchers can replicate and independently verify the results. As the object at the centre of this is proprietary and unexplained, its an interesting curio but no more. Archiv is not peer reviewed, any of us could write a paper and put it on there, even those of use with egregious spelling abilities. My fingers are crossed that this is real, but I'll wait until its really real before I get too excited.
  9. I really believe that those of you waiting for the economic dominance of the US to end are wrong. I've been travelling there for the last 30 odd years and the innate reslience of the US economy is staggering. I was there at the time of the dotcom crash and that was the worst I've seen it. Todays situation is nothing like as bad, and the US continually reinvents itself. Our similarity to the US also helps us. There is a great talk by Niall Ferguson on TED called the '6 killer apps of Capitalism'. This explains why the UK and US still have massive advantages because of culture and politics that few other countries share, and none at the same economic scale. China, supposedly the country that will overtake the US, is essentially limited by its lack of democracy. Right now it is heading for a bigger bust than experienced in the west, because they have over invested in the wrong things, its a massive bubble. Not only that but its demographic shift to an aging society is not far off, the numbers of new workers entering the workforce has already peaked. Manufacturing is beginning to move from China to Mexico... why?... Chinese labour is now becoming more expensive and there are advantages in taxation and closeness to the US market. So the basis of reserve status in a fiat system depends on belief, economic strength and geopolitical security. The US is resource rich and ramping up shale gas production. By the time they have used that up the US will have viable alternative energy systems. So who would rather trust Russia or China with a reserve currency, countries both of which remain politically without deep traditions of democratic stability and the rule of law? Where else? Europe? Europe is a basket case for the next 5-10 years. The world outside loves to bash the US, but its ideas, technology and economy still lead the world and frankly I think it will continue to do so for many years. Whenever its down, it adapts, evolves and comes back stronger. Japan has been making computers for many years now, but its Apple that has made the running in the last few years, a company founded by hippies. That's no accident. It took the oddness, idiosyncracy and creativity of people like Steves, Jobs and Wozniak to create something by 'thinking different' that is hard to replicate in undemocratic countries, or countries with a high degree of social self-control. Even today most managers would not hire Steve Jobs in America... but America makes it possible for people like that to succeed. Don't get me wrong, there are plenty of things I could criticise about the US, but rumours of its demise may be greatly exaggerated.
  10. If real wages don't increase, then a real fall in prices won't help.
  11. Except those who do not vote may not be representative of all those entitled to vote. I expect those who actually vote represent a population skewed to the more intelligent end. And the smartest people may not always make the best call anyway.
  12. If the Tories don't win the next election then I think we are truly sunk. They need a proper mandate in order to keep the current reforms going. Without a feel good factor in the economy, theres no chance that they will get that mandate. So I think they have looked at the options and picked the only one that has a prospect of working in the short term. A substantial pick up in property transactions would have a boost on the economy. A few years back my accountant persuaded me to join a local business network. The idea was that small businesses, we were mostly self-employed, could refer business to each other. The experience was eye opening as I could see at first hand how the BTL economy works. Those of use who were not in this property oriented business got very few business referrals. The people in the property side of things were passing little referral slips to each other every time we met. It was amazing how many of these people there were, mortgage advisers, plumbers, electricians, boiler specialists, property management companies, carpet cleaners etc. etc. etc. Sadly I gave up the belief in a nominal price crash two years ago. After an STR in 2003, I've taken an enormous hit by returning to the market, but enough is enough. TPTB have no option but to keep the property plates spinning while they try to work out how to get something else going that can take its place. With European legislation, and the regulatory aftermath of the crash hitting the city, tax revenues have to come from somewhere. I think they know that long term this can't work and may even be counterproductive, but maybe they need some space so that structural reforms to benefits and the economy can take effect. There are 15 years of Brownonomics to repair, not easy in a short coalition government.
  13. Thanks for this, particularly the first paragraph as it provides some much needed context. Good to see you posting, even if only for a brief moment.
  14. Yep. In any case, the rich can persuade the planners, with the help of consultants, to permit all sorts of ugly monstrosities. http://www.getreading.co.uk/news/s/2059298_neighbours_anger_over_the_12_million_mansion (clearly visible as you drive up the hill, looks like a conference centre) http://www.thisismoney.co.uk/money/article-1702785/Rowan-Atkinsons-5m-space-age-home.html (a run of the mill Meier design that looks like a design studio, no Villa Savoie this one) http://www.getreading.co.uk/news/s/2444_hello_john_got_a_new_mansion (he got there in the end, I've seen the pictures)
  15. Once you remove all the houses on the flood plains from the supply you end up with a smaller number of actually inhabitable houses. As a result the actually good houses that don't flood are worth more (smaller supply you see for same demand). So while the price of houses on the flood plain may crash if sea levels rise then the price of the rest will rise. The insurers can tax those of us smart enough to not buy on a flood plain to pay the claims of those who do, so it all balances out...
  16. That influx of government money into property is well timed for the next election isn't it? Given that sales of houses have a knock on effect into the wider economy, its a handy little bit of pre-election boosting.
  17. An IO mortgage should only be allowed if the borrower has passed a financial IQ test.
  18. The ideal mortgage for this IMHO is Virgin One's current account mortgage. I had one for a number of years, at the moment I have a product with a lower IR, but I'll look at switching back to Virgin when the discount/fix period is over. Ideal for people with irregular income, moreover, because they are used to such people their application process is easier for the genuinely self-employed, i.e.: just the people the other banks won't touch with a bargepole at the moment.
  19. Could Gold be the next LIBOR scandal? http://www.guardian.co.uk/business/2013/mar/13/london-financial-sector-gold-market
  20. STR in December 2003 and had a nice time until 2007 living off the interest on our capital. Finally got bored after 9 years renting in a beautiful place, but a gradually degenerating rental property (typical of the UK, zero maintenance by the LL), so bought a place. Getting older decided I didn't want to ring someone if I wanted to repaint the kitchen. Spent far too much thanks to the rise in house prices over the years, but we have a great house now. Borrowed shitloads at low %age, but the capital is still there to pay a lot of it down if IR's rise. I don't see that happening for many years though. STR was my defining poor financial decision of my life, luckily I've had a few breaks as well so all the karma tends to level out. I'd still like house prices to fall maybe another 25% in nominal terms, but I don't really see it happening. Even though I'm not young, a fall might help me move up to another property one day, and we need the cost of housing to be lower in general. If I'd BTL'd my west London semi (very nice area) I'd have been quids in now. But its weird, I sometimes work in London and now I live in rural Wales I actually feel a little pang of empathy for the people I see commuting on the tube in London, poor devils. I'm glad to be out of it, and I can dip in every time I want to experience the good bits without having to live with the constant urban anomie.
  21. Dead right, its actually feeling quite mild for the stormy stock season... but we aren't through it yet, still a couple of bumpy weeks to get through.
  22. The recent rise of Google has been a bit suspicious to me. I've followed the stock and invested in it for quite a few years but latterly decided the company was becoming very defocused. They seem to have begun to improve on that score more recently. Still, the rise in the price just seemed OTT to me. Google are great at achieving vast reach with products that generate more mediocre profits.
  23. Yes, I think your analysis is correct. I don't agree with the gold is too expensive viewpoint as I simply see its value as the inverse of currency inflation. There is investment volatility from trading operations, but I believe the long term price move is more in line with a role as an alternate currency. I also feel the source of problems is excess capacity and debt and that the likely trajectory leads to lower consumption in the short to medium term which reduces industrial demand. However in the medium to long term the possibility of a major realignment of economies might mean industrial commodities eventually have the higher value.
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