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The McGlashan

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Everything posted by The McGlashan

  1. This Sept 09 figures out today: http://www.ros.gov.uk/pdfs/la_sep_2009.pdf Edinburgh down Aberdeen down Dundee up Glasgow up The quarterly report is also out today, I've not had the chance to analyse it yet: http://www.ros.gov.uk/pdfs/2009_11_statsrelease.pdf
  2. That Savills fella Macnab made me smile. He's like a pantomime villain (well, I suppose, the season is very nearly upon us). Someone should tell him about literary foreshadowing. If he reckons that there will be 10% growth per year from 2011, he is forecasting that the average house price in Edinburgh will be around £1m in 2026. (10% growth gives a doubling period of 7 years.) "The greatest shortcoming of the human race is our inability to understand the exponential function"
  3. It makes me sad too, Quine, but the changes we both want to see will come, they just won't come overnight.
  4. No it isn't. From an exterior view, it's mostly multi-story car-park, that most unlovely of urban carbuncles - there are no nice ones. The 'contemporary' frontage on Guild St. pays minimum lip-service to the Aberdeen vernacular while simultaneously choking light and air from an area which was once open, broad and welcoming. Now, in order to see the architecturally unique Aberdeen Joint Station we must enter the building which vandalises it and be bombarded with uninvited commercial messages. The interior itself is unremarkably bland and lazy; you could be anywhere. The interior and exterior finishes and details are actually quite poor and, dare I say, cheap. This building has not been designed by an architect, it has been selected by an accountant. In short, it's crapitecture lifted directly from a 'how-to' book for commercial property developers, the same 'how to' book which they all seem to be issued with on their eighteenth birthday. It has no redeeming features - none. It's practically identical to just about every other shopping scheme that's been built in the last 20 years anywhere in the world. From Karachi to Cairo and Abidjan to Aberdeen, we are invited to select identical products with identical brands in identical environments. "a niveful o' shargar shoppies" ps, The 'elite' pay upwards of £95 for their tee-shirts and wouldn't be seen dead in this retail hot-house. This place is for the stupid fat slaves who like to think that they're elite.
  5. I've just returned from a trip into town, and I'm struggling to express how I feel about what I've seen on Guild St - Aberdeen's new main street. I am, of course, referring to the new shopping mall, the rationale behind it's creation and it's effect upon the urban environment and residents of Aberdeen. Apparently, there was a torch-lit parade of primary schoolchildren led by a pipe band, between St Nicholas St and the new mall, to 'celebrate' it's opening. Apparently, police had to intervene to prevent crush injuries at the door of the new Apple Store. Apparently,according to the P&J, "those who arrive now by bus or train are greeted by a ... city very much on the up. Gloom and depression has been replaced by a colourful array of shops and restaurants". Frankly, I'm a bit nonplussed by all this jubilation - anyone would think that something really important and good had happened. This shopping scheme is not a major piece of capital coming to the city. No necessities will be manufactured or distributed. No capital goods will be created or provided. Rather, this mall represents a large imposition of what economists call a 'sink sector'. That is, the provision of luxury goods is an area of economic activity which (like military expenditure) does not contribute to endogenous growth, but is by contrast a sector of the economy which soaks up excess value in the form of unnecessary consumption. I find it particularly ironic that this development replaces a large and well equipped rail-freight terminal which was fully integrated with the adjacent sea-port. Now that WAS growth-generating capital. So, we can see that the city fathers have allowed commercial property developers to replace a facility through which capital arrived in the city with one which will permanently suck capital out. Great. It is, of course, an easy analysis to make if I point out that, rather than indicating that the North east's economy is 'very much on the up', this shopping scheme is a manifestation of the economic prosperity of 2007, when the funding for it was put in place along with other developments which form Aberdeen's very own version of 'the skyscraper index'. (Park Inn Hotel, International School, Hotel Ibis, Marischall College, Trump, Blairs, Citigate, Aberdeen Gateway, AWPR, Community Stadium etc, etc). Apparently, almost 60,000 people showed up to greet the arrival of these new retail opportunities: opportunities where they can exercise their god-given right of consumer choice. Trading civic virtue for credit rating they measure their self-worth by the ticket-price and up-to-datedness of their possessions; mistaking buying a lifestyle for leading a life they have swapped shopping for thinking and having for being. Are there any bookshops in this new shopping scheme? No, of course not, there's a huge cinema multiplex. Why would you read a book when you can see the film? Stupid fat slaves.
  6. Glasgow Herald This is quite the most realistic article I've seen in the finance/money/business pages of the Scottish press since the beginning of the current difficulties in summer 07. Do I detect a dawning realisation that the world has changed, that the ground has shifted, and that it's no bad thing? Interesting...
