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Everything posted by jonpo

  1. Hope is a desire of positive outcomes. 'Desire' has no place in an investment strategy IMHO. Does a 'rational risk neutral investor' desire anything?
  2. Look I was here 2 years before you lot.. So you all are clearly trolls ... Not me. For people like me who have been here for 8 years the crash has clearly happened next one is probably 2019 or so.
  3. and how do you propose bringing about this deflationary paradise ?
  4. Yes I totally agree ...recessions are healthy... They help reallocate resources to more productive use... Creative destruction.. But I also believe you can go too far if your not too careful if you know what I mean.
  5. Fine, but for the hundreth time im not a banker. never have been never will be. I'm friends with some people who work for banks.. however none of them are bankers (ok well actually one of them is probably a "banker" but i knew him years before he stepped foot in a bank). I once did some work for a bank. but no longer. I'm just an average guy from a very average state school who did very average, academically. and I'm just trying to figure out the world and how it works. In London pretty much any party you go to will have someone who has something to do with financial services. So I try to avoid prejudging people based on their profession or employer. I'm just trying to say.. let it go.. there are bad people in the world who may have done bad things... sooner or later those bad things will probably catch up to them.
  6. There is no past and no future only now. Its like golf... you play the ball where it lands. you cant replay the golf shot that Alistair Darling took in 2008. you can only play your ball where is is now.
  7. Yes consume more house.... you will notice if you look at rightmove that not all of the houses are priced exactly the same and so anyone in the market for housing has a choice between consuming say a bedsit in peckham for instance or a mansion in belgravia.
  8. People cut their coat according to their cloth. if prices go up people will be able to afford less and hence buy less house. if prices fall people can afford more house and so it is rational for them to consume more house. Real price falls from 2008-2013 make it rational in my opinion to consume more house, the prospect of the further falls you predict seem distant when i look at the dynamics of my local market. The deposit money isn't gone it is merely transferred often housing transactions involve many transfers of capital its called a chain.. housing capital flows in one direction financial capital the other. has it not been this way for centuries ? Im not sure I understand you when you say "so many threw us under the bus to save jonpo types". we are just now emerging from one of the deepest recessions and slowest recoveries on record. the number of people working in financial services fell by ~100,000. RBS alone employs 140,000 and LLoyds employs 120,000 people. So do you think they should all just have been thrown under a bus? over and above the 100,000 that are presumably now more productively employed elsewhere? so that you can in your own self-interest buy the large detached house you think you deserve at a knock down price ? Every cycle has its malinvestors, and in every cycle the truth washes away the hope they once had. If you feel like you have been thrown under a bus in the last recession by the very actions which were taken to avoid a lot more people going under the bus then I pity you. A part of me kind of wishes you got what you wanted.. all those people going under the bus... the streets full of for sale signs but no credit and no buyers to be found. deflation, unemployment that would make spain seem like a street party. perhaps a good bit of rioting. did you really want to be out of work for a couple of years while we worked through that depression ? do you think that would be good for society ? would that have been justice for those hundreds of thousands of people who have so wronged you ? and where do you draw the line? how complicit was the shoe shine man in your "being thrown under a bus" ? what about the cooks in the restaurants of the banks ? the cleaners of the toilets ? the receptionists ? the people who refill the coffee and vending machines ? the people that move computers and telephones ? the HR department ? after all they are the ones that hire and pay these dastardly bankers... what about the PA's.. what about the girls hired just to look pretty ? what about the fresh interns ? the accountants the auditors the middle and back offices the myriad of IT departments.. are they all really complicit ? and thats before we get anywhere near people who actually do things in a bank which contrary to HPC myth is mostly not about screwing people over. its actually mostly about the provision of fairly mundane services for clients of the banks. my point is this 100,000 people in financial services actually went under the bus last time but I don't cry for them because they were playing the game, the system decided they were surplus to requirements and threw them under a bus. If you too lost your job in the last recession then im sorry its probably the systems way of telling you to do something more productive with your time. even for the people who managed to stay employed 'more for less' was always expected.
