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House Price Crash Forum


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Everything posted by (Blizzard)

  1. I don't see why we would need new towns. At the moment, millions of people are herded across the sacred green belt from commuter towns to their workplace. Moving things closer together involves less travel and less disruption to the countryside, not more. Of course, new suburbs require new infrastructure so it isn't just about houses. It requires less infrastructure if it is closer together. Fewer larger hospitals, fewer roads, fewer stations, and so on. In any case, there is plenty of space for new towns and cities. Our existing towns were situated in places that were optimal hundreds or thousands of years ago, not now, so I hardly think that matters. Turning the number of new houses that need to be built into some number of new cities seems very much like a scare tactic to prevent any building that might threaten land values. The fact is there's plenty of unused space, it's just so much is off-limits to the population, they're now convinced that it doesn't exist at all.
  2. It's no surprise we have congestion when we have an artificially scarce supply of land. The only reason we squeeze ourselves onto a tiny fraction of the available land is to increase it's value. Initially to benefit the descendants of feudal landlords, later to protect the unearned wealth of older, middle-class voters in marginal seats. The only surprising thing is that people still fall for this. Concreting over the countryside - we haven't even concreted over London. Congestion is scarcity, and reducing scarcity means building more not less.
  3. Crashes, like avalanches, don't have obvious causes. Once the instability has built up, some random fluctuation grows exponentially, and things quickly spiral out of control. Of course, when (or even if), this might happen is anyone's guess. Still, if you smell gas, you don't care where the spark might come from, you just leave the building.
  4. Yes. Clearly, we should never have built one house. That's where it all went wrong. http://www.logicalfallacies.info/presumption/slippery-slope/
  5. Most people think the choices they make are down to their own free will, and at some level they are. What they don't see, if they don't think about the world around them, are the economic forces that influence those choices. The best example of this is fashion. If you ask people why they wear what they wear, they'll tell you they like it or it's comfortable, or something like that. They won't talk about being persuaded or influenced. And yet, amazingly, they all dress the same. This is particularly true in a society where individualism is the dominant ideology, and even more so if you're trying to rationalise apparent failure. Of course a generation will become 'lazy' if you take away the rewards for working, but they won't necessarily realise what has happened.
  6. No, because the EU is just a scapegoat for mass immigration, which is the policy of all 3 major political parties in the UK. There'd be quotas and points systems based around 'good immigration' and 'bad immigration', loads of inter-company transfers and work-arounds, and ultimately it'd make no difference at all. Anyway foreign demand for housing is a result of capital movements not movements of people. EDIT: I don't think UKIP would do any different either. The people who matter need cheap exploitable labour.
  7. The difference between the employed and the self-employed is an entirely ideological one. It's easy to see that this is the case, by looking at the number of people doing the exact same job, for more or less the same income, where some choose to be employed and some choose to be self-employed. What we should care about is only the number of people unable to support themselves without government help. Since the government is trying to attach a meaning to this entirely arbitrary distinction, it looks very much like an attempt to game the statistics. Actually, I don't think it is. As I said, it is ideological, and I think they believe their own ********.
  8. The Unemployment an economic damage caused, in the short term, by a crash, is regrettable. This was always a foreseeable and inevitable consequence of the bubble, and the blame lies entirely with the land hoarders and their tame politicians, not those of is who warned against it. However, a homeowner losing their home is no more of a tragedy than the renters who get evicted on a whim every single day, or the millions prevented from ever owning a home by callous and greedy landlords. Every single landlord who buys to let has prevented at least one person from having a home, and most likely an entire family.
  9. I thought it was more a sort-of support group for people who's main income is money-off vouchers and tesco clubcard points?
  10. There's really nothing special about self employment. It is entirely an artefact of the tax and legal system. In many cases, self-employment is literally just employment with a worse contract. I've seen plenty of people switch to contracting after being made redundant. Even 'real' self-employment - actually running a business that employs people - has nothing to do with innovation, or the process of wealth or job creation. That comes as much, if not more, from universities and the employees of large corporations as it does from the founders of new businesses. As for entrepreneur, that just means übermensch. It's not really an economic term, it's a religious term. They are the chosen people. So basically, it's a sermon from the archbishop of capitalists celebrating the religious conversion of pagans, which hasn't actually happened but at least they do all the right rituals now, so that's close enough.
