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Everything posted by boom_and_bust

  1. Hi, Also, the continuing budget defecit will require withdrawal from the EU stability pact. I know we like think that everyone is breaking it at the moment but that isnot the truth. France hovered a while, Germany was given provision for a 4% due to it's far greater economic size and East German runification. Britain is infact about the worst offender. Gordon signed the ratifiaction revision in March this year, promising to keep within 3% defecit in the short term, balanced budget over the longer term economic cycle. That was his main motivation for moving the goal posts of the business cycle earlier in the year so he could gain some breathing space from the EU central bank. Continuing us 7% defecits? Go read the US media comentary on that position. Boomer
  2. Hi People have to make their own minds up, it is very difficult if you have never lived through HPC before because it invloves emotions and aspirations. You are likely making a 25 year decision. What is 1,2,3 years in that process? It's like sex without contraception. It's a great feeling for a short while but what happens when you get an 18 year commitment at the end of it? It's a big, big decision with long term consequences. Approach mortgage debt in the same way. Most FTB's cannot afford. I do not suscribe to the idea of people holding back for a bargain. Most do not have the choice, simple. So what is a couple of years? What is your alternative? Lie on a mortgage application to live in a studio appartment with your wife and faimly for the next 10 or 20 years? What happens when that dream job overseas or in the other end of the country comes up? And you can't sell or have a ton of negative equity around you neck? What happens if you get crocked and you can't work for a year and you have a £1200 pm mortgage on your back? What happens when the missus wants kiddies? I think like Cuz said, this is a big financial pyrmaid scheme. It doesn't respect sensitive feelings or bad days. If you can't stomach the emotions it involves, if you can't slap your self every so often and detach your brain from your heart, you will have alot of trouble seeing the cycle through. If you really have to buy, buy! You have lots of information around here and on other sites and other commentators, very view counter balance views to the mostly VI controlled mainstream media. Estate agents and mortgage lenders are not your friends, they will use whatever tactics they can to detach your brain from your heart. During the last crash, around 1993-1994 as the market was still falling and bottoming, it took alot of guts to buy then. It works both ways in markets. You have to make your own mind up and not blame anyone for decisions you make.
  3. Hi, Spot on! People are really getting too impatient, housing markets take a long time to correct. You really can't make any meanigful conclusions for, say, two years, as pointed out. 20% to close 0% during the past year. Even if the VI spin machines go into overdrive, the best they can muster is a stagnation over the coming year but to be honest, by that stage, it will be very difficult to spin it out any further. The cycle goes up, pauses at the market top, then comes down. The day turns to night. The earth spins in it's axis. It's the way of nature. Look at the headlines for the last crashes, this is the fiercest point of spin in the cycle, the VI's have to try to covince people that a stagnation is occuring and not a market top. Which is pretty useless at this stage of the day, the 1.2 trillion of debt, the poor economy and huge fiscal and trade defecits are just not going away. It's a pyramid scheme at the moment and, like all other pyramid schemes, those at the top are reliant on reaching the pyramid top and extracting money from those at the base. In this instance, transferring several hundred billions of interest only mortgages onto the late entry market suckers. Seriously, think for a minute. Interest only mortgages? They were born in the years of 20% YoY house price rises, that is the only way they are viable, 6-8 times income mortgages as well. They cannot survive in anything other than 15-20% HPI markets. Economics just don't work that way. Never have. Also, the indices are not scientifically based. Imagine! I did my own research and digging, I would urge you to contact the big two, Halifax and Nationwide. While I am not saying they outwardly lie, they do choose to base their surveys on small market samples, they vary the choice of approvals (not even sales) they include for each survey, they do not allow public or independent scrutiny of their survey methods, the list goes on. I am not really sure where you could get any unbiased market indices for the market. Even the FT one, let's face it, we already know the Times Chief Economic Analyst is Bull biased beyond comprehension, I can't believe that a media group that is all but VI is suddenly going to be happy with a sister publication not toeing the line. Look at the headlines for the last crash, all these sources were trying to spin the line "market bottom reached", "Market set to boom again", deep into the last cycle downturn. Very little consumer protection is afforded to home buyers, you are the new born lamb with a pack of jackals circling around, waiting for the moment to pick you off. In my recent letter to the FSA I made a point that I believe they should, like every other investment product, have vendors print on the publications "The Price of Homes Can Rise and Fall" in addition to the usual "Your home is at risk if you do not keep up repayments". Stick with it. It's risen over 7-10 years, now it's stalled. It will not fall in 3 months, more like a bumpy ride over 3-4 years, just like the last two crashes. Look overseas as well, plenty of other countries are seeing house price falls. This last year saw a definite market movement downwards from the crazy years. This is the point onwards when it gets interesting, not the time to get depressed, but this is the time the spin will be super strength as the usual claptrap of stagnation, new economic realities, etc., start coming out and the raft of usual fear tactics the EA's put forward. It's all in place. Boomer
