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About Richelieu

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  1. Indeed. But I see his point being more than you might have more bargaining power when before the bottom, when all the indicators are pointing toward an ever-decreasing price spiral, to convince a seller to sell before it's too late (and accept a far lower offer) than after the bottom, when all things look rosy and sellers might want to start wating for a better offer. I could see it occurring if the media was actually reporting peak and bottom correctly (so the seller could get information about it in the news...) I suspect that analysts and VI will claim bottom every single month of decline,
  2. I fail to understand the logic behind this. I was baffled when reading it on Bloomberg, and apparently I am not alone. Basically, every economic sector is at its nadir, and yet they are finding growth, so growth must continue? I understand that usually, recessions are driven by housing and car markets, because they can be volatile and overshadow the other sectors of the economy. Now that they have pretty much disappeared from the economy as a whole, according to this article, the logical conclusion should be that a possible next leg of recession won't come from them, but from other sectors tha
  3. Most of you seems angry or surprised by the new that the current generation is considering bankruptcy as a way out. I am not: for someone who has near zero chance of acccruing wealth, defaulting doesn't incur a too harsh penalty... And given the prospect of spending her life half the time unemployed, and being milked to pay pensions while she works, a massive amount of people face the prospect of not accruing wealth during their life. How could she realistically think she wouldn't be able to repay her debt? Of course, her plan which relied heavily on the Tooth Fairy to bring money home was ce
  4. is apologizing for butchering English on this board :(

  5. If, as he implies, providing shelter is a basic need that can't be left to private organization, how is the solution to nationalize the lending activity in order to boost shelter-providing private persons' balance sheet? He should advocate for nationalization of houses, not lenders...
  6. Apparently, their own data comes from an opinion survey. These are totally flawed as a way to assess real trends. People are asked if they would consider buying overseas, but they answer without thinking of the implication (moving to Australia isn't exactly the same thing as moving to the other side of the street...) Basically, it's a popularity contest between countries, and most respondants have never really considered moving, nor have studied the housing market. Speaking of exchange rates is ludicrous : they say one in four FTB (and in survey lingo, that means renter...) is considering leav
  7. In other news, US existing home sales fell to the lowest level ever (ok, that only means the 90's as they didn't track the number of sales before, but hey...). There is a 12 months inventory, plus a shadow inventory of (conservatively) half that size. You're an US buyer. Would you choose to buy a traditional house, or a special house with a contract stipulating that, to resell it, you must pay 1% of the amount to a company AND you must ensure in the sale contract that any further buyer will comply with that contract, thus limiting your reselling opportunity ?
  8. French follower of this site (as history showed that the London market often moves in advance of the Paris one (by two quarters), I finally decided to subscribe to post in transversal threads regarding house prices. The French market is even more frothier than the UK market relative to earnings, so I totally feel your pain!
  9. It could certainly have been avoided.... But the HPC is only a revert to the mean after the HPI. And during the housing boom of Ireland, I recall a smug Irish government criticizing other European government who wanted them to increase taxes (to moderate their economic growth prompted by very low rates) that they should manage their own countries better, and if they had to impose taxes, it's basically because they weren't competitive and should follow the Irish example. It could have been avoided, but nobody seemed to want that.... The only country that seems to care (and fails majorly to do
  10. If they bought a house to live in, they don't suffer, because they won't sell it and be happy not to have to pay a rent. If they bought a house to let, they don't suffer, because they won't sell it and be happy with the fixed income. If they bought a house with the intent of using home equity or speculate on the resale price, they were not saving for their retirement age but doing a speculative operation, with associated risks. Where is the problem exactly ?
  11. Yes, because in the event of a Communist revolution, everyone loses. My take is that they benefit a little, if circumstances are right, from the hyperinflation, but less than someone who was cash-rich before and managed to hedge his assets from the hyperinflation (foreign investment ? Even gold is not safe, because, as you mentionned, the popular movement could push for a seizing of real assets like gold... but who owns gold nowadays? I guess most retail gold owners, contrary to what happened in the Roosevelt era, only hold gold/commodity based ETF and not real commodities, which makes them ev
  12. I guess some people are, especially some who have borrowed heavily and hope to repay fully their mortgage with a gallon of oil. They imagine being the big winners of the HPI but the situation is much less rosy than they imagine. But they are certainly not a majority. I never accused you of that. My remark was for the "smirking homeowner with a huge mortgage" described in an earlier post. The OP asked about what would happen to the homeowner, not the public debt. And based on other example, said homeowner will face hard time (as everyone will, in fact).
  13. OK, I'll let it rest, then Just... My point : people wishing for hyperinflation don't understand how bad it is and how removed it is from their daily lives, because, in their daily lives, they only know low inflation or 70's inflation, not hyperinflation. They don't imagine deflation either, but that's not the point. I give examples of real hyperinflation (Weimar, Argentina, Brazil, Chile, Yugoslavia, Zimbabwe) to compare the current (or 70s') situation and show it's quite different, and how the economy could still work in the 70's in a way it can't in an hyperinflation situation, and y
  14. Yes, it could last longer, and even if it doesn't, there is a huge risk in how the mortgage are converted. Usual exits from hyperinflation involve using another currency, either a brand-new one or a foreign one. Given the size of the UK, it wouldn't be practical for it to adopt the euro or the dollar without the support of the Fed or the ECB (while Argentina could ride the dollar)... So basically, existing loans would be converted to a new currency, and the adjustment rate of mortgage would have to be changed also (because their would no longer be a GBP libor rate, for example....) So it's a h
  15. They were obeying some kind of government, not private local interests. The Red Army was certainly no saint, but they weren't thugs paid to enforce local interest. If you want another example of a relatively crime-free hyperinflation, let's take... (that's hard) Brazil ? OK, it's a military dictatorship, but private crime was contained, or Chile during the presidency of Salvador Allende. Which (again based on the few examples we can draw upon) leads either to : 1. the realizations by gangsters that they can extract rents without having the deed and not giving back the rent to the landlord
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