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FTBagain

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  1. Saw this on the BBC. http://news.bbc.co.uk/1/hi/business/7564630.stm Question is does all this money that the regulators are, belatedly, recovering come off the banks balances sheets? If it does then lending is going to get reduced further, is it not? Can the US regulators chase UK banks if they have been playing the same games?
  2. Agreed. To have a robust economy means having a balanced economy with a mixture of services and industry. (By industry I mean making things I would not call banking an industry, its a service!)
  3. Same for me here in Bath. Although, I am seeing new properties coming on to the market at much more competitive prices undercutting those already there. I would also agree with many others on here that the asking prices are simply way of the mark. Auction properties are setting the pace to some extent, but personnally I think it is the banks that are setting the real pace. With high fees, interest rates and LTV ratios of 25% for the best deals the banks are effectively saying that this market will fall by at least 25%. These are the same banks that cannot afford to state that the market will fall toooooo far because if they do they will effectively make themselves insolvent . So if the banks are admitting to a 25% fall my guess is much bigger falls are likely. As I said earlier I think the time the market falls is the more reliable measure. So far we have seen about 9 months of falls and we appear to be settling into about 1.5% per month. Now previous falls have lasted about 4 to 5 years from peak to trough. If we assume that the main falls occur over the middle 3 years of a 5 year period we are looking at 36 months of falls at about 1 to 1.5%. Allowing for the asmyptotic behaviour of percentages on the way down, we are probably looking at 30 to 50% falls over the next three years. That of course assumes that things do not get any worse. Given the comments recently in the press I think there is a real risk of things getting much worse. So sustained falls of greater than 1.5% per month are quite possible.
  4. When I read the artical I thought he was jumping in too early. I read somewhere that in the 1928 crash it was not those who lost at the beginning that jumped out of the office window, but those who bought back into the market too early. People always seem to focus on how far a market will fall, when actually it seems that how LONG it falls may be a better guide. If this market is anything like the last it could be falling from another three years. In which case 60 to 70% starts to look likely.
  5. It's a bit scary really. Not that I mind seeing a bank go to the wall, after all every other 'industry' we've ever had has gone to the all so why not banking? What worries me is that the Central Bankers and politians all seem to think the big banks are too big to fail. So they'll bail them out with tax payers money. NO! Let 'em fail! Why should I have to pay for some elses mistakes!! :angry:
  6. Yeh, and that is before they factor in the car loans, credit cards and unscured loans. The banks are toast. They won't need regulating after this. They'll be too scared to lend but anyone, assuming any of the current lot are left standing that is.
  7. That could just represent the forming of a bull trap. "Don't try to catch a falling knife," is a very valid investment mantra.
  8. Out of interest, where abouts? In Bath 3 beds tend to go for silly money £200k to £350k. I am seeing drops up only about £10k or so. On say £250k that's miserly.
  9. The interestings thing is that there appear to be more big drops at the very top end of the market. Rich bankers getting hit perchance? What about the more 'average' 3 bed property. These appear to be quite 'sticky'.
  10. I keep an eye on the number of rentals on Rightmove for Bath. Just lately I have seen the numbers rising sharply. There are now over 300 adverts for rental properties on Bath. That's alot for a small city like Bath. People will just stay at home for longer. Also, there is still that 800,000 or empty properties across the country. Housing shortage my ****. BTL is a broken business model.
  11. Situation is potentially even more complicated than just inflation or deflation. I think there is a very real chance that we will see inflation in developing countries, but deflation in western developing countries. Reason I think this, part fro the fact the many countries in the far east for example are already seeing rapidly rising rates of inflation, is that they are in a different part of the economic development cycle than the west. This means that capital (investment) is currently flowing into these countries and has been for the last ten to twenty years. China especially has huge cash reserves and therefore has the potential to spend their way out of trouble. This would be inflationary. Where did all that money come from, us of course. So it is possible that we could yet see a deflationary recession, whilst China et al see an inflationary recession. Interesting times. Makes me thoughtful as I have bought gold. If the deflationary effect is bigger than the inflationary effect I could get hurt, but if the opposite is true I could be sitting pretty. I've made me choice and paid me money...
  12. I originally posted this on the 'your area' forum, but thought it would be interesting to find out if anyone else has seen any thing similar. This particular property represents the biggest drop in price I have seen yet. http://www.rightmove.co.uk/viewdetails-906...=1&tr_t=buy From property bee... 2nd Apr 2008 * Price changed: from '£295,000' to '£275,000 - 7% 3rd May 2008 * Price changed: from '£275,000' to 'Offers in Excess of £250,000' - 9% 19th July * Price changed: from 'Offers in Excess of £250,000' to 'Offers in Region of £185,000' - 26% Biggest single drop yet.
  13. I've been watching Bath for b***dy nearly 5 years and I am now at last beginning to see light and the end of the tunnel. This particular property represents the biggest drop in price I have seen yet http://www.rightmove.co.uk/viewdetails-906...=1&tr_t=buy From property bee... 2nd Apr 2008 * Price changed: from '£295,000' to '£275,000 - 7% 3rd May 2008 * Price changed: from '£275,000' to 'Offers in Excess of £250,000' - 9% 19th July * Price changed: from 'Offers in Excess of £250,000' to 'Offers in Region of £185,000' - 26% Biggest single drop yet.
