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House Price Crash Forum

mattyfc

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Everything posted by mattyfc

  1. Nice to see the Sun piling on the pressure for an early election. The Oliver Cromwell speech is a nice touch. We just need to get rid of the corrupt MP's before the election. Leaving them on the ballot does not really offer people much of a choice. Brown must be sitting in number 10 wondering where it has all gone wrong.
  2. Gordon was never going to resign, even if we had 60m signatures. I think we might find we get an early election anyway. We just need to make sure investigations in to MP's are completed and the ones who are corrupt removed. Then we should have an election immediately. The government no longer has any credibility and I am sure that pressure can be applied from HM and the public and we will get an early election.
  3. No surprises here. People can't sell and the supply of rental proprieties is increasing. People need a job to pay rent. Unemployment is rising pretty fast. The capital value of the properties is falling and will this will continue until unemployment turns around. I would substitute wobble for full on self destruction over the next 12-24 months.
  4. The economy has been criminally mis-managed. Ever increasing public expenditure being used to woo the main stream vote without any thought to the long term consequences. Rampant HPI causing a huge credit bubble and near collapse of our banking system. There still seems to be know real plan from any major political party on how to tackle these key issues. They are to frightened to damage there share of the vote. This seems to be a major democratic failing. How can we vote when we don't know what our political parties will do to get these issues sorted out in the long term. The public finances needs to be an example to the rest of the country in how to manage there expenses. It should be clear to everyone that severe cuts are needed to balance the books. Nothing can be ring fenced, tough decisions need to be taken and people who rely on them will suffer in the short term. They key is that society needs to be organized so if you work hard you get rewarded, the poverty trap is removed and everyone has a fair chance to become successful through hard work. We can't excessively raise taxes as it destroys everyone's incentives to work and will end up being totally counter productive. The key problem with socialism seems to have surfaced once more; People need to be financially motivated to generate wealth
  5. Germany has become bureaucratic and inefficient. There is far to much red tape and social protection which stifles business, innovation and removes incentives to work. This combined with the strength of the Euro is going to hammer the Germany's export driven economy. I think Germany will struggle to stay competitive in the long run and could see a serious economic decline with manufacturing relocating to more competitive countries in Asia and Eastern Europe. Germany may not have had the same HPI and related banking problems as the USA / UK, several other euro zone countries that have similar or even worse housing bubbles. Spain and Ireland being the most obvious. The economic problems facing these countries are fundamentally different yet they all have the same monetary policy. This is the one of the great flaws in the Euro zone and is likely to destroy it in the long term.
  6. I have been looking at office / industrial space in E1 a few minutes drive from Canary Wharf and have been offered £10 a sq. ft in some places. Commercial property is getting hammered and Landlords would rather have some rent than have to pay rates on empty buildings.
  7. Price transparancy and reduced transaction costs are pretty small beneficts compared to the loss of control of monetary policy. The real consequence of the Euro for Spain, Greece etc is that UK + other non eurozone tourists will be stearing clear in favour of more competative countries like Turkey and Croatia. Outside investment in these countries will dry up and we can be thankfull that it is likely to come to us instead as the UK is now very competative compared to our EU eurozone partners. We have a good chance of coming out of this recession in reasonable shape due to some sensible economic policy moves from the BOE and the treasury in the last 12 months. Going forward we need to regain control / pay back our public expenditure and restore credibility in the government. The next election can't come soon enough. I think predictions of a recovery with 12 months are wildly optimistic and it could take at least 24 before we start to recover. It could be up considerably longer than this for some of the members of the eurozone. http://www.american.com/archive/2009/may-2...-europe-problem
  8. The Euro makes no economic sense at all. Having the same monetary policy for such vastly different economies makes it impossible to optimally manage their economies properly. Being unable to devalue will cripple the economies of Portugal, Ireland, Italy, Greece and Spain. I expect Spain to go first considering the already massive unemployment (17.4%) and housing boom which was even larger than ours. Their main industries tourism and construction will be severely affected by the credit crunch, and the global slowdown in spending combined with the strong Euro will hammer tourism. I think talk of a recovery in Spain next year is incredibly optimistic. I would not be surprised to see unemployment hitting 25% + in the next 2-3 years and the stability of the government could very well come under threat. http://www.bloomberg.com/apps/news?pid=206...&refer=home
  9. The figures seem to be what was expected. No big surprises. Unemployment looking to hit 3m ish by the end of the year and then we see how high it's going to get. Hopefully should turn round within 18 months or so.