  4. Yeh! Bloody People's Front of Pacifist bears! Splitters!
  5. Hi, And the Awooga Bears. Don't forget them. Awooga! Awooga!
  6. Hi, Like some other posters who live near Central London, who anecdotally have seen roughly 10-20% falls in market valuations and properties sitting on the market for 12-18 months so far (I have posted example links before), for Halifax and Nationwide not to be showing at least 5-10% falls has not really stacked up. OK, regionally, other parts of the country are moving differently and different sectors of the market can scew the figures. We know that. So I wanted to dig a bit further. I emailed (no relpies) then wrote (twice before replies) to both these organisations asking how they come up with their HPI indices. Luckily enough, the daughter did an MSc in Mathematical Modelling, so I was very happy to scrap with them. Long and short of it. How do you think they come up with figures like YoY 3%? Do you think they take all the mortgages taken out by customers and add them all up, maybe with a bit of seasonal adjustment and market weighting? No! They do not. They make a very small market sampling, less than 20% of their APPROVALS (not mortgages accepted and started - so if a chain cannot move but the approval in principal made, that is included even though no house sale is made). They also reserve the right to vary the mix (the properties chosen for the indice) and quantity of that sampling (vary the seasonal bit and weighting figure) at any stage (Halifax completely revamped it mid way through the year) and they do not lay open the actual models and figures used in each survey for public inspection for transparency and consistency. Nor is it layed open to independent monitoring. Now, that is neither impartial, rigourous or continous. Basically, I was given some very vague descriptions of the methodogies with plenty of small prints disclaimers throughout the paper saying "we reserve the right to vary methodology at any time" and "The society cannot be held liabile for statistical innacuracies within indices" etc., etc., Now, you try purchasing any form of share or currency related investment and see the rigourous compliance and wording trusts, banks, etc., have to undertake to sell to the public. With housing, it is like Dell boy going around the back of the lockup to fix you up with a cushdy investment. So, my next letter is to the Financial Services Authority with my views and correspondence. I don't hold out much hope of getting a sensible reply but I'll let you know how it goes. Cleaning up the industry is a better hope of ending the boom-bust cycle for Gordon next time around I am reckoning. Boomer
  7. Hi, What an incredibly brave (and truthful) article he made. At last a balance to the economics clown over at the times. The number of more realistic articles in the mainstream media has crawled up a little bit over the past couple of months, granted from a base of zero. What I would also like to see questioned in the media is a call for resignation from Tony and Gordon in the same way that Blunket had to go. He supposedly had a conflict of interests in buying shares in a firm pitching for public sector contracts while he was an active cabinet member. So if Tony and Gordon are actively pitching SIPPS while they are in the top jobs at a time they are BTL investors, that warrants a conflict of interest to me. We need some impeachment action double quick. Also, I believe the message of VI media, VI politicians and the financial debt consequences that are being irresponsibly inflicted upon the economy should further be higlighted to a wider audience. I would propose construction of a carnival style float truck (you know, the kind of thing you have at the Notting Hill carnival or Clapham mardi-gras) in the form of a huge papier-mache egyptian pyramid being pulled by a legion of papier-mache ftb's with ropes and supporting, rolling logs, like in the biblical era of hebrew pyramid building, overlooked by two huge papier-mache figures. Those figures will be Tony and Gordon dressed in full Egyptian Pharo regalia, cracking whips. The banners and leaflets would carry the title 'The Great British Housing Pyramid Scheme". The float truck should drive continously, all day, around that square of grass opposite Big Ben and the houses of Parliment, where all the traffic circulates around and where that guy who has been protesting against the Iraq war for the past 5 years is setup with his deck chair and thermus. "Land of Hope an Glory" should be played at high volumes from speakers mounted on the float truck. Anyway, I will admit that I had a few drinks at the golf club this afternoon but I maintain this to be one of my better and more lucid posts. All the best, Boomer
  8. Hi, Well, have a look through the land registry figures. There are falls in the figures. And there are rises. So there is a way to go yet.
