Jump to content
House Price Crash Forum


  • Posts

  • Joined

  • Last visited

Everything posted by aa3

  1. The Tories really seem to be coming together over the last few months and actually making progress. It makes no sense that an individual citizen can sue over a project that has received planning permission. A succesful society needs rules, and when you get the approval, you are good to go. Civil Judges are there to make sure contracts are honoured. Not to decide on how a town should be planned. When judges start coming out of their rightful place, and intervening all over the place wildly, it is the job of a responsible government to make sure they stay in their rightful place. Now if that citizen wants to band together with other residents and purchase the land, and apply for the planning permission for what they see as the best use of the land.. then the courts should also defend their rights.
  2. There seems to be a limit of how negative rates can go. Because if they were say -5%.. you would take out a 100 billion dollar loan, put all of the future payments into a locked account, and transfer the difference to your personal account. What I do think is possible is negative real interest rate. Eg.. you can borrow money on a secured property for say 1%.. and the inflation rate is 3%. To go further negative I think the inflation rate would have to be increased. Say a negative real 5% rate was needed, inflation might need to be 7%.
  3. As I understand one sides points all of the net job loss.. actually lets not say jobs because I agree with the point that eventually capitalism will create a society where no one is forced to do any labour.. lets say all the growth of those who have no income and rely on the state for their sustenance.. is entirely down to the growth of the state and the deleterious impact that has on the economy such as the growth of rentierism and outlawing of so many opportunities. While the wonderpupian arguments says that all of the rise of those people reliant on the state for their sustenance is from technological obselesence. Both the direct impact of productivity needing less net workers, and the secondary impact of pricing power erosion lowering the amount of commerce taking place. Perhaps these trends are feeding on each other. Like we saw the industrial heartland of America in the great lakes region, clearly went for Obama and his greater government assistance, even as Romney argued for easing up on regulations, such as the excellent jobs and business opportunities in the coal industry. Sadly my own personal beliefs of getting rid of so many of these regulations, and providing greater government assistance (which is easy as taxing the same percantage of a much bigger pie brings more revenues).. seems unpopular with both right and left.
  4. Volume always leads price. If you want to know the direction of a market, all that is needed is to have a graph of months of inventory. The reality in this day and age is the young adults today don't have the slightest hope of affording these houses. So either the houses never sell, or they will have to fall to levels scarcely imaginable today so that the new families can afford it. And considering half the young adults are either underemployed or outright unemployed.. and probably half of the remaining half work for minimum wage.. you get into questions of whether they can even afford the costs of homeownership even if the houses were free. An example of how far the falls are possible I was reading about Ohio. And there houses are selling in some cases for $15,000. In the big employers of today like the big box and grocers, those houses are affordable at the prevailing wage rates.
  5. I've seen worse in Britain, so yes I could believe that. Do you have a breakdown of Hostess' labour force?
  6. 230% of GDP debt is not that troublesome depending on some other factors. One factor is the rate of interest they are paying on it. I believe they are paying less than 2% a year interest on the debt. At 1.50% this would be 3.45% of GDP to service the interest. Servicing the interest is not as bad as it sounds, considering Japanese debt is held by Japanese people, so its another way to get money to the people. Its not like they are taxing the people and paying the interest. Japanese printing is probably around 10% of GDP for the last several years. I believe they should be printing at least 3 times that amount, or 30% of GDP. You could have a nation with national debt at 500% of GDP. But if 9/10ths of that debt is held by the central bank its a different story.
  7. Ya the east Asian democracies are economically very right wing. In Japan it kills them the idea of giving people money for nothing. So I thought of a possible Japanese solution. Giving the printed money as a tax rebate for hours gainfully employed. Something like £2 an hour 'matching pay'.
  8. This must have been another company loaded up with debt. Of course blaming the workers is the classic management strategy. Reality is if you have a product people love, selling huge volume, with the distribution channel built up.. you can afford to pay union wages. Some people are saying with all the past bankruptcies and debt Hostess failed to put in the newer bakery production technology. Which would have dramatically reduced the number of employees needed. The organization also seems top heavy. They say the union represents 6,000 members of the bakers union. Yet the corporation has 18,000 employees. How many of the remaining 12,000 are managers making big money, having meetings, going on team building getaways to Hawaii, planning the next re-organization. My bet is most of the 12,000 are dead weight. Of course managers never cut managers.
  9. Another issue is how to spend the printed money. The favorite has been buying bonds, driving up the current value of the bond and down the yield. This makes indebted companies happy, but it doesn't seem to get money to actual consumers to buy things with. A better plan is to have the government issue long term debt, print money buy the debt. Its the government job then to go and spend that money as widely as possible in the nation. My personal favorite is for the government to issue citizen's dividends to all citizens for the amount of the stimulus. I dont' see how things can be more fair than that. So Britain has printed £300 billion since the start of the great recession. That works out to £5,000 per citizen, and £20,000 per family of 4. Since the printing started 4 years ago that is 48 months. 20,000/48= £416 per month per family of 4.
