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boom_and_bust

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Posts posted by boom_and_bust

  1. Hi,

    The MP has not missed the point. He does not want to acknowledge the point. Many, many people in the UK own homes, many have done very well (on paper) and they are the politically strong. FTB's are the marginal voters in most respects to politicians, as long as NuLab are prepared to keep the cheap cash and public spending flowing and a major external shock does not occur, they will maintain the same course. If he was to take serious action, he would lose more voters than he gains. Don't get me wrong, I think the UK plc is headed for a major fall at some point with the current course of action, it could be anytime given the precarious position of public and private debt in this nation. The rate cut before the last election was not merited for any reason whatsoever except to woo voters. I just don't think politicians will have have any interest for the mess Labour are inflicting on the UK economy until it becomes a vote winning policy.

  2. There is likely to be a raise, but the odds are against anything higher than 0.5% by the end of the year. We need 5+ before we'll see the affect building up that we all want.

    Hi,

    To cause a sudden, sharp crash, I think you will need rates around 7% or more. That is not as impossible as you might think. Despite the pressures of the ERM in the late eightees - early nintees when rates spiraled, there were next to no 'professional' economists predicting the spike in rates and deepening of the recession that was already in place at that time. That is why the market went pop, people didn't see it coming even though the whole economic horizon did all seem a bit stange at the time.

    The affect of a .25% raise will be far harder on industry and the exchanges. Ultimately, that affects everyone. The steps should have been taken earlier. The current fear of inflation in world economies (UK apart Ho!Ho! :blink::( ) was sparked by the visible destruction and breakdown of economies and society of the inflationary and stagflationary era's of the seventies and early eightees. The easing of monetary policy, on the run up to an election last year, was precisely the wrong move to make. But hey ho!

    Come on Eng-er-land!!

  3. Very few people doubt that there'll be an IR rise. There have been several over the last few years, and several cuts. What's contentious is how big they have to get to affect people. There are bears on this site throwing their furry hats in the air at the prospect of a 0.25% rise.

    LOL!

    2,3,4% yes, you'll see the pain. A quarter, a half a percent is nothing.

    Hi,

    This is true. It can be a big deal when you start talking serious amounts of money, if we consider industrial finance, the money markets or exchange markets. There is a lot of excess, speculative cash sloshing around the globe at the moment, it can be switched at the flick of a pinkie. Are we headed toward an era similar to the roaring twenties again, without central bank intervention? That's a big question troubling finance ministers around the world at the moment.

    Come on England! Come on England! England to beat Brazil in the final, Crouch to score a hatrick.

  4. Hi,

    Errr ....... this is unbelievable. I want to read the original minutes of that meeting myself perhaps because that really is passing the buck as it is presented. Perhaps that is why Mervin has been so vocal to (seemingly) distance himself from BoE policy over the past few years.

    In another respect, the UK is still an oil producer, we should be benefiting from world oil prices, many other OPEC members are infact experiencing economic booms.

    That is a larger question I am researching at the current time in respect to some other work. There is a very identifiable link between UK economic renaisance over the past 30 years and the discovery and tapping of North Sea oil revenues, particulalry beneficial to the unprecendented growth of the city of London finance centre as Sterling became a major PetroCurrency on the foreign exchange markets. Have we spent that money wisely? The seventies was a very dire period, prior to the Oil windfalls, the UK economy was a basket case, the nation was close to bankruptcy and had to go to the IMF and world bank for financial assistance. Without the discovery of Oil here at that time, things could have been very different then. On admittance to the EU for example, Britain was one of the poorer nations of the EU. Do you remember that? Oil changed a lot of things in this country.

  5. So what you are saying, is that sam not only posted from your IP address, but has also somehow managed to hack your user password. Is that correct?

    Hi,

    Yes, I guess that is correct. Do you want me to explain how IP resolve hosts work? It is not like a telephone wire to your house. Do you understand that? PM if not and I will give you some pointers toward IP routing protocol so you are better able to understand. I do not know, I do not care how this has occured but my personal email account used to register here has also been under password attack for several weeks. Other members may wish to review the security of this site and their own personal information, that should be covered by the law of confidentiality. Oldie, you need to nip this in the bud.