  14. I've been doing the same kind of calculations for Mrs FTBagain. If you take a slightly bullish set of numbers say salary at £26k at 3.5 multiple you get £91k, or with two salaries at 2.5 multiple you get £130k. These would be modestly above average mortgages in a sensible market at todays wage levels. Now compare these figure against the prices for the average UK home, widely regarded as the classic 3 bed semi. Here in Bath, which has very little going for it in economic terms as far as I can see (some MOD establishments that could well be closed down in the nearish future and tourism). Semis in Bath are going for anything between £200k and £400k. Median price from what I saw yesterday on Rightmove is in the region of £250k to £300k. To get even close they are going to have to fall by 50%. The chances are, of course, the market will over shoot. That takes us into the 60 to 70% drops over 3 to 4 years from peak. We are nearly a year in already so the market has got to get moving. Maybe that is why we are seeing such big MoM drops at the moment. If the market is to achieve such big total drops over the normal cycle period then it is going to have to drop quickly.
  15. I haven't really thought it all through yet but I suspect there could be away of identifying the bottom phase of the cycle. It could be when leading and lagging indices switch places e.g. on the way down the land registry will always give higher values as the market falls away from previous sale values. When the Haliwie and Land Reg data start to agree then we would probably be at the bottom, when they swap i.e. Haliwide go above Land Registry we are probably into recovery. I might go have a dig and see if I can find some data to support these ideas.
  16. It's a bit of a graph fest today so I thought I might as well chuck in my penneths worth. Given that the various indices indicate different phases of the house selling process I have often wondered if it is possible to identify market sentiment from the data. The graph compares Haliwide and Rightmove data from 2003 up to today. I have identified the following: Disbelief - because seller were effectively under priceing back in 04, Greed - because sellers were pushing for ever higher prices in 07 despite many saying affordability was stretched to breaking point, Denial - well I do not need to explain that do I.
  17. If it has got worse in the last three or four weeks what are the Haliwide indices going to be looking at over the next couple of months. 3-4% MoM? they are going to have to beef up the fiddle factors.
  18. Nearest thing to a reasoned answer yet. Interesting point. Of course 8.2% is just imported stuff. Local food, for example, is rising fast as well. I think that currently a lot of the price rising are being absorbed by competing stores. Once a few of them go bust those left standing will be able to hike their prices and restore their profit margins. Rather like the banks are doing at the moment with lending rates. I think inflation is heading upwards for the rest of this year (won't be a straight line).
  19. Saw a very brief story at the bottom of one of the business pages in the Mail this Thursday. Important goods are 8.2% higher today than a year ago. Looks like we are now importing inflation rather than deflation. How on earth CPI is at 3%? Editted: Typo
  20. There is undoubtedly a hefty amount of speculation in the oil market at the moment. There have been some reports lately that up to 60% of the current price may be speculative! However, speculators need some fundemental trend to work with. According to the US Energy Information Agency oil production has been flat for the last three years. That in itself is unprecidented as far has I could find. Production either rose or fell in response to changes in market demand. Given we know that demand is rising, more cars in China etc, but production is flat something has changed. It is possible that some countries are leaving the oil in the ground as it is worth more to them there in the long run than being burnt in cars running the kids to school. However, I have read a few blogs in which guys claiming to be oil industry geologists have aired some pretty scary insights into the state of the global oil industry. I won't detail them all here as it would take a book sized post but in summary 'easy oil' is running out at the rate of 84 to 85 million barrels a day. To give you an idea of what the figure means the UK has about 9.4 billion barrels of oil left in the North Sea (see link below). That amounts to just approximately 110 days worth of global demand. We are consuming the worlds resources at a truely frightening rate. That is why commodity prices are rising. Overall the picture is not pretty at least in the short and medium term. It looks like we may well be heading into a demand lead market for oil for the first time ever. That means if you what to change the price you have to change demand, i.e. use less. That raises huge political issues. Why do you think our glorious lead (Mr prudence) rushed off to Aberdean to ask the oil producers to increase North Sea output. Unfortunately, for him North Oil production has been falling since 1999! Even wthout speculation oil prices are heading north until demand destruction kicks in. The world is going look very different by the time I retire... https://www.og.berr.gov.uk/information/bb_u...rs/Table4_3.htm
  21. Absolutely agree. I have always thought that the bankers were there to provide a service to genuinely productive industries. Same goes for stokebrokers. Thatcher promoted them well above their station and look where we are today. We were once the power house of world industry, we are now a hollowed out shadow of our former selves, seeking easy money by selling over inflated houses to each other rather than on relying on inventiveness, innovation and industry to make things of genuine usefulness that others would buy off us. Quite right too. After all they do not contribute anything of real value to human progress, although prudent lending can be an important facilitator to progress the banks are way way beyond that role now. I bet they would. Let the tax payer bail them and pay their current bonuses. Useless waste of space most of them. The financial services industry is being shown up for the complete bunch of highwaymen that most of them are. Look at the performance of 'managed funds'. Most (if not all) performed worse than is they were left to simply track the markets. Many ordinary folk are beginning to realise that the super rich *ankers are robbing them blind and have been for years. Come the revolution brothers...
  22. I had not seen that until now. 8% since August. >10% come this August is looking pretty much a done deal. That's just 2 months away for YoY. Can you just imagine BBC news when that comes out. Declan Currie will have a heart attack.
  23. I've been watching Bath for about two and a half months now. I have not seen anything go to completed in that time. Does Property Bee highlight completions?
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