  10. I 100% agree with Shinzo Abe. However I've heard this before in Japanese elections that finally they were ready to break the deflation and put money out into the economy. Only to see the same old policies stuck with once the election is over. This can be approached by a very simple scientific approach. You print a bunch of money and the government spends it broadly into the economy. Economists track the rate of inflation in the economy. If inflation still is at zero or below.. then the next month you print a bigger batch of money. You keep doing this until the monthly rate of printing causes inflation to go to 2%.. which is a much better target than 1%. (I actually prefer more like 3% just to be safe). Negative rates are near impossible with such a low inflation target of 1%. You need more like 3% to give yourself some room, so bank interest rates can be at say 0.5% but the inflation is 3%. Causing a negative 2.5% real rates. Then you also have to factor in the invariable bank overheads and spread for risk of default. So again the 1% simply does not allow enough room to actually get negative rates. Let me make a long story short, if I was the bank of Japan governor and had unlimited power I could guarantee a 3% inflation rate within 6 months.
  11. Look at the issue of policing. Would you really want the average person deciding how the judicial and police systems work in your local area? I believe the insanity that is California's three strikes and your out law came about as a referendum. Somehow we still have judges not-elected and it seems to work well.
  12. Ya most people through the ages, just want to drink, dance, sing, and have a good time. I find it funny that centuries ago when the only thing to do was read, the vast majority of the population was still illiterate. They don't want to read, they want to have fun. Centuries later and its the same story. Its weird people like us who have a thirst for ideas that are meant to be the masters. Most people don't want to be the masters. They just want to know they are safe, the beer is flowing, they are gainfully employed, well fed, have some extra spending money.. and for that they work hard and love their country.
  13. I voted once as a naiive 18 year old excited to participate in democracy. I realized that even if I had never shown up the outcome would not have been different. Years later I realized even if the outcome of that race had been different, the long run outcome of a democracy would not be different. If you give millions of people a vote, the outcome is basically the same. Its not like the outcome of Britain's democracy has been that much different than Spain or the USA or many other nations. Some people say you cannot complain if you do not vote. First off they shouldn't complain because the winning majority of them voted for the government in power. Secondly I'm not complaining about a particular party or candidate, I am complaining about democracy itself. What people can control is their own life. So say they are not making much money and getting taxed down in Britain, and a Dubai job is open where they make 3 times as much and pay no tax. They can decide whether that opportunity is for them or not. If the government taxes the hell out of travelling, a person can decide to do something else for their week off. In a local setting I've seen the government go crazy with police and taxes on going out for dinner and having a drink. So people I know stopped doing that, now they invite people over to their house and have a private party.
  14. If Japan, China, South Korea, Taiwan and friends opened the flood gates and started spending it would lift the boats all the way around the world. Imagine your family owned a Scotch distillery and peat bogs.. and a Chinese national chain store decided to stock your brand. You soon could have so much money that just managing the money becomes time consuming. And to increase production more bogs, more distilleries.. and a sane society would make those jobs good paying jobs. (part of the brands appeal might be that it is a little more expensive and thus higher status).
  15. I really agree that we should let the free market create as many jobs as possible. In the best case scenario there is no need for a long time for a state solution. Just one small example Britain used to have opium bars and hashish bars. Those are things people are willing to pay real money for. The statists argue that we would become a nation of unemployable addicts.. yet when Britain had drugs legal we were the industrial center of the world. Another example is allowing construction. London should have spectacular high rise condo buildings as there is so much demand to live downtown. To build all those would employ hundreds of thousands of people. By saying no, the society also says no to all those people working. France seems to be following the shared leisure time through regulation. I think it especially works for them with all their huge corporations and government departments. In Britain with all the contractors it would be harder. Although right off, there is ~8 million government workers in Britain. Which is about 30% of the workforce. Then another 8 million who work for contractors to the government. In the long run I would like to see the dole detached from whether the person is working or not. Like a person ends up on welfare, it covers their basic cost of living. But they are free to make money anyway they can think of. We see some of this already, from babysitting to working under the table to unlicensed pharmacies. Another question arises whether neccessity is the mother of invention. My feeling is the ambitious hard working types who still are easily able to have jobs and be successful today, would have the same personality even if they happened to be trust fund kids as an example.
  16. To comply with modern regulations like airbags, crumple zones, fuel efficiency standards all of today's cars need to look nearly identical. While in the past when freedom reigned, designers had much more freedom to go radical. I see those old cars as having great value. The watches are interesting. A friend of mine's father collected movie posters, he was a film insider creating music. He just sold most of his memoribilia collection and I think he got around 1 million pounds. Yet other people are collecting and investing in action figures, the ones still in the package. I think with the banks using the fractional reserve system to arbitrage any possible reward out of the system, any institutional style investment seems hopeless. With collectibles again you actually own the thing and can enjoy it. You don't just get numbers in a bank account. I think there is something in the human psyche to owning things, like mention that 1950 Rolex and I want one!
