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House Price Crash Forum


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Posts posted by Montauk

  1. Inflation is excess money in the system

    Deflation is a lack of money in the system

    1. At the moment people have just discovered that the money that existed doesn't (deflationary), and money is being created to make up the short fall (inflationary).

    2. Germany after WW1 needed to paying its debt to the UK/USA etc etc. When you have to pay a debt and you don't have any money, it is very easy to print the extra money and pay the debt down with that (inflationary). One of the effects of printing the extra money is that the pound becomes weaker, the value of a pound is dilated, the currency falls, imports become more expensive (inflationary).

    If they 'let' the banks go bust you get deflation

    If you bail out companies/banks and start lots of new public sector projects through printing extra money you get inflation.

    If you have huge assets, and some debts deflation is very very bad, however if you have inflation its GREAT. .'. Inflation is the choice of the landed and asset rich, who are also the people in power..... .'. Inflation is a better choice for the people in power....

    Inflation/Deflation is a choice not something that 'just happens'

    IIRC, the problem was that Germany had to pay its war reparations with foreign currencies, which is different from the current situation, at least in the USA, where dollars are owed in, well, dollars, not foreign currencies. I have no idea which or what currencies English debts are owed in. Take note.

  2. Peter Oborne has been writing in The Daily Hate lately - as is his wont.

    Odd thing - I agree with about 50% of what he says and the rest is usually Thatcherite off the wall. (IMO of course.) But he had an article the other day which you can't really fault.

    Socialist Governments have always failed because they are good at spending money but hopeless at creating the wealth to pay for it.

    It is quite staggering that this Government is made up only of lawyers, media wallies (if that is the plural of wally) and career politicians. Besides John Prescott - long since sidelined and dubious claim to fame - there isn't anyone with the faintest experience or connection with business or industry.

    I implore all of you, my concerned world co-occupants to explore libertarian principles. As I'm not good at articulation of such, I invite you all to explore these ideas. Love, Montauk :)

    Is it any wonder we are in this mess?

    Edit - bold to flag up premise for discussion

  3. Seems you've been watching this property for a while. Unless you absolutely love it and are sure that your job is secure, if that applies, then it might be a good decision. That being said, with the crash in world wide trading, if I were you I'd wait a bit longer. I feel certain that prices are going to go much lower from here on in in England. The crash has really just started around London, New York and other major financial cities. In short, I would wait, but we do need what we call "knife catchers" to set the new comps. :) In any case, best wishes!

    might = might not. Sorry about that chief! :)

  4. Hi there,

    I've recently put an offer in of £138k on a repossessed 2 bedroom mid-terraced house in Eastleigh (South East). The property was originally bought as a new build in 2004 for 180k. The property was listed with an asking price of 160k in Nov 2008 which was then dropped to 155k and subsequently 150k in Dec. I placed an offer off 138k in the middle of Dec which was initially rejected but literally yesterday they have now come back and accepted my offer.

    I know that this forum is slightly bear biased but is now really a very very bad time to buy a house when at this point in time I believe I have a good price? I have a 20% deposit and as the sole buyer won't require a mortgage of more than x3 my salary so I believe the property is quite affordable. The house is perfect for my needs and good for commuting and good for potentially getting a lodger in if my circumstances change for the worst.

    If you were in my circumstances what would you do? Do you think now is just way too early to jump into the property market and would almost be guaranteeing myself to be negative equity? Would you perhaps look to push the price down say 20% below what you believe the current value of the house to be to effectively price yourself clear the remainder of the crash knowing the repo company will basically tell you to go away? Or would you walk away the house and watch the market for the next 6-12 months sure in your mind there are massive drops yet to come and now is just the very beginning?

    I'm kinda bricking myself and could do with some advice! :(


    Seems you've been watching this property for a while. Unless you absolutely love it and are sure that your job is secure, if that applies, then it might be a good decision. That being said, with the crash in world wide trading, if I were you I'd wait a bit longer. I feel certain that prices are going to go much lower from here on in in England. The crash has really just started around London, New York and other major financial cities. In short, I would wait, but we do need what we call "knife catchers" to set the new comps. :) In any case, best wishes!

  5. Firearms are firearms. It doesn't matter if the government has bigger ones, or more of them because if a significant portion of the population has them then the government can't opress them.

