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Everything posted by 24gray24

  1. Re: the solicitor in Shipley, or where ever it was: She wasn't stupid, she was probably just earning about £25,000-£30,000. Hence took her years to buy a house and probably bought it at several multiples of her salary. Everyone thinks solicitors are on huge money, they're not.
  2. It's cold up here: thanks for the corrections. I was thinking of average london prices, since that's where mr Hairy is, and looking for the last date the average london house price was £170,000. Anyone after that will be making a loss. Average london house price around 1 January 2001 was £170,000. So any houses bought after that will be in negative equity if Mr Hairy's view that prices will drop 40% is correct. So far, as you point out, we've only dropped about 15%. Mr Hairy's view is based on mortgage lenders going back to 3 x joint salaries. Mine is that lenders will go back to 3x main earner plus one times partner; hence prices will revert to £120,000 from £280,000; a 57% drop.
  3. Hairy: okay, so your view is that prices of houses will drop from their (London )peak of say £280,000 to a new average price of £170,000, based on 3 times combined salaries. In numbers, your view is that there will be a 40% drop from the peak. Hence, anyone who bought after 1st January 2001 is going to have made a bad investment, ie a loss. Now on rentals: will you still be covering your costs if rates go up to 10%?? If not, you'll be bailing out your nest egg every month. What's your breakeven mortgage interest rate? ie when your fixed rate ends, what mortgage interest rate will your rents cover (ignoring inflation)? What I'm curious about, do you trust the government's ability to keep inflation/and therefore rates/ down to your breakeven level?
  4. Hairy: okay, let's try this: prices much inflated in previous years by BTL. These are pretty much out of the buying market for the foreseeable. Prices are tumbling. Banks are now going back to 3+1 salaries. So average joe buying average house will only be able to raise about £100k with Mrs Joe. And will require a 20% deposit. So average home in London, say, was £280K at the peak will go down to £120K. First question: did you buy all your houses, which would have sold for £280K at peak, for £120K; or equivalent? If so,, you are not in neg equity danger. Do you agree millions did not? Second: if prices drop back to 120k, will you then be in negative equity? If not, you've done well. If so, you've lost money. Third: rentals pay great at 1% interest. But how will the returns look with 4million unemployed (and council paying a maximum of £300 a month), and inflation and then rates back up to 10% or worse?? Will you still be covering the mortgage on rents then? Obviously, even if you, by dint of buying years ago, are all right jack, there will be tens of thousands of BTL who won't be, who can't re-mortgage and who have to sell into a falling market. Agreed? For anyone who paid at say £210,000 in 2001, saw it go up to £280 and will now see it fall back to £120,000, it's not going to be a good investment, in retrospect. So even if you are lucky personally, you cannot argue that property bought since 2000 is a good investment. The only things to argue about are: 1 how far it will go down again. If you want, argue with my MrJoe argument above; or tell me your views. My view is back to £120,000 for the average house (ignoring inflation) 2. Where interest rates will go. If you want, argue with my view, or tell me your views. My view is: government will print money like drunken sailor, interest rates will raise to at least 10%.
  5. Smith: you're missing about 5 essential elements 1) looting. 2) the desire to get away safely at the end, hence stay close to home. 3) some shops were targetted, some were deliberately left alone; most houses left alone 4)transport: people were coming down for it and 5) many different groups with different agendas in different zones, and the police making a cordon sanitaire round the lot, to prevent more people getting in, or the area expanding
  6. I don't really see the point of making things any worse with rioting. That's the mentality of the 70's, where people made a bad industrial and financial situation worse with continual striking. Many people want the dust to settle without the government handing out fraudulent preferences to its banker friends and compromising the currency any further meanwhile; but not riots As for the middle class of this country rioting...does anyone actually have any experience of riots personally?? I find it hard to believe that a working class person who spent the last 10 years being told he's nothing, and being paid minimum wage fixing up BTLs for landlords who think they are geniuses, hard to see that working class builder rioting on behalf of such people. Why would they? And if it's down to the middle class doing the fighting, well, that's an empty threat isn't it? The middle class will just talk big in private, at dinner parties while showing off in front of the ladies, and wait for a Conservative government to bring back the good old class system once they get in (with their banker friends). And that's about all. Double the price of food and beer and it might be a different story.