  9. Hi, And visa versa. That could be a loss as well if prices fall. There are several property markets around the world in decline as we speak, it has happened plenty of the times in the past in the UK. You may destroy your credit history and theoretically, under British law, debt can still be charged as a crime if negligence or recklessnes can be proved. Theoretically you can still go to jail or at least be held responsible for that debt for the rest of your life. In reality, you would really have to screw up to do that (like our BTL magnet friend in the earlier thread). So it's a gamble now. Make your choice according to who you are I guess, your stomach for risk, debt, etc., Regardless if you believe that we are at the mid point of some kind of HPC or not, you have to approach the current market as a gamble at this time, too much speculation and analysis exists for it to be a clearcut decision as it was when prices related more closley to the economy and incomes. Make your own mind up how big that gamble is to you personally, whether housing is just a home to you or whether your perspective is as a property developer or BTL landlord. And remember, when prices correct to their long term average (as they always have in the past), you will then be facing a normal market where maybe you will not make specutacular gains but housing will again become a reasonable investment as well as a home. Buy now and the risk side is that you do not have a home you particularly wish to live in longterm and extra extra, extra debt. Boomer
  10. Hi TTRTR, Just out of interest, how many crash cycles have you traded through yourself, in the past? Boomer
  11. Hi, Not a bad policy. I think it is well under way, it is developing up in just the same way as the last two, just sit back and wait is all you can really do now. We are at the plateau of the HPC curve - it was harder a year or two ago to be taken seriously when there was no bad economic news and the media and EA's had no reason to sound even slightly bearish. Just look though - 20% to 3% HPI in a year masking some reasonably big and individual, regional falls. Economic news pretty bad, bankruptcies and repocessions galloping away. I don't think there is any other way to read it but a decline here onwards unless the economy and consumer debt changes combined with Gordon getting the trade and fiscal defecits under control. I do think the big swinging factor in this HPC is the level of investors in the market - or more specifically, amateur investors who have piled in. It need not be a big economic shock necessarily. Panic runs when-as the anecdotal pricing falls become evident, if high street sales and sales volumes do not pick up around christmas, which may cause large job losses after Janaury, if sterling tanks only moderatly. The difference in this markey from the past ones is the level of gearing and debt that makes things all the more sensitive, it may not need be the sledgehammer event people are expecting. Agreed though, it can become unhealthy to dwell on it too much. Boomer
  12. Hi, Or maybe the article desciription of "Her dark eyebrows are arched, making her look more Monica Bellucci than Mary Poppins" should be replaced by "a bulldog chewing a wasp"? Nah, didn't mean that. I sometimes think she has a dark and sultry look, smouldering with sireness charms, beckoning passing sailors to go to the local EA's office. I like the quote in the article 'she seems to be on every television property show'. I think that is more likely beeny at the moment - have you noticed she seems to be in about three different shows at the moment? Boomer
  13. Hi, Poor old Kirsty. She has never had to really work for a living, never took advantage of her faimly's incredible wealth to do something useful with herself and now, it appears all to apparent, she's never had to deal with living to budgets and things like working and saving for a living. So now she is perplexed how a nation up to their a3rze in debt, stretched to 7-8 income multiples, cannot propel the propertry market ever higher. Still, she's got her flat fixed up nice in the picture. Boomer
  14. Hi, Absoultley. I have been pleading my daughter not to buy this year and the penny dropped with her when we viewed a two bed flat at East Sheen, London, near to my area . The appartment she was looking at was on at £179K and was infact bigger than the flat she had looked at in the same block, 10 months earlier at £199K. I have seen this all before. Just go and look at the headlines of the previous crashes here. People didn't know prices were falling until maybe two years after the market top and the Estate agents and mortgage lenders were still touting soft landings etc., It's there in black and white, they (particulalrly the Nationwide and Halifax) forfieted their credibility in the previous crashes. Do not fall for it. It should become increasingly obvious over the coming year. Boomer
  15. Hi, Yes, there is a long way to go. I know it gets repeated everytime but here we go again ; The boom took 7-10 years to rise. We have seen the past year go from 20% to 3% HPI as transactions fell heavily and the economy has weakened, repocessions and bankrupctcies up. That would suggest a peak or plateau of the market. We are at the top of the hill, my gut feeling is looking downward on the negative side of the slope now. The downside is looking around 3-4 years at least. None of the other UK HPC's went from start to end in a year. Patience, patience. I can of course be pursuaded otherwise, maybe if a big economic boom occurs now, if the fiscal and trade defecits slow markedly, if more of the independent analysis and academics come out on the side of rising prices. Definitely not the right time now mind to be listening to EA's or mortgage lenders at this juncture. You can't sell a house instantly, housing markets are not like shares or currency or gold. Boomer