  10. They don't say how they actually reached this conclusion. It is more likely to have peaked by the end of 2010. I would like to know why they think it will take so long? I think that house prices won't bottom out until after unemployment has peaked.
  11. Just looking at the graph on the front page should have been enough to realize the housing market was a major bubble. The economist saw this bubble in 2005 http://www.economist.com/displaystory.cfm?story_id=4079027 The problem is knowing when it would burst and also realizing the banking sector would take a major hammering when it did. The other problem is that government's seem unable to equate HPI to the problems of the banks and seem unable to see the real problem. Which is preventing them from taking action to prevent this from happening again in 10 years.
  12. Probably nothing but a hope to reduce the level of decline by trying to change expectations in the market. They have a very large mortgage book and house prices falling is not a good thing if you are a bank and are going to have lots of customers who will be in negative equity if this happens. Predicting a 30% drop will only make this more likely. Better to predict an upturn to try and encourage people to buy and support the market. You can't seriously expect an institution that has a major vested interest in the market to give you an un biased forecast.. No one rational who analyses what is happening in the economy would be predicting an end to the decline soon. On topic. Good decision which will probably save you a lot of money if you buy back in at the right time in 2-5 years.
  13. How about creating a political party and only standing candidates against the MP's who have clearly defrauded the tax payer. Align it to the main stream political parties but with a pledge to enter a bill to claw back these fraudulently claimes expenses. Considering what happened with Martin Bell in Tatton I believe there would be a pretty good chance of winning some of these elections with the correct candidates. The electorate are not stupid and will not standby and let this happen if they are given another choice. I can't see many voters being prepared to vote for someone who has been stealing from them?
  14. They made these "expenses rules". They made it legal to steal money from us by creating rules they could then exploit. If I hear the " my expenses claim was within the rules" defense again.. We need to go through these expenses and claim back everything which was not directly related to the job they are doing. The next parliament will have the power to do this. Since most MP’s seem to be involved it seems slightly unlikely though. A good idea may be to start another political party which incorporates them main policies of our current main political parties and which also pledges to get back fraudulently claimed expenses from previous MP’s. Or try to get the labour /conservatives to incorporate this policy. At least this could force the main political parties to do this as well. Probably best to have a policy to create long term house price stability as well…
  15. Surely this should read "Leaked MPs' expenses: police called in to arrest theiving MP's and cabinet ministers" Things really must have gone wrong when the people who are responsible for stealing money are calling the police to report the person who produced the evidence against them.
  16. Forcing people to pay for a state media organisation makes no sense at all. Commercial businesses will provide us with all the news we need and I can't see any reason for the BBC to exist. It distorts the market and no commercial media company can fairly compete with it. It does not seem to know exactly why it exists either or who it should be making programmes for. Privatise it, there is actually a competitive market for media, news and sport in which is should be competing. Which is lot more than you can say for the railways or other monopolies which have been created through privatisation.
  17. HM the Queen would have to do this. I think it is very unlikely unless it becomes clear the government are no longer able to govern the country effectivly, major defection of MP's from Labour so they no longer had a majority would probably do it. Vote of no confidence other than that I can't see how it can be done. Mass resignation of MP's would probably do it as well. She would not want to act against a PM who has been appointed by the people at a general election. Although this is not really the case with Brown who was elected by his constituents and foisted on to us without any kind of election. Democracy is failing because the PM answers to no one and can do whatever he likes for 5 years while we have to sit here watching him rob and indebt us. I do feel that our democracy has a bit of a problem when things like this happen and we can do nothing. I hope we are able to make a few constitutional tweaks to prevent this from happening again in the future
  18. "bordering on fraud" This IS fraud, it is absolutly clear. If they worked for anyone else but us they would have sacked and currently be in a police cell waiting to face criminal charges.