  17. I am reminded of Roosevelt's innauguration address. "the means of exchange are frozen in the currents of trade; the withered leaves of industrial enterprise lie on every side; farmers find no markets for their produce; the savings of many years in thousands of families are gone. More important, a host of unemployed citizens face the grim problem of existence, and an equally great number toil with little return. Only a foolish optimist can deny the dark realities of the moment. Yet our distress comes from no failure of substance. We are stricken by no plague of locusts. Compared with the perils which our forefathers conquered because they believed and were not afraid, we have still much to be thankful for. Nature still offers her bounty and human efforts have multiplied it. Plenty is at our doorstep, but a generous use of it languishes in the very sight of the supply. "
  18. Bastiat is a great thinker. His point is that you can see the workers employed to go around the artificial obstruction.. but you cannot see the other jobs they would have been doing without the obstruction there. Then he makes the amazing futuristic point that eventually you won't have to work. On the other hand if that Chinese area reached such a state of advancement that there literally was not enough jobs for 75% the population. The emporer would have to do something, or he wouldn't be the emporer for very long. The easiest and most sane thing is just to take some of the huge surplus of production enabled by that technology and dole it out. It makes the owners of the factories happy, and it makes the 75% happy. In Bastiat's story the emporer tries a different path. To break windows and hire people to replace them. Thats a lot of what Britain has been doing for the last 20 years at least. Like we have good solid ways to power our electricity, but we had to try for the insane idea to power the whole nation with wind. Which of course employs large numbers of people, (and makes the owners of the factories happy).
  19. I think that is smart. One of my smartest clients after years of losses on the stock market started putting his money into art work. He has a special vintage and style he likes. He travels all over going to galleries and auctions and such. If you really know classic cars inside and out, if its your passion, you can just see when a car comes up well under what it is worth. Of course there will be ups and downs, but since they are not making more, the odds favour appreciation over time. For me its going into private business, where I have a real or controlling say in the decisions. Even real estate gives powers.. like if it is a down market and you have lots of money you can simply not sell.
  20. This bear market started in the year 2000.. and I feel like it could go on for years to come. Companies really haven't changed their spendthrift ways yet. In a few years the pension funds will move to net sellers of equities. And that will last for decades. Of course if at some point equities get low enough that all of the negative factors are already priced in then it might be time to look at stocks. Personally I have stopped investing in anything I do not directly control. Even if you bought stocks in a great company, a bunch of morons could take over the executive and wreck the value. You have no control. That is one of the strengths of property. It might not offer a great return, but at least you actually own it at the end of teh day,
  21. The net negative tends to be from the nature of our economy. The rising unemployment is leading to falling consumer spending and falling government revenues. Now some here say that full employment should not be a goal of the society. And I agree 100%, but as the economy is currently designed without jobs people cannot buy things. Obviously that impacts their own material prosperity, but it also ends up affecting the prospects of businesses in their community too. In the USA with Obamacare, Obamaphones, generous food stamps, section 8 housing, welfare, school meals, home heating subsidy, child benefit and dozens of other programs.. they actually are reaching this state where a great number of people do not have to work. When I've seen the numbers these welfare people probably have more money coming their way each month than the majority of British working people. And that is what I have been arguing with enough government spending broadly, no technological improvement can be harmful to the economy on net.
  22. That is reasonable. The capital is crafty rarely is there exclusive monopoly, usually it is licenses held a bit below market demand. Whether farm quotas, taxi licenses, professional certifications, building permits, etc.. I have been talking with a man who is creating a marketplace where there was none before. Its in a utility which is contracting out a service previously done in house. Developers will be able to contract out to the utility approved contractors who interface with the utility at a price negotiated between the two of them, or the developers can wait until the utility gets to them and does it at the lower price. The utility is a private company with a monopoly license for an area; water. In round 1 which lasts 3 years, he has decided to approve 5 engineering contractors to be utility approved. If a contractor is not interfacing well with the utility, or doing substandard work, it can be dropped at any time, making room for a new entrant. By creating something restricted, it becomes valuable for the ones who win the bidding to get approved. But with this they can also be controlled. A similiar example is banks in each locale will have a few approved appraisers. By restricting the number it becomes lucrative for the appraisal corporation. But if the appraiser was caught sneaking things through they may well lose their approved status. So they end up serving the banks goals.
  23. At 18 people don't know what makes money.. especially after years in the school system. Its wrong not to guide young adults to something they could excel at, that also makes a lot of money. Withholding key information from people is quite near to lying. If/when I become the god/king of Britain the first semester of university for all students will not involve any courses. It will find peoples natural passions, natural strengths, psychological assessments, group circles, brainstorming sessions.. and for each student find a few options of something they could excel at, and make a real living at (or better). Like taking a young woman who could be like a pharmacist or veternarian and putting her in women's anger studies is just wrong. Speaking of angry women.. who is likely to be more angry, a 40 year old 'Barrista' with a women's studies degree.. or a 40 year lady Veternarian going on another vacation to xxx..
  24. Thats why there are some especially entertaining people who make 100 million a year today. Because if they are appealing to a mass market, it can go national, even international. Its one of the reasons for the '1%ers'. Same with a great chemical engineer who is making advances in something like plastics. Even 5 million a year might be underpaying his real value. Whereas a moderately good chemical engineer might simply be displaced.
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.