  16. Hi, Phew, thanks for that Jack! All is ok now. I should just not question things ever. Never, ever. I don't know where I would be without your help. Cheers, Boomer
  17. Hi, Going to have a mill over it myself sometime this week. Yep, bell-weathers I will be looking for is ; London-vs-South East-vs-North and Wales-vs-regional trends, new builds, 1m+ homes, one bedroom and studio flats, UK's poorest and wealthiest neighbourhoods. Boomer
  18. Hi, Yep, it could easily go that way. In reality, that is the way it should go. I have been puzzling over the last six months how, in the face of the current economic factors, how so many economic groups like the OECD, IMF, etc., independent analysts and investment bank economics departments can broadly agree on price corrections on the horizon, that the market has held the stagnation for any period at all. It was that comment that the current BoE chief economist made this year that *** a housing price stagnation could be held up if economic sentiment could be steered away from negative thoughts ****. I don't know if anyone really picked up on the magnitude of that comment, I personally think it is breathtaking, bodering on professional mal practice or corruption (some could say, we of course on the forum do not imply this). That is the force of the VI spin on things. For me, that confirms BoE are not independent and are sacrificing the economy in a vein attempt to prevent the inevitable in the short term. It will just make things worse in the long run. The Dutch tried it and it failed spectacularly and their economy was not debt driven at the time of their property market decline, it was in really good shape. Somehow, I don't see Gordon coming out like the Dutch chancellor and announcing it was an error and things may get bumpy. Cripes! Tony is a BTL landlord himself! And just look at the political landscape. The government has at the same time commisioned reports into 'problems in the housing market for FTB' and 'effects on small communities of rising house prices for second homes'. Well, that is a dead easy one to solve. You bring back mortgage tax relief for FTB's as in the old system or for small or rural community workers. Why haven't they done this? When it has been done in the past? Why have they instead distorted the market in favour of BTL investment (SIPPS) etc.,? It is obvious. There is no housing shortage, percieved problems with FTB and rural workers could be solved tomorrow with the tax system. This is the force of damage the current administration are prepared to go. It is flawed thinking that will inflict terrible damage on a debt based economy. For that reason, I see the current shower pulling as many dirty tricks as they over the coming year to try and present the stagnation argument. Taking a look at the reporting of the last crash, maybe we can draw a comparison with the 1990-1991 period for now whereby the market was also presented in stagnation mode. That did last maybe 20 months before it was really too obvious for most people and VI, journos and politicians were risking all personal credibilty with the stagnation line, so it is very much in keeping with history. Where it is different is the current level of pricing and debt, the falls could be even bigger this time for that reason. The plateau could could drawn out by combinations of factors for an extra 6-8 months for these factors.
  19. Hi, Patience, patience, for this is the interesting year ahead. Some of the posts get very murky and confusing with the current round of VI soft landing spin circulating around. Let's recap where we are now ; A year or two ago HPC was completely dismissed. Prices on many indices were still rising at double digit levels, there were a few academics and analysists making grumbles about the state of the economy but generally it seemed that all was fine. In the last year just look how the landscape has changed. The VI spin has moved to a stagnating, soft landing of flat prices and just recently talk of how some modest declines may occur for just a short period. Don't be fooled by it. Just look up how they reported it in the media during the past two crashes, particularly the Nationwide and Halifax. The long and short of it, when you see a housing market and personal debt levels rise to historically, unprecedented and unsustainable levels over the course of 7-10 years that then slow to a halt, what do you expect to happen next? We are at the turning point of the market, the top was maybe a year ago, it can only be down now in the face of a failing economy and no more engine of growth available. Personal debt expolosions and public sector expansion helped provide the fuel, both are (and have to be) cut back in the coming period. It is important to remeber it, look at history and other HPI countries now so as not to get lost in the VI spin and the less convincing bull posts. If the economics of it changes, then maybe. However, as it stands, the kind of economic rebound required to even sustain the current levels has never occured before, it is literally an economic miracle that would be required from now on. That said, the VI spin is immense this time around, maybe stronger than the previous occassions. BoE has obviously sold out and is making decisions contrary to the needs of the economy in order to try and prop up the failing housing market. I have little doubt it is useless, the fundementals left a long time ago. Maybe the coming year could hold out at 0-2% YoY growth for another six-eight months, by the year end of 2006 I think economic factors will start to show some small, month on month falls, maybe the odd, full 1% here and there. That will be market top emerging at the other end. 2007 would likely fall more regularly with 1% MoM falls. It took 7-10 to rise, so expect a sluggish, sometimes rising, often falling, drift down over a space of 4-5 years, maybe market bottoming at 2009-2010. If the economic horizon changes, I will reconsider my views as necessary but I lived through two previous crashes and I have observed the housing markets of three other countries at first hand, I follow business and economics around the globe closely. Boomer