  9. Good, I don't want your sympathy. There are hundreds of thousands of other people who have also worked in financial services. And there are sadly many who are psychopaths. At least if I'm entertaining that's something.
  10. Not at all. I am who I am. The system is what it is. I cannot change the system without omnipotence. I can only change myself and make my own decisions. Some decisions I have made perpetuate the system other actions I have taken seek to subvert and possibly destroy the system. I cannot elaborate further. I am acutely aware of my own impotence.. Perhaps you seek to reform the system.. Maybe you can..but I know my limitations I have attempted to reform the system and failed. Now I tolerate it's shortfalls and get on with the game as it stands.
  11. Exactly lo fi... I don't make moral judgement about the state of the world.. I perceive the system and then play the game as I see it... I'm a pragmatic realist. And so in this capitalist system...I play a capitalist game. In my mind this is the only rational thing to do. If this makes me a bad person so be it.
  12. Oh sorry yes your right I clearly have permanently sold my soul to the devil by once upon a time whoring my labour skills to an evil financial services organisation. Only in HPC cult circles would that be considered an legitimate form of insult. In most of the rest of society we just get on with life and play the game not the player.
  13. This is an urgent appeal on behalf of HSBC which acorrding to reputable sauces of the interwebz has both too many liabilities and not enough cash ! If you think HSBC has too many Libilities please burn any of these you have ! If you think HSBC has not enought cash then print a sheet of these and save a bank that is bound to go out of business soon. If you think both then why not both print and then burn... Its not looking good for all those cash based hong kong businesses ! maybe HSBC could rent out that space on the £80 note occupied by their offices !
  14. but what if it always looks like the peak of a pyramid scheme what if it looked like one in 1983 1993 2003 and 2013 ? how do you identify which times it was a good time to buy in vs ones where it wasnt ? prices in 1983 were MUCH higher than they had ever been before EVER... prices had virtually doubled from 1978 (16K) through to the ludicrous average prices of 28K... do you think there wasnt a feeling then that it would all just collapse that prices would return to the sensible values of yesterday ?
  15. Thats only if your only source of possible income is wages.
  16. Your right. I was wrong... good point. Regardless of the exact amortization schedule though (after all its hard to take into account over payments..lump sums and shopping around for better rates to say nothing of the future course of interest rates) you are still getting the principle washed away by both inflation and whatever principle payments you make. and today with CPI (which is often an underestimate) averaging 3% and for instance 2 year discount rates of 2% 5 year fixes of 3%. 10 year fixes at 4%... then your real rate is very low.
  17. over the long term wages prices and earnings will all keep pace with inflation. just because CPI was 3% and wages grew say 2.9% does not mean wages didn't grow in nominal terms. your confusing a nominal with a real I'm afraid. see: http://www.bbc.co.uk/news/business-25347403 as you can see Labour market prices grew over previous years at 2% 0.5% 1.5% 2%... although as you know they juiced inflation via QE to keep the money moving .... I regard that as a one off measure to pay for the crisis and although I expect/assume no real wage increases I expect the Bank of England to do its JOB (of creating nominal stable inflation of between 1-3%). recently they have more than shown that they have the will and the tools to stick to this target.
  18. Yeah well the stuff in my inbox is telling me the "sheeple" as you so eloquently describe them have real deposits of 66K. "In the last quarter of 2013, London and the south east saw the most first-time buyers at 14,700 and 17,100, paying a typical deposit of£66,150. Contrast that with Wales, where the average FTB deposit was just £11,605" so the "sheeple" seem to be investing over £2.1 billion of their own money real money into housing. lets imagine they use this with 95% mortgages thats 42 billion of demand versus how much extra supply ?
  19. Its a free market... strange though that people value a place to live over spunking money on holidays, cars and tellies. but your right if more people placed more value on holidays, cars and tellies then the prices of those things would be higher and the price of places to live would be far lower. I often think what If I was homeless then I could spend far more on cars televisions and holidays.. but then I think well i dont need a car. I have a perfectly serviceable old telly and Ive been on holiday more than enough all ready. maybe if I sleep in the car I could afford a bigger car like a Mercedes van or a BMW estate? and then I could put my tellies in it and drive it on holiday all the time. I'm sorry to be such an **** but that sentence just highlighted to me the true motivation behind many peoples desire to see housing costs drop.