  7. Yon 2-bedder is now on for £95k.
  8. Without doubt this represents a milestone in the Scottish bear market. "When the levee breaks..."
  9. Wahay! I'm absolutely delighted to report that RoS figures for Aberdeen have turned negative. http://www.ros.gov.uk/public/news/press_release_flash/28day.pdf The rolling weekly 28day survey now shows -3.3% for Aberdeen, -3.6% for the 'Shire and (just for Redhat) -4.9% for Moray. Happy days are here again!
  10. Great article - well found. It always disappoints me that the North-East's greatest permanent asset is ignored when hands are wrung about the future. The majority of Aberdonians are only two generations removed from working the land which their grandparents thrived upon. Is it that we look down our nose on our own peasant heritage? Our local produce is world class and internationally renowned; Grampian Country Foods banks twice as much money in the city than Wood Group and McPhee of Glenbervie has customers in more countries. Similarly, Aberdeen's greatest ever success story never hits the headlines; First Group is far-and-away the largest and most diverse privately-owned public transport operator in the world. As the tide turns away from personal transportation in favour of mass-transit systems, First is very well-placed to benefit. But what of the sectors examined in the Reuters article? Renewables: I don't hold out great hope for the renewable energy sector sustaining the Aberdeen bubble economy at it's current or recent levels. By definition, such activities are whole orders of magnitude less capital intense than the oil patch. For instance, OpenHydro's new tidal turbine installation barge for the Pentland Firth cost £1m delivered, commissioned and owned. A mobile offshore drilling unit for the oil patch cost $1m PER DAY to lease at the height of last year's North Sea Bubble. Tourism: Hahahahahahahaha. Again when we look at this in context, it is clearly nonsense. In 2008 the entire tourism sector in the whole of Scotland turned over £4bn. First Group has revenues of £6.2 bn. Getting your tartan trews on and tugging your forelock at Japanese golfers is no replacement for the O&G industry. Exporting O&G expertise: It is true that up to 2007, Aberdeen-based O&G service companies generated about 40% of their turnover overseas. However, business sense dictates that if markets are abroad, in the absence of capital controls, capital will inevitably migrate overseas. Decommissioning: Aberdeen lacks the most obvious requirement for offshore decommissioning operations - that being a sheltered deepwater haven. Dundee, Invergordon and Peterhead are far better placed to exploit this once-only market. Indeed, drilling rig decommissioning already takes place in Dundee and Invergordon, and ASCO leads the Peterhead Decommissioning Ltd consortium. Indeed, it seems that Aberdeenshire Council, the Scottish Government, Scottish Enterprise and key private-sector O&G players have already made the decision that Peterhead should be the center of excellence for the decommissioning effort. Along with the CCS pilot project to be based at Boddam power station and St Fergus, there's only one way house prices in Peterhead are going! It is very depressing that decommissioning is often held out as the great hope for industry in Aberdeen. Clearly the destruction of fixed capital is not a sustainable field. It is reckoned that the market will be worth about £0.75bn/year over the next 20 years. That's not actually that much; to put it in context, it's less than half of what John Wood Group currently turns over.
  11. While Catrioina shows her usual perspicacity in pointing out the statistically insignificant 3% increase in Newmacher prices, she disingenuously fails to point out that prices have only risen there during 2 quarters in the last 8 and have thus declined to levels which haven't been seen since 2006. Similarly she fails to point out that the 23% discount on these properties almost exactly matches the 23.3% YoY crash in Newmacher prices. Well, fancy that! As an interesting side-note, the Small Glebe houses are listed on ASPC here: Ugh! Another foul new-build designed by an accountant! Mind your head! While 7 houses are for sale, there is only one listing on ASPC. So, if we search 'Newmacher' ASPC returns 12 properties for sale, whereas the actual figures is 18.
  12. "You never miss your water 'till your well runs dry" The well (which would otherwise be dry) is being filled by Gilt issuance and other unsustainable emergency measures. You are right to point out that the 'slines have no idea what this means. They just keep going to the well... because they can. For now. When the well runs dry, as it will once QE, ZIRP, asset sales, currency exchange manipulation, etc etc are over and done, the 'slines will wail and gnash: "Oh no! We shouldn't have taken so much from the well! If only we'd thought about the future!" "That which is not sustainable will not be sustained."