  7. I'm glad we've both lined up a £2m job with a bank...
  8. Mouse, thanks, I missed the reference. Perhaps King Bingo is making a joke. So, I've been called "niche right wing" and it's suggested I'm proposing going backwards and being mediaeval ...but neither invalidates the suggestion. So just for the record: does anyone out there, anyone, deny that gold bullion in a safety deposit box is safer than in a savings account in the bank? (given that you can still get your money out of a safety deposit box, legally, even if the bank goes bust). If no one denies this, then the remedy for the current uncertainty is clear...get a safety deposit box and put all your savings in it...(even though that in turn will mean all the banks will inevitably go bust). Injin: legally, I suspect you may be wrong. If the bank loses your money, that is not legally theft. However, with a safety deposit box, the bank cannot just break in and take it, that is legally theft. (and the human rights act makes it difficult for the government to allow theft. If they made a new act to allow it, this takes time, and you empty the deposit box meanwhile)
  9. King Bingo, that appears to be a strange (and erroneous) attack on my (supposed) personality...since when is a request for an honest money system, a niche right wing view? If people put money in their current account, they expect it to be looked after as if it were in a safety deposit box or in a shoebox with their name on it. I would prefer a system that conforms to this view. When a bank collapses, people are amazed that the money in your current and savings accounts could disappear. They consequently believe it must have been stolen or that something illegal must have happened. I want a system that conforms to that view: if I store 100 hours of my labour in a bank, I don't want people telling me it's now disappeared, or that it was okay to gamble with it. I believe such a system already exists: it's called gold bullion in a safety deposit box. (Even cash in a safety deposit box is a thousand times safer than cash in a (collapsing) bank: At least you have a legal right to get all your money back even if the bank goes bust) So, if King Bingo is right and an honest money system will not be supplied, I should keep all my money in bullion in a safety deposit box. And if there's any chance of another bank collapse, so should everyone else. So an honest money system could fairly easily happen, whatever the government says. It just won't be in pounds, and it won't be in the bank's control. It will be in safety deposit boxes. So here is one tentative suggested solution to a collapsing bank system...
  10. Thank you for taking the time to answer, Mr Injin. I'll mull the answers over.
  11. The current banking system is (looking very much like) fraud, granted. But a shoe box system (or safety deposit box with your name on it) isn't necessarily fraud. My question is how to move from the present fraud to an honest system? My only, very ignorant, idea was to change to an all currency system (no credits/fractional system), by printing notes so that MO equals M4. That is a one time operation, and reflects the scale of the fraud. After that, it's shoe box operation.
  12. mmm...but what I'd like is an honest system, one where the money was indeed kept in a shoe box (or safety deposit box). If people are putting £1000 into a savings account, that represents 100 hours of their labour, not in an honest world a credit in a money scheme. So if we have to make an honest system starting from the present position, don't we have to bite the bullet and print currency to match the amounts in current and savings accounts (and then stop any more amounts multiplied up; ie currency only)? Meanwhile, I suppose that the only way to keep money safe, is in gold bullion under the mattress (or safety deposit box), because if the banks are going down, people won't get their money back.
  13. Sorry, I'm a bit slow and maybe didn't express myself very well. If everyone took their money out of the bank (and put it under the mattress), the banks would have to come up with 7,000 billion in notes? There's only 100 billion in notes, so that's quite a printing run. On the other hand, the money in the system (M4) is what, roughly 1,800 billion...which is well less than 7000 billion, so I'm confused. Could the BOE not stop the banks inventing amounts they do not have in currency and then print sufficient currency, so that M0 (notes in circulation) equals M4 (theoretical total supply), then let everyone take their savings out (and put it under the mattress), and the banks go bust (or not); What I'm wondering is, if there is no increase in the M4 measure by printing currency to the value of the M4 amount, then you could switch to a currency only system without cheating the people with current/savings accounts? I'm struggling ...
  14. Thanks for the reply Mr Injin. So, this suggests that there is no way the government can re-imburse even current accounts if the banks go down. So talk of bailing out the deserving (and how to distinguish it from the undeserving) is simply moot...And if people draw their money out, the banks will go down...and all the talk of bail-outs is the government bailing out the chosen few, at the expense of the taxpayer/inflation. Hmmm.
  15. Also, I have 3 questions: 1. what is the total amount of money in current and savings accounts (up to the government guaranteed amount)? 2 How much of an increase in the money supply would that represent if the government had to print that amount of currency? 3 If the banks went bust (because everyone tried to draw their savings out), would the assets of the banks even be enough to pay the secured creditors; anyone got figures? 24gray24
  16. To clarify: does everyone believe that A) the safest place for assets are in gold bullion in a safety deposit box? that a collapse in the pound is inevitable? C) that the government cannot succeed in bailing everyone out? D) that food shortages etc are likely/imminent? 24gray24
  17. hi, my name is 24gray24, I've been lurking since about 2006. Back then, I thought I was mad and the only one to think house prices were crazy, but this site let me know I wasn't alone. More recently, I've read the posts to try to understand how economics work, as I don't feel I get true information from the media. So thanks for this. I've only joined now in case I want to join in discussions. I still rent as avoided buying at the peak, but am still very bearish, so no intention of buying in near future.
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