  20. ok fag packet time ...you take out a 30year loan for 100K lets assume 3% interest rates and 3% inflation. year 1: outstanding principle is 100K you pay 3K Interest on principle and 3.3K in principle repayment (6.3K mortgage payments over the year) at the end of the year the balance is 96.7K which in inflation adjusted terms is 93.7K year 15: outstanding principle is 50K you pay 1.5K Interest on principle and 3.3K principle repayment ( 4.8K mortgage payments ) You can already see that in year 15 payments have dropped by 20% in nominal terms. however in real terms the payments have dropped even further to just over 3K leaving you far more free cashflow.
  21. Credit conditions can and do change.. but mortgage term tends to be driven by working lifetime.. so the older you are the less term you have to repay.. this starts to be a problem if first time buyers are in their 30s... but what no one has mentioned yet is that repayment mortgages are front loaded and constantly reducing the leverage/principle so after 10-15 years the repayments will be much lower compared to rent which are constantly adjusting for inflation so as to remain static in real terms. of course there is a wide range of products even now and terms can be reduced or increased with overpayments.. flexible offset mortgages.. switching porting etc ... Edited to add: This rise of 0.7% surely indicative of a sharply falling prices... massive repossessions and the total implosion of credit availability no ?
  22. If I'm long 1/2 of a property ( which is my long term need for property within my lifetime and which I own jointly with my wife ) then I am fully hedged against all adverse future movements in that asset which may or may not happen.. e.g I have reduced my risk to future market movements. As you point out by not purchasing a property entirely with cash, I have swapped some of my exposure to property with an exposure to interest rates, in my view this rho or interest rate risk is entirely manageable and I have further hedged my exposure to interest rate rises (which I currently expect in the short/medium term) by taking on a fixed rate mortgage which incorporates a 5 year fixed/floating Interest rate swap. the rate on the mortgage is entirely manageable from cash and cash equivalents and multiple diverse income streams for the foreseeable future. please don't presume to know anything about my balance sheet. leverage ratios, or exposure to market risk or interest rate risks. for all you know I could pay off the mortgage tomorrow if i so choose or go and live somewhere cheaper and sunnier on the other side of the world. So you see I want rates to rise because I am hedged against rising interest rates. I have nothing at all to sell, and certainly would not sully myself by either attending or proffering any kind or course or seminar ! There is a real problem with buying overpriced property, If your thinking of buying any I'd thoroughly recommend trying to instead purchase under-priced property. the market is what it is.. you cannot change what other people will bid for a property or what sellers will truly ask for a property. as with all markets It conforms to the dynamics of supply and demand. we are all forced to participate in the market so either you buy or you rent or you live with parents ( who buy or rent ). Im not trying to get anyone to buy into anything, and as I say I am fully hedged.... but as I look at the chart of real houseprices on the front page of this site I see that after several years of real falls in prices they now appear to be slowly rising. the peak to trough period of decline 2008-2013 looks to be similar to me to the 1990-1995 period, indicators of sentiment and the wider economy including the equity markets seem to be picking up there is talk about when rather than if it will be time to raise interest rates. Of course I hadn't really expected there to be such incredibly bearish sentiment on here still, but I guess that again is an indicator in itself! If I have any advice It is to, think for yourself, gather your own evidence of facts to form objective opinions. Identify and reject dogma from all sides. and be ready to change your mind when the facts change.
  23. No owning a house even with a mortgage is actually not very much like renting from the bank. I can write on the walls ... Put up pictures ...change all manner of internal configurations.. I can improve the house beyond recognition.. Or let it go to rack and ruin.. No one will come and take an inventory... No one will decide to sell the house from underneath me... No one will raise the rent. No one will refuse to give me my deposit back... The are no furnishings fixtures or fittings that the bank owns that it will want back Owning a house with a mortgage is owning a house with leverage. And so unsurprisingly you become extremely incentivised to try and create value within that capital structure.
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