    Boomer

  6. Hi,

    Can we kill this thread or at least change the original poster's (sam??) identity and avatar away from the one I use. Again, this person has hacked into this forum account and posted on my behalf. It is causing a little confusion. It should also be moved to the Troll sub-forum. I believe Bubb last year was also hoaxed on the forum by a spoof poster in a similar manner. Bored, desparate EA's can be quite devious if you question the current housing market, it seems.

    As for IMupNorth's straw clutching above, I am sorry to disappoint but your views are about the complete opposite of my current thoughts and I do not live anywhere near your end of the world. If Webmaster would like to verify my IP location history, my location is between SW15 london or West Central London or Quebec State, Canada.

    Cheerio,

    Boomer

  7. So what happened Boomer?

    Hi,

    Someone must have hacked the pass. I do not post as much as once I due to various reasons, I do still read regularly and if I come across something useful, I post. I did not consider myself one of the uberbears of this place but judging by the posts over the weekend here, I am preceived that way (who cares?!?!?). It is also amusing and interesting to feel the backlash of some members - listening and discussing people's views is one thing, going on personal attacks is not really the the thing I first came here to participate. (but this is not a face of concern). I do read a variety of interesting views and news here, the PM's and acidic posts are water off a ducks back. Also, I have stated several times in posts that it is possible for the market not to crash and explored those scenarios - just IMHO very unlikely given the current circumstances. If things change, I would modify my thoughts accordingly. Infact, this past six months I have strengethened my conviction that the fall is coming. It is not inevitable in my mind but going the right course. Let's see.

    It was a very nice and sunny day today. :)

    The IP address used to make the first post of this thread is used by two members........

    boom and bust & sam.

    Hi,

    I usually connect here through Bluetooth roaming wireless. You need to make it clear to non technical people that an IP address is not like a telephone line that is connected to the same address. Probably 50K people in central london at anytime will be sharing the same IP address on roaming devices. Lest we get the usual round of consipracies.

    Should this entire thread be deleted as it was not a legitimate post?

  8. After all talk and the imminent death of the dollar, US economy etc - exactly how much is the Dow down then ???

    Surely anykind of decent fallout has to knock a minimum of 10% off - thats about 1100 points I think. Even then that only knocks off the last 1 years growth.

    So, bearing in mind what you guys are always harping on about, we've got to be looking at 2,000 points drop.

    Nah, not a cat in hells chance ..... surely if you guys can see it coming, you'd thing that a lot of other guys would be selling up. The fact they aren't makes me think you don't know what your talking about !!

    :lol:

    Hi,

    That's a whole heap of straws you're clutching in your hand there .... ;)

  9. Hi,

    We're OK though, it's the rest of the world who are one-by-one getting it wrong. There is a new paradigm here, a miracle economy in the UK based on a virtuos circle of house price rises feeding economic growth and then more house price and more growth and so on., If only they would learn, particularly those 'slow-lane' eurocrats over the channel. As house prices continue to rise and fuel economic growth, we will have plenty let over to settle the debts. It's different here because it is a small island with a big population and they are not making land anymore, don't you know, so the only way is up from now on. More growth, more virtuos cycles and the price of Hamsters, saxophones and Ipods imported from China is only going down in the future, just like the price of oil, so inflation will never rear it's head ever again.

  10. Hi,

    Keep an eye on the stealth cuts Gordy is slyly tucking away here and there or transfers across the public accounts to plug the gaping defecit. The road and rail investment fund, the contingency oil reserves, the calls for public sector wage restraint, the police force cuts, the talk of health service cuts and ****** cheapest of the lot for a labour government ***** repeal of the pensioners winter heating allowance this past year. I wonder if many other public sector workers will feel happy to accept wage freezes while others get hefty increases. Now, I am not claiming yet that the sky is falling down yet but keep your eyes on this area, this could spiral and become more open to public scrutiny and the markets if the cuts continue to escalate. This is where Labour governments normally get clobbered when their public sector empires turn against them. Even with these measures, the fiscal situation is not improving. Gordy's potential ace was that the UK was out of sync (ahead) of other world economies. An upturn in the US or EU economies looks increasingly less likely to offer support to us now. The traditional spring bounce is almost past us now, let's see how the new 'miracle'economy fares over the rest of the year. Interesting times ahead!