  20. Hi, So there we have it. Charlie Bean, the BoE's chief economist, wants to keep a lid on economic conjecture within the media and the masses. Nothing to do with fundementals, the economy, just keep the masses up to their a3se in debt and maybe, just maybe, the stagnation can be propped up. Nice one Charlie, you are a complete clown. Boomer
  21. Hi TTRTR, I live a couple of miles downstream from Battersea powerstation and it has been undeveloped for as long as I have had a home in London (30 years). Now, you will need to check up on the current status of this but I have seen in that time numerous residential redevelopment plans come and go on the site but on each occassion I was following the stories, the private sector investers pulled out because of the environmental costs required to clean the land site. Their are alot of toxic substances deep in the soil relating to the power burning era of Battersea like lead, sulphur, arsenic, etc., that would cost alot of money to clean up and the local authorities have never been prepared to foot the bill. There was talk about twenty years ago of the government intervening and stumping up the cash for development of Civil Service offices although the EU required a full health and safety task force to be commissioned for the project so it fell through. As I say, it has been like that as far as I can remember, 30+ years but I don't know what they have been up to recently. Boomer
  22. Hi, I partially live in Canada, I travel for work several times a year to west coast US. From first hand experience I can say there has been some massive falls in San Fransico, Reno, Portland, Las Vegas and San Diego, we are talking 20-30% in some areas. It is pretty easy to check this up on the US media reporting as well. All is not well at all in the West property market but the US I also think is far better placed to weather these real estate falls. It is still a large manufacturer and can trade within itself. Boomer
  23. Hi, I think you're wrong there. Most of the analysis is based on the unsound economics of the current housing market, about the declining economic conditions of a overly debt burdened economy that is showing record numbers of bankruptcies, record breaking high street sales slumps, sharply rising home repocessions, declining economic growth and a yawning trade and fiscal defecit that EU regulations require Gordon Brown to reduce, most probably through rising interest rates at a time when pressure is already on sterling in the currency markets to riase. Analysis is also drawn on the past two UK property crashes and the evidence of similarly debt based HPI economies experiencing falls elsewhere in the world (Australia, NZ, Spain, Holland, US). Have a look at one of today's articles mentionned on the BBC about an established BTL professional investor who has been declared bankrupt by a combination of falling property values and lack of renters on 50 properties within her portfolio. http://www.bbc.co.uk/insideout/westmidland.../property.shtml It's something to consider at a time when we have seen HPI fall from 18% to (maybe) 3% in twelve months at a time also when housing transactions have nearly halved. These do not seem to be the right conditions to put further upward momentum on an already unsustainable market clearly in bubble trouble. Boomer
  24. Hi, Actually, I think it is a good idea. I was a bit sadened that one of me geeky-techy industry forum sites that I use regularly was closed down two days ago because of a mildly deflamatory comment and some choice language vaguely made in the direction of the MD of another North American firm. You do need to be a little careful, internet laws are becoming more draconian by the week. You can bet there is someone or other out there who would love to find an excuse to try an bring down a forum, they really are the ones with the hunour defecit problem. Crappy, I know, for the best I am sure. Boomer
  25. Hi, Why don't you organise a march on parliment? You need to get media coverage, maybe even a gimmicky media stunt or two. I am not suggesting you dress up as batman and robin and stand astride nelson but the VI spin is immense and just think about it, how many people do you meet in every day life who think it is now a damaging problem? Or that at some point, under the current game of HPI musical chairs, when the music stops playing, some people will be left holding a huge parcel of tripe. Alot, I would suggest. Inflation is damaging to economies and society at somepoint. It certainly always seems to lead to social unrest or political extremism when it goes unchecked. It is a massive problem now. The groundswell of support already exists, that is for sure, there just isn't a voice or access to the media. You need to get creative, poll the range of professions on this forum and others, sometimes really useful contributions can come from right under your nose. Like most things in life, I guess someone needs to get off their a3se and get the ball rolling. Remember also you are fighting a poltical battle. The immense HPI of the UK economy was a happy solution to NuLab's pension fiasco, it definitely helped with the reelection when BTL made up the losses people suffered on the pensions frauds. Boomer
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