  13. There will be no identifiable 'phase 2'. I don't think that any major incidents or turning points are necessary - those have already happened. The unprecedented stimulus packages still being unrolled across the global economy are evidence enough of that - and we must be thankful for them; what would have happened to the global system of payments without this state intervention does not bear thinking about... If you'll allow an extended metaphor - the addict had overdosed on the opiate of heavily leveraged credit, and ended up in the intensive care unit where a resuscitation and emergency withdrawal was managed (more by luck than best practice). The patient is now doing well on the slow-drip methadone of ZIRP and QE, but remains in the high dependency ward. However, one of the first rules of economics is: 'that which is not sustainable will not be sustained'. So, at some point the stimulus itself (the methadone) will have to be withdrawn, carefully - the markets mustn't be spooked and the public mustn't be subjected to any sharp discontinuities. We are now, and will be for the next decade-or-so 'boiling a frog'. The attitude of those participating as buyers and sellers in the property market at the moment is denial-driven - it has a lot to do with wishful thinking and is anachronistic. This momentum-sentiment driven activity in the market says much more about the inability of people to react to important changes that occur gradually than it does about the underlying, fundamental and real state of the market. Those participating are not those who are rushing to assets because of inflation fears - I doubt they even know what that means! Do you think that they read the FT, or even watch the Money Programme? Newsnight? Sky News, more likely! If even that. They believe that it's still 2007 (or that it should be); they haven't noticed that the the ground has shifted beneath their feet and that the world has changed. They continue to mistake debt for ownership, to conflate consumption with happiness and to confuse buying a lifestyle with actually leading a life. These things have already changed (the smart money has noticed) - it's just that the hoi-polloi have yet to perceive that the bearings of the hedonic treadmill have seized. The trick which the politicians must pull is to adjust the polity and populace to the new realities without them noticing too much. Austerity by stealth. In my opinion, the last year has seen a sort of 'phoney war' over the implications of the banking crisis for the business cycle. At the risk of cliché, I don't think we've even seen 'the end of the beginning' yet. That point will only be reached when the Chancellor in a new, post-election government delivers the necessary 'emergency budget' which will be the first item of business for the new administration. It is already easy for us to imagine what the content of this budget will be, and as the time draws closer, it will be heavily trailed, leaked and floated. One of the remarkable characteristics of the human condition is that we can get used to just about anything, if given enough time. 'There is no way in which one can buck the market.' Who was it said that, again? It's not that there's trouble ahead; rather that we are, right now, living through a profound paradigm-shift. It's just that it's happening in slow motion. Just as we cannot easily perceive the progress of the hour-hand around the clock-face by staring at it, yet the day inevitably passes nonetheless. A rare prediction from me: Over the medium to long term, mortgages (and other forms of personal indebtedness) will return to being seen (rightly) as an albatross around the neck and a shackle on the ankle - the models of private home ownership driven by high LTV debt we've been used to just don't work when there's not the effective demand in the labour market to provoke wage inflation. Slowly, ever so slowly, the public's attitude to home ownership will return to something resembling that in the 1970's, or that in the majority of advanced economies - it's not for everyone, it's not a right - it's a huge risk that can bankrupt you. George Osbourne is quite right when he says: "We're all in it together". I would add: "Yes, but we've all got to work it out for ourselves!" Of course, I could be wrong.
  14. Agorist's approach to bread queue: Learn to bake one's own bread.
  15. Heh, no offense intended - I just enjoy a wee rant from time to time.
  16. 'Trust no-one' is wise advice.
  17. Ugh! Nice looking house? No it isn't; it lacks integrity, style and authenticity; it pretends to be something it is not. No doubt these are all characteristics it shares in common with both its current owners and prospective buyers. Still, it's got an integrated double-garage and a 'superstar' bathroom, so it must be worth its money! (Mind yer head, 'tho.) Why is it that, as we move into the second decade of the 21st century, house builders cannot provide us with homes which look as if they belong in the century in which we live? Why is it that so many new-builds look exactly like something a nursery-school child would draw in any decade of the 20th century? (With ceiling heights to match!) Is it perhaps because, today, housebuilders believe that it is not necessary to employ architects, choosing rather to get by with 'architectural technicians' only? Is it because they hold their customers in contempt, infantilising us as the kindergarten artist I described above? Or is it because quality, authenticity and integrity are column-headings which cannot be integrated on the cost/price/profit spreadsheet of the quantity surveyor who built this house and hundreds of thousands exactly like it up and down the country?