  19. How difficult can it be to set up an expenses system for 650 people? Most major corporations seem to deal with expenses for 1000's of employees with no problem of accountability and with clear rules. It seems clear that MP's from both sides have had there noses firmly in the trough. Which is not a surprise since they have been setting there own rules on what can be claimed! I can't see how parliment can have any credibility to carry on when it is clear they have been stealing from the tax payer who they are meant to represent. Parliment should be dissolved and an election called when the summer recess is meant to take place. An indepenet panel needs to be set up to go through these claims for the last 10 years and expenses that are not legitimatly for parlimentry business should be reclaimed from the MP's. They should face the same charges as benefit's thieves if they they have been claiming money for expenses not related to the actual job they do. If we were robbing expenses from our employer we would expect the sack if caught and criminal charges if it was several thouand pounds. We employ these people and I can't see any reason to treat them differently?
  20. I think the key point being misunderstood here is what causes house prices to increase. In the long term houses are funded from people's income and the only way for them to increase in the long term is if income is also increasing at the same time. The housing market will not be able to outperform wage inflation over a long period of time. Consumers will only be prepared to spend a certain % of income on housing. If an ever larger proportion of income is spent on housing the general economy will begin to suffer and the market will correct itself. The market in the UK is dysfunctional because demand in the market is driven by rising prices than the demand and supply. This causes property boom and bust as the market eventually collapses and returns to the long term average. Price stability will create the best long term growth in the economy. This has been realized for retail price inflation and should also be realized for HPI. Banks and governments need to intervene in the Market to prevent these continual booms and bust cycles which so damage the economy and peoples lives. We need to try and create real growth through hard work, manufacturing, entrepreneurship and being more productive with the resources we have. Not with trading endlessly inflating asset values supported by huge borrowing and equity release.
  21. How can the market be recovering when the key drivers of demand in the market are going to decrease and the supply of houses is going to increase. As unemployment rises there will be less demand for property and the people who become unemployed and do not have substantial savings to pay there mortgage will have to try to sell / be repoed. Unemployment is predictated to rise a further 1 to 1.5m in the next 12 months alone. In the short term the market will vary and may even increase in some months, in the long term the market is going fall back to the long term growth trend which will roughly track with wage inflation.
  22. In the short term the market could vary hugely considering how twitchy investors have been. It has been as low as 3460~ and as high as 4600~ in the last 4 months! I can this volatility continuing depending on what is in the news from one day to the next. In the long term the market has already fallen 30% from peak, most of the bad news should be priced in but there is not real room for sustained growth because the main economy which need to drive the stocks will not show any real growth for about 2 years imo.
  23. The FTSE has only just recovered to the level that it started the year at and is hardly surging ahead. With low interest rates and a devalued currency the recession is being slowed down. The VAT cut and will also have helped slightly. A proper economic crash may have been avoided I think, high levels of personal debt and the falling values of property will prevent any sustained growth in most sectors of the economy. The peak in unemployment should be at least 12 months away and the peak of the recession will occur then. I don't think a sustained rally will take place until the economy turns the corner which could take 2 years. I would expect the FTSE to end the year around 4500~ and not get back to 2007 levels for at least two years.
  24. Trade will fall, but not as much as if devaluation had not taken place. I would really be worried about Spain and possibly Italy to be honest. Spain already have 4m (17.4%) unemployed with 2 million added in the last 12 months, greater HPI than us and they are stuck in the euro and have no control over there monetary policy. Tourism is one of their main industries and they can't devalue. Unemployment could easily reach 20-30%. I can see some countries withdrawing from the Euro within the next 5 years. France and Germany don't really have credit bubbles or the major structural issues we have. Unfortunately they need someone to buy the exports that they produce. They will not recover till world demand recovers.
  25. House prices will bottom out 6-12 months after unemployment has peaked. Could take up to 36 months to get to the bottom. Average prices will probably reduce to 100-130k. The market will probably overshoot on the way down and bounce back quite stongly for a short period.
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