    Do you think that there is any realistic chance of the US ever being run by someone like Hitler, Stalin or Pol Pot when there are over 200 million firearms in civillian hands? It would never happen in a million years.

    An armed populous prevents nasty things happening. How many genocides can you think of which have been perpetrated against people who were well armed? Would the butcher Mugabe be able to do what he's currently doing if everyone in the Country were armed? You can't drag millions of people off to the gas chambers if they are all armed, I dont care how big your army or police force is.

    Take Switzerland, for example... They are armed to the teeth. No Nazi walk-ins there, now were there?

  6. It's true that many of the people are dumb bovine morons but before we blame entirely them for their ignorance, it's worth pointing out that the state education system in the UK (and America) has been designed to churn out dumb, stupid people.

    The last thing statists want, be they Conservative, Labour, Democrat or Republican, is intelligent people capable of critical thinking. They want dumb bovine morons who have just enough intelligence to push the buttons and shuffle the paper that keeps their system going.......for THEM, not for the people.

    Everything in modern society is geared up to keep the political elite and the corporatists in their s*****y mansions and their overpaid jobs. They don't give a stuff about the people. When you hear about hedge fund managers paying less tax than the office cleaners who clean the wax out of their telephone earpiece, you'd think people would twig what an insane system we are living in.

    But no....There's always another load of $hite on the tube to keep dumb people dumb and anaethetised.

    When I hear politicians say, 'This time it's different,' I chuckle to myself and think "Like hell it is"

    But this time, the consequences of what the paper money currency system and 65 years of statist socialism have done are so serious and so all encompassing, it'll be THE PEOPLE saying "This time it's different".....

    because (hopefully) they will finally twig what a godawful mess the politicians and the bankers have left us in.

    Roll on the revolution. It's well overdue

    Good luck with that without guns. :)

  7. At the risk of sounding like a gold bug (which I am not), bonds are just another form of paper money. They are only worth as much as the holder's willingness to believe that they are worth anything.

    Most bonds default because the issuers can't afford to repay them. There is usually a long workout process where all debtors (and equity holders depending on the nature of the borrower) agree to restructure the debt and accept a lower repayment amount in either cash or new bonds. This lower repayment amount is called the recovery rate that some on this site have been talking about wioth respect to Iceland, Lehman Brothers etc.

    There are other variations called standstill agreements where borrowers and bond holders agree to receive no interest / coupons but agree to "stand still" while the borrower sorts out what they are going to do rather than force a bankruptcy.

    The most daunting situation for bond holders is repudiation where a debtor simply refuses to acknowledge the debt. It is really only government borrowers that can do this. Ecuador has essentially taken this path.

    As another poster pointed out, MBIA and Ambac were the two largest insurers of bonds issued by the state and local governments in the United States. MBIA and Ambac are closer to defaulting (mostly because of their involvement as insurers of tranches of subprime CDOs of RMBS) than the bonds that they insure but the recognition of their situation has driven prices lower.

    Traditionally, borrowers have made every effort that they can to repay debt for the very reason that you mention : who would buy a bond from someone who has already demonstrated their willingness to default or significantly restructure their debts? Russia, Argentina and Brazil are good examples of this.

    My personal opinion is that the credit bubble has meant that people have been very greedy and borrowed large amounts of money to buy bonds from issuers that are known to be "unsavory". This whole sector is going through a deleveraging process too which is pushing down the prices of a few quality assets as well.

    Leveraged purchases of risky bonds have all the same risks to them as BTL. As long as you can keep servicing the debt from other sources you are fine. If you can't, the situation can wipe out your wealth in a flash.

    In the end, bond and housing markets are a bit like a Ponzi scheme : they all rely on more and more people to keep putting in larger and larger amounts of money to keep the scheme going.

    In a Ponzi scheme, the money comes from "investors" who will be wiped out in the end. In the housing and leveraged bond markets, some of the money comes from investors' equity and increasing proportions of it comes from debt. In the end, most of the equity and much of the debt gets wiped out if the leveraged housing and leveraged bond schemes collapse as they inevitably do.

    Exceptional post. Many thanks.

  8. Not content with guaranteeing the entire banking sector, they're now raiding the legacy of the Celtic Tiger. Ten years of boom with nothing to show for it in the end.