    Boomer

  11. Maybe you misunderstood me, or maybe you don't mind participating in the rat race for the rest of your life.

    Hi,

    Sigh! How many times? I thought we have covered this. I do not live in the 'rat race'.

    There are far more profitable ventures in life than property. Far, far more profitable. If you can discover a talent or interest in life and stick with it, the world has a funny way of rewarding you for it. The challenge is to find your own particular talent or aptitude to contribute to the world. Once you do that, you're free for life, rat races do not exist for you anymore.

  12. Then I don't know why you are arguing, I said we can continue "as is" for another 5 or 6 years on the current trends.

    Good luck with it, it sounds ambitious.

    Hi,

    In your model, can you account for increasing oil and commodities prices? I only say this as I myself have been digesting the recent OECD economic reports in the past week and in particular, on the UK, they do make quite a fair point that within the next 3-5 years, continuing high oil and commodities prices will retard growth within highly indebted countries with high house prices such as the UK. Yes, the UK specifically targeted in the analysis.

    The conclcusion drawn within the body report that high oil and commodities are a permanent, increasing aspect of the future as third world nations continue to develop and industrialise. At the same time, the benign, deflactionay aspects of those nations industrial output is likey to have peaked and will be upwards from now on. Combined with higher energy costs, the long term outlook for inflation and interest rates is up. They have stressed several times throughout the report that the US and UK are about the most vulnerable nations to these new directions due to the unprecendeted levels of debt. Again, while they see an overall, benign world economic path, the UK is likely to see a rough time ahead, particularly if a shock is encountered. It also went onto chart how the UK tax burden is the highest in history (42.4 per cent of GDP) and is likely to increase due to poor government fiscal positions (they have a different conclusion to you there, on your charts!). Fears over the dollar and US trade defecit, it's impact on currency and stock markets and the UK's historical links to the US economic path are also explored. Remember, it's little over a week ago that a wobble in the US markets caused a wobble in the pound and the FTSE share indices here.

    I would suggest you digest it as well, the world is too turbulent a place not to consider a wider picture. Aslo have a look at recent government cutbacks in spending, even little items like the repeal of the pensioners winter heating allowances, the recent cutbacks in police expenditure and the little matter of £3bn that was transferred out of public accounts from road and rail funding provision to offsetting the fiscal defecit. There are a lot of stealth cuts cropping into the public accounts to try and plug the reckless spending and waste in the fiscal positions of UK plc - you do not even explore this in your analysis. My feeling is that reality is catching up with the 'miracle' economy. If you are basing any kind of financial decision making on your above analysis, I would suggest you dig a little deeper into the fiscal position of the current administration. The full extent of the accounts is never really revealed until after a government has left office.

    http://www.oecd.org/document/18/0,2340,en_...0.html#contents

  13. Hi,

    WTF???!!! This thread?!!? The Topic?!!!? Debt to society?!!?? TTRTR is cracking up, I am assuming it is either sunstroke or lack-of-sleep (maybe lying awake at night worrying about debt). Think more about debt to the banks, most of them have been posting record profits in the past few years, then think about the 100's of billions of tax payer pounds the government has pee'd up the wall with next to no improvement in schools, healthcare, housing and transport over the past decade. Then think of the unsustainble, politically engineered property-boom over the past decade that YOU want working folk to now pay for, at levels higher than anything that has ever previously occured, even by the standards of the historically, crazy boom-and-bust property market of the UK. WHO exactly is looking for the easy option TRTTR?

  14. Yep

    Growth was below trend, and still is, and although inflation was above target it was projected and did fall to target.

    Not cutting them would have meant we would have had, even lower growth, and below central target inflation.

    I think 4.5% is pretty neutral for the UK economy.