  11. Putin got rid of rival oligarchs. To give him his due, this was an improvement on the gang wars of the 90s.
  12. So actually $225k/year, or £130k/year. Like a headteacher or GP then. It's less than David Cameron gets paid for creating more of the inequality he'll be studying, and far less than Mark Carney gets paid for helping him. Less than a third of what Mark Carney gets. About half of Mark Carney's additional housing allowance, (because he can't be expected to pay the ridiculous cost of rent in London, that he is responsible for). I don't agree with Krugman's ideas, but this is insidious ********. If you want to criticise the rich and powerful, better not be rich or powerful. Only poor and weak people can criticise the rich and powerful otherwise, well, they're just being hypocrites aren't they? £130k pounds per year . Fred Goodwin still gets paid twice that, now. ******ing Bruce Forsythe gets three times that. Incidentally, I think a lot of the reason I don't agree with Krugman is that his ideas are absolutely wrong in the context of the British feudal economy. Whether it would make more sense in the US, I don't know or care. Not sure why people (including him) insist on comparing the two, they aren't the same at all.
  13. Plus the expansion of right-to-buy, which has proved to be a total disaster.
  14. For land allocation to be efficient, you must pay more for better land, that's pretty obvious. The reason our system isn't remotely efficient is not because of the amount you pay, it is because of who you pay. It is equally obvious that in a free-market - a market in which all agreements are voluntary - a user of land must pay-off other, rival, users, in order for them to agree with his claim. That is, the user must pay the provider. In this way, the market incentives work to ensure that the people sitting on the most valuable land are making the most productive use of it, and people who do not make productive use of the land are incentivised to move. The simplest, least radical, way to do this is for the government to charge land users and to distribute the money either as citizens income, reduced taxes or increased spending. Alternatively, we could have land contracts brokered by private-sector middle-men who guarantee exclusive use of land in return for a fee. That fee is paid to subscribers who sign a contract, voluntarily, agreeing to respect the rights of the land users. Since this has never been tried, I'm sceptical that it could actually work. However, if you can't accept this as a practical solution, then you don't really believe in the power of markets to allocate resources.
  15. This is why rents are exactly the same in London as they are in inner City Glasgow or Liverpool.
  16. Putin has managed to become the most powerful of all the Russian gangsters. All Obama ever did was to win a bullshitting competition. Cameron couldn't even do that.
  17. 1000 years of brainwashing. It's only 100 years or so since rule by landlords was explicit, and the dominant ideology was dedicated to justifying this. When the threat of revolution finally brought limited democracy, the propaganda effort had to be stepped up in order to ensure that the mass of the population would vote in the landowners interests. The 'property owning democracy' was born. When people had no power to do anything about it, no-one doubted the role of landlords and their place in society. They may just attached religious justifications to it. Now people have the power to change things, it's easier to keep them ignorant. They may attach a market justification to it, but mostly it just isn't talked about.
  18. Most renters aren't betting at all, they just can't afford a house. Furthermore, most buyers don't make a profit if prices rise, they're just (partially) hedged against the rising cost of their personal accommodation. They aren't hedged against the rising costs of their children's accommodation, nor the indirect land costs that form part of just about every price you pay for anything (e.g. parking, to pick an obvious example).
  19. Yes, it is defensible, and so is much official government spending. My point was not that this is bad, only that these two things are almost indistinguishable. Governments include it or exclude it from their accounts to fit their ideological narratives.
  20. Exactly. All discussions of government spending ignore the way the law benefits some at the expense of others. For example, mandatory car insurance. Whilst it might be a good thing, as benefits might be, it is also undoubtedly an example of the government forcing people to pay money to other people. Since it doesn't pass through government accounts, it doesn't count as tax and spend. Nevertheless, that's what it is. Proper accounting for these rents would show the real dominance of government, compared to the relative unimportance of market forces, and who really benefits from that.
  21. Landlording isn't a business, the economics isn't the same at all. In business prices, are set by competition - supply and demand. The money extorted by landowners is set by the Laffer curve.
  22. Some appallingly bad journalism there. Suffice it to say - no. Whilst I could explain, I think this, written by a sociologist, does the job a lot better: The Formula That Killed Wall Street'? The Gaussian Copula and the Material Cultures of Modelling if you're prepared to read it. It doesn't absolve models of all blame, because that wouldn't be true, but it does explain the limited role they actually played in what really happened. Note, if you're skim reading, that many of the interviews were conducted prior to the credit crunch and that the expression 'Black-Swan' appears no times. Some quotes for the short of time (but really, you should read it):
  23. So let's look at this quote: VaR does not try to estimate rare events. Losses in excess of var are supposed to happen around 3 times a year. All statistics is subjective, so he's not really saying anything we don't already know there, he's just playing to a naive audience who don't know that. Here's a genuinely knowledgeable, interesting (to me anyway!) discussion of this from persi diaconis. And what in the ****** do hedgers have to do with anything? He's just adding words to sound clever. And the real problems with var, are not mentioned at all.
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