    It's such a shame that the sheeple don't listen. They only listen to the tele, unfortunately, and the tele only reports news after it's already a fait accompli. So sad for all the people who are losing their shirts now. I've met many. They didn't even ask me how I knew what was going to happen. Sad, sad, sad.

  9. maybe if houses could only be sold for cash and only one home per family then we might have sensible prices.

    Have patience! Sensible prices are coming your way! Look at all the job losses and banking problems! Prices are sticky on the way down.

    I often find that their first impression of me is that of a renter, like i smell of renting, and they know it and their gut reaction is to pass me onto their rental section and that it hurts them to treat me like a buyer, even though that's what i am. .

    Not at all! You are a first time buyer. They need you, not the other way round. Take a year or two and clean up your credit score, if need be. Save more of a down payment to be an even stronger buyer. In two or three years, sellers are going to be drooling over your financial strength in a desperate market. (Disclaimer: NOT investment advice, merely my opinion) If I were in Las Vegas or Florida, I might be tempted to buy at this point, but New York and London are still in the early stages of the housing crash, IMHO. In any case, best of luck!

  10. At that hesaid it would be pointless seeing the property because an offer of nearer the askingprice had already been put in.

    All agents say that. It's an automatic response, whether true or not. How can you tell when an agent is lying? When their lips are moving! :)

    I'd advise you not to let on about what your offer is going to be until after a viewing. And dodge questions about your finances. It's really none of their business! Just say that you have a down payment, a job and a good credit score. Underestimate your annual salary a bit, so they don't get to take advantage of you, etc. Less is more! (information) Be friendly, but don't trust them. They are certainly not looking out for you.

    But most importantly, I would wait until 2010, to see how this collapse pans out. If rents go down, and landlords are begging for clients, you are going to kick yourself for taking on so much responsibility and illiquidity needlessly.

  11. The beauty of google is precisely that its commercial interests are so closely aligned to those of its core users: that is, all of us when we search for information. Google MUST resist the kind of pressure that would tend to corrupt it, precisely because it would lose its core market if it allowed any kind of commercially-driven bias in its core results. They make strenuous efforts to counteract spammers (the snakeoil called "SEO") for the same reason.

    Try this search engine, which includes results from several search engines: www.dogpile.com (I avoid goo... because of their appeasement of the Chicoms in censoring websites.) I see Goo... as anti-freedom of information and a virtual monopoly. They have too much power, I say.

  12. "Most of this money will never be repaid and that is inflationary, hugely inflationary infact. But what is by far and away the greater evil in this story is the realisation that there are just too many of us for this planet.

    In the future you are unlikely to be rich as there is a global oversupply of human beings. Labour is now cheap, skills are cheap and they will stay that way until many of you die.

    The outlook today is that most workers will become poorer over their lives!"

    So, is that inflationary or deflationary? I would think the latter.

  13. I could not agree more with your comments. Brown boasted about growth for years, this was all borrowed money which as we are learning now borrowed time. It was only a matter of time before his 'dream' went up in smoke, and boy it sure has!

    Recovery will take place when people learn to pay down their debts and only live within their means. Once people start saving the banks will therefore be in a good position to lend to everyone again albeit taking risk into account and not lending to any tom, dick or harry.

  14. Means testing? Well, that's what you morons get for voting for liberals and socialists. Next thing you know, you'll be wondering (again!) where you're fooking weapons are when the enemy invades. I swear, you guys are fooking retards.
    Alright, you're not fooking retards, but you are fooking gobutits. Is that better? Come out, come out, wherever you are...... It's late.
  15. Are you aware that savings over 3k would make you ineligable to claim any benefits should you lose your job ?

    I left my job and currently doing some training before returning to Oz, however was suprised to find that having paid over 2k per month in deductions for the past five years I am entitled to nothing at all because I have savings.

    For sure 60 quid a week is not going to pay for much else than my fags, or half a night out on a Saturday with a walk home rather than the usual 20 quid taxi. But it would be nice to see that people who saved for a rainy day are not penalised.

    Means testing? Well, that's what you morons get for voting for liberals and socialists. Next thing you know, you'll be wondering (again!) where you're fooking weapons are when the enemy invades. I swear, you guys are fooking retards.

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