    Personally I don't think the BOE should raise rates, although they might. Because the housing market will start (well it already has) to slow (Ie rise more slowily), and that will feed through to lower consumer spending. This will again start to lead to lower growth and inflation pressures falling.

    Thats my view FWIW

    Thanks.

    Hi KON,

    I like reading your own research here and on David's forum but do you really believe 4.5% is a neutral interest rate for the uk economy? Really? Are you letting your heart get the better of your head? Looking at trend rate, this is nothing more than a reflationary rate, I would say 5.5% is a neutral rate for the economy. The last rate cut stumulated spending and approvals, adding nicely to consumer debt and property prices but hasn't helped industry and business very much at all, quite the opposite, it has proped up the housing bubble and currency traders fears but little else.

    Boomer

  15. I hope i have shown my credentials as a Bear on this board(with a few doubts) :)

    But i have one big question mark, which i am now going to try and articulate again, hopefully without one or two members on this otherwise brilliant board branding me a troll.

    My biggest interest over the last 5 years has been the size of debt people have taken on, today it has reached crazy levels. My interest in Debt came before my interest in any possible property crash, they both became linked for obvious reasons.

    I do not have much time today, so i will keep it to the point, why has the debt strain not shown up in the property indicies yet.

    The problems i knew that were going to come from debt have now arrived, people have been stretched to the limit, yet the one asset you would have put your life on as being efected has infact done the opposite.

    So the big question as far as i am concerned is

    WHY IS DEBT NOT KILLING THE PROPERTY MARKET

    Hi,

    Read some of the links and articles I have posted over the past year. This is a labour government and they have used the same means, different methods, as previous Labour governments to spend their way out of recession. In previous property crashes, credit has contracted sharply and people were unable to pa their debt commitments. Under Gordon "No-Crash" Brown, it has become fairly easy to write off your debts and keep your property via Voluntary Insolvency Agreements, FSA tacit support of unsecured overdraft and credit card debts, massive expansion of broad money supply aggregates via the FSA and "independent" Bank of England and concerted treasury actions in the currency and money markets (think back to those old black and white movie images of pre-nazi Germany or America in the roaring twenties when the government were printing lots of notes and people ended up going to the grocery store with a wheel barrow full of money to buy food). It really isn't any more complicated than that, there is not a new paradigm beyond trying to spend out of a normal business cycle (recession or property slump) like previous labour governments. The Treasury/Gordy are relying no the chance that they may have a business cycle out of sequence with Europe, America and Japan and that a turn in fortunes for those nations will favourably affect the UK economy at a time that is becomes no longer possible to spend anymore. Obviously, no nation can carry on living in such massive debt and irresponsibility before the fundementals catch-up and the bills have to be paid.

    If he gets the timing right, it may result in a decade of lean times, inflation or currency devaluation activity but avoidance of out-and-out recession. I cannot think of any other nation who have ever achieved it though. Otherwise, it will be a repeat of the 1970's again. It really is no more complicated than that. Gordon Brown is not a latter day Friedman or Keynes with anything new to bring to the table, he is not even an economist or academic by profession. It is the same old boom_and_bust scenario, just a different decade but this really is about as close to the wind as it is possible to sail.

    Boomer

  16. earn over about 13k I think and you only get the child tax bit which is about 500 quid tops.

    Hi,

    Yes, another pillar of the "miracle economy". YOU pay tax to offset tax credits and bad debts from folk who rent property from Ajay and the other local authourity BTL'ers or buy with 6x, 8x or 10x celf-certs, fuelling a state funded property speculation scheme, all at the tax payers expense. Maybe we can present a bill to Gordy and Tony for this lunacy!!!!!!!

  17. so lets say his take home on the rentals after etc is currently 250k per year. therefore he could pay back 1 of the 6 million in 4 years - effectively the whole lot could be repaid in 20 years. that is not bad at all. his staking plan is completely sound. i agree he should not sell up, he is onto a clear winner - but only because of the point at which he started.