  18. Who do you feel most comfortable believing; a branch of the civil service, or a commercial VI mashup website?
  19. I can't decide who VI cherrypicking like this makes more of a fool of - those who promulgate it or the credulous public who are only to happy to swallow this sort of crap because it saves them from the frightening prospect of actually having to think for themselves. The ASPC quarterly report has not yet been published to the ASPC house price information web pages, but it does appear on the Cooncil website here. A more circumspect look at the report shows that house prices in non-suburban Aberdeen actually dropped during the quarter. Study of historic quarterly reports shows that prices in the city have only risen during one quarter in the last year-and-a-half. Hell will freeze over before Aberdeen Journals report inconvenient truths like these, though. More inconvenient truths from ASPC's Q3 2009 report: Prices in non-suburban Aberdeen have declined 8% from their peak, and continue to decline by 1% this quarter. Westhill/Kintore/Blackburn/Kemnay fell 5% on the quarter. Year-on-year, Newmacher leads the decline in the Aberdeen housing area, showing an astonishingly high annual drop of 23.5% Prices on Lower Deeside have crashed more than 25% since their Q4 2008 peak, and continue to plummet with a 5.3% plunge this quarter. Bucksburn prices are being hammered down to near-affordable levels; down more than 20% from their peak and continuing to slump 7.4% year-on-year. So, all things considered, the news for aspiring home-buyers in Aberdeen is much better that the P&J would have you believe. It would be better for the people of Aberdeen (whom they supposedly serve) were Aberdeen Journals to report these statistics in a more circumspect and balanced fashion. To suggest that prices have recovered and indeed are booming is irresponsible and runs the risk of hoodwinking the credulous Aberdonian reader into a lifetime of unnecessarily high and unaffordable debt. Edit. To be fair, the P&J did report the 5% drop in Westhill/Kintore/Blackburn/Kemnay. But they reported it as 'bad news for homeowners'. It is nothing of the sort. It is bad news for highly-leveraged mortgage-debtors with little equity who may be forced onto higher rates. It is bad news for house-sellers; speculators, commercial house-builders and property-developers. It is bad news for solicitors and estate agents. It is bad news for the editors of 'property pages', who may find their budgets constrained by a fall in advertising revenue. But 'bad news for homeowners'? No, I think not. Owners have nothing to fear from falling prices unless they're looking to sell. By contrast, this 5% drop is 'good news for homebuyers', but will we ever see such a headline in our local press? Nah. I can't see that ever happening. I fear that the P&J's attitude is, like so many things civic in and around Aberdeen, anachronistic. They believe that it's still 2007 (or that it should be); they haven't noticed that the the ground has shifted beneath their feet and that the world has changed. They continue to mistake debt for ownership, to conflate consumption with happiness and to confuse buying a lifestyle with actually leading a life. Haven't they read a [proper] newspaper in the last 2 years? In my opinion, the last year has seen a sort of 'phoney war' over the implications of the banking crisis for the business cycle. At the risk of cliche, I don't think we've even seen 'the end of the beginning' yet. That point will only be reached when the Chancellor in a new, post-election government delivers the necessary 'emergency budget' which will be the first item of business for the new administration. 'There is no way in which one can buck the market.' Who was it said that, again?
  20. ASPC For sale Today (9 Oct 2009) For sale : 1080 Added in last week : 108 (10%) Continued rise in units coming on to market Added in last month : 379 (35%) Over a month : 716 (65%) compared to last month (3 Sept 2009) For sale : 1095 Added in last week : 93 (8.5%) Added in last month : 370 (34%) Over a month : 725 (66%) ASPC for lease For lease today : 216 Added in last week : 24 (11%) Added in last month : 83 (99%) Over a month : 133 (61%) compared to last month (3 Sept 2009) For lease: 284 Added in last week : 25 (9%) Added in last month : 140 (49%) Over a month : 144 (51%) Looks like some who thought they'd "rent it out instead" are now trying to sell.
  21. Latest RoS figures - August http://www.ros.gov.uk/pdfs/la_aug_09.pdf My Edinburgh friends will be delighted to see that prices have been falling again.
  22. Latest RoS figures - August http://www.ros.gov.uk/pdfs/la_aug_09.pdf Still increasing in Aberdeen. I'll have to change my avatar, as the YoY change has now turned positive
  23. Apologies, forgot to post the link. Here it is: http://www.ros.gov.uk/pdfs/la_aug_09.pdf The entire data-set is here: http://www.ros.gov.uk/professional/eservices/land_property_data/lpd_stats.html
  24. RoS are quick off the mark this month. Edinburgh DOWN Glasgow DOWN Scotland DOWN Aberdeen slightly UP Dundee UP
  25. Astonishingly, there were two consecutive TV programmes with Aberdeen's built environment as their subject last night. Channel 4 Phil & Kirsty http://www.channel4.com/programmes/locatio...ion/4od#2934675 BBC4 Johnathan Meades http://www.bbc.co.uk/iplayer/episode/b00ml...lter_Episode_1/ Guess which one I watched!
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