    Hi,

    Exactly, his timing and his tarket market were the right time at the right place with the right product. There may still be some legs left in former social housing yet, I think, from an investor point of view, for an investor with good contacts into local authorities. BTL is quite a diverse market, other areas of it now, of course, are a disaster waiting to happen.

    PS., I think we can expect Bruno "Umbrella-man" Prozac to be posting this very moment on SPIg ;

    "Look. They agree BTL can be a good investment"

    http://tesco.homepages/umbrellas/index.html

  18. i would not to worked up about immigration, immigrants only come to a country that has the work for them to do, (most do anyway) most of the Eastern European Immigration has come about because there has been work for them to do, no work no immigration.

    In the depression years in the states, immigration fell off, why do people believe it will be any different here?

    Hi,

    Immigration is pretty much a necessity now. We have one of the lowest birth rates in the western world, the Brits are not reproducing enough the cover the ageing population. And it is nothing to do with IPODS or binge drinking or easyjet flights or armani jeans or X-Boxes, expensive housing is about the biggest factor.

  19. "By 2001, Ajay owned about 25 properties worth about £1 million, on which he owed some £600,000 in mortgages.

    Today, his 150-strong portfolio is worth £10 million, on which he has about £6 million in outstanding mortgages. It would take a property collapse of exceptional harshness for him not to walk away a millionaire even if he were to give it all up tomorrow and just walk away."

    This bothers me - rather than consolidate his millionaire status and diversify his investments, he's kept the same leverage and expanded in the same market. 40% is pretty good, though, I reckon if there were a sudden downturn he would know about it and get out in time.Also, with that kind of portfolio, giving money to letting agents could be a mistake - why not poach a competent letting agent and give them a stake in the business?

    Hi,

    His plan is fairly astute and his timing was impecable. He either spotted - or fell upon by chance - the mass sale of council housing by NuLab to the private sector and letting of private sector housing to council tenants. Why would he want to sell? He buys particularly into former council estates and rents those properties back to folks on housing benefits - it is a licence to print money as it is a direct link into taxpayer revenue. And as immigration is meant to be going uping several more millions into the coming decades, I wouldn't sell if I was him, those people will need housing somewhere. You know the adage, where there is muck, there is brass. I think where some folks on the SPig (which I actually quite enjoy reading) may be going wrong are those folk chasing grander properties or 'good' area properties. While they may be better able to hold their capital value in a downturn, the rental prospects will definitely go south if the chickens come home to roost on the 'miracle' economy and it finally falls in line with the rest of the world. Ajay will still get his revenue regardless.

    That is an issue though. It is not so nice that he boasts so frequently that he gets up in the middle of the day and generally gives a 'lordly' attitude about his whole franchise. It is tax payers money that he has gained access to, that is not so nice for those of us in the productive economy, running business and paying the taxes to fund his arrogance. He should remember that he is being paid by us to provide a public sector service. I am sure drug barons and pimps on those estates may earn more than Ajay himself, doesn't mean I admire their attitudes or lifstyle anymore. Government policy could change as well, that would be a worry for the business plan if a change of attitude comes along, maybe taxation rises on local authority landlords or they are pushed towards more formalised and regulated businesses by local councils such as housing associations. You never know, when you are getting paid by the government and the tax payers, legislation can change quickly.

    That said, I think on the current state of play, his business model is pretty sound for the forseeable future.

    Boomer

  20. Hi,

    Next few months will see a BBC programme, I guess, saying "Nuclear power is the No.1 priority now".

    Then Nulab will release a dossier saying "We are 45 mins away from the lights going off".

    Gordy's brother's firm EDF will then produce glossy TV commercials showing the success of foreign nuclear instalations.

    Not that that is a bag thing necessarily, just don't like the idea of further feathering the nests of Nulab ministers.

  21. Hi,

    I try to follow as much as I can the development of alternative energy. I am optimistic we are ok given the advanced state of prepardness and research the French, Japanese and US have committed to the area, particularly Iter, EDF and several of the Japanese industrials. Maybe Davy Attenborough knows something I have missed but it looks almost as if it is a case of timing for when Oil and gas are switched to alternatives.

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