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Kinky John

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Everything posted by Kinky John

  1. I'm not sure it's that black and white. The unstable system that would inevitably follow on from repeatedly bailing out mis-allocated capital is surely worse than the 1/2 a generation or so of depression that follows on from allowing the whole corrupt mess to go down. We risk a strangling oligarchy of entrenched power bases that stiffle all innovation and creativity and suppress the living standards of everybody (i.e. what we have now). And there's still lots of untried ideas to lessen the experience that wouldn't involve using government money to retrench the corrupt eilte power base that caused the mess in the first place e.g. creating a government backed bankruptcy of major banks (which would let business run down), lowering barriers to entry in banking, shifting of the tax burden onto bubble wealth (e.g. land tax) to create space for productive endevour, significant deregulation of markets, genuine infrastructure projects (as opposed to the disorganised money fligging that's going on now), removing everybody responsible from positions of power and replacing them with people who clearly weren't deluded. In the long run we'd be better off without the huge corrupt self feeding owners of capital. Even if that means we must endure a decade of pain our kids would seriously thank us for it (well, they would if they understood the alternative).
  2. The bubble booms have altered my perspective so dramatically I won't buy and hold any asset until it is clearly extremely cheap on a future revenue basis (stock and housing are a joke). Given that housing is an awfully illiquid depreciating investment and I don't need stability because I don't have kids I intend to basically have nothing to do with it unless there is absolute carnage (i.e. 50-60% drops). I can easily afford to buy a one bed flat outright in central London (i.e. I am in the top 0.1% of all earners). Don't see why I should throw the money away though and with everything terribly inflated and mispriced liquidity is a premium I will pay for with a lower standard of living.
  3. Honestly; some people just expect it all on a plate. You should feel lucky all those savy property owners who've been in the game longer than you allow you to live in a 3 bedroom NW3 rabbit hutch in exchange for only 1/2 your lifetime earnings.
  4. Vive la revolution - I'm with you! though not quite so sure I need to pin it on just Gordon brown. Any half wit that things "housing is returning to normal, " at anything but 50% off peak deserves the same treatment. It's only normal as defined by the last decade as opposed to the entire rest of history.
  5. It's interesting because unlike inflation it is so immediately apparent what the effect actually is. A policy of encouraging people to keep their nose in the rat race and be a good little consumer speculator because there is insuficient stability in the value of what they own to plan for the future. I have a radical alternative idea; accept the end to growth and allow the economy to find it's own balance point. For the economy to behave this way it must be strongly out of balance - the life support must be removed so the dead bits can die and make way for productive industry. I mean, their credit boom was almost as nuts as our's - what do they bloody expect!
  6. Bearfacts vs Bullshit I'm sure there's a good reason the language has evolved this way!
  7. Well, the S&P has a forward P/E of 17 based on optimistic estimates of earnings, and the FTSE isn't much different. I guess that's only justifiable as long as quantitative easing continues and the yield is being compared to a 0.5% yield from cash at the short end. Downturn's never sustain P/Es like that so either prices must go down a lot or earnings must surprise to the upside. However, we do appear to have a generation of "savvy, " investors that are capable of deluding themselves that everything should be different this time. My prediction is that either QE stops and interest rates go up so the whole lot collapses back to something realistic again or we have massive inflation.
  8. Thank you; every time I get slightly disheartened that well compiled list always makes me feel better. It's not different this time!
  9. I got rid of all my friends that owned houses because they were too smug and I didn't want them getting in the way of me enjoying the inevitable and highly predictable collapse. Now get away from my baked bean stash!
  10. It's a great idea, but unfortunately I can't help but feel that 4 non-executive directorship's and a few PM question time's bribe's (sorry campaign contribution's) later and they'll all be sitting pretty in gravy land again. The salary and the expense's aren't the half of it! Q: Where do you think Blair get's paid his million's from! A: The people we just all payed to bail out.
  11. There are two approaches to understanding why people didn't see this coming. The first of these is to put it down to cognitive bias and the tendancy of people to commit error's of judgement such as framing with small amounts of information, confirmation bias where people interpret information to suit their judgement or agenda and anchoring on a previous occurence and over infering patterns. This is fairly well understood (go look up http://en.wikipedia.org/wiki/Cognitive_bias). The second approach to explaining the woeful ignorance of people is to put it down to the majority of people being moron's who couldn't be arsed to engage the simple process of rational thought preferring instead to indulge themselves in short term bias because it has a greater and more immediate emotional payload. Personally ... I think everybody is a moron.
  12. I'm sure I'll get flamed for dissing anybody that ramps gold but I don't rate him much at all. Makes a few good points, but the writing has that gushing vested interest feel you find in property reporting. There's little reference to what could go wrong. For example, the valid premise of the article that China is well known for saying one thing, doing another kind of misses the point that this greatly increases their unpredictability. After all, it's the whole east/west imbalance that was the root cause of the recent breakdown so why would they want to rush back into it. What is their real agenda? why wouldn't they be capable of difficult political choices? what about the relationship between corruption and their reserves? In general don't like market oracle - uses too much pseudo science and cloud pattern analysis. Suitably bearish, but still too much bullcrap.
  13. Based on experience of spending a lot of time around markets this looks like a product of local differences that can't be integrated into the whole because of the total lack of liquidity or speculators. As a speculator my immediate trading plan on what I see would be to sell the ones that haven't dropped and buy the ones that have to realise a profit because I believe the entire market should be affected by the same global phenomena of collapsing credit supply. Of course, I can't sell a house I don't own (unlike shares), and the capital expenditure/volatility is so high I'd be mad to have any position in housing unless I could take a very small position. If you want risk do something relatively sensible like borrowing all the money you can and slapping it on the margin of a country sized forex bet. At least then you've got a chance. Only drawback is that the government won't bail you out when you screw it up.
  14. How can you think such a thing. Our exalted leaders have the will and capacity to stop QE and raise interest rates on the first signs of inflation. Even if it means doing so just before a general election. We are all so lucky it is different this time.
  15. Actually; I'm not sure you need to be quite so fatalistic. I get the feeling that the rot is starting to come out and when the dust settles the appropriate level of retribution will be handed out to those who are outright fraudulent (probably not that many), incompetent (many) and there will be a lasting shift in corporate governance back to where it was and where it should have been all along. I suspect there has been some clever political play going on deliberately keeping everybody focused on the injustice they feel, so that they ignore the genuine culpability (the government, regulators and corporate governance). All in, there is nothing complicated or new in this crash - it is exactly like all the numerous mania's in history with the same pattern of reinforcing self delusion, hubris and fear. Just go read about some of the previous examples in "Popular Delusions and the madness of crowds." IMHO, this is nothing new or different
  16. Brilliant Why does everybody think up caption's where it's the policeman busting Jacqui rather than heil Jacqui who is doin the ball breakin. This is the Woman that wants to log everything everybody does ever in case it might have something to do with "terrorism," (i.e. not approving of labours policies). I know which of those two I'm more scared of!
  17. I think you'll find a large number of bankster's would have been scientist's if society didn't regard scientist's as subhuman scum who shouldn't even be able to afford a house. It's all about the money and the distortion it crates
  18. We've ascertained from his phone call's that this one is gay ma'am ... what way up do you want the star?
  19. Well put; worth is defined by affordability, and who can afford 600k with a reasonable sized loan/deposit? You want to see a ponzi scheme - forget Madeoff; he's an amateur; check out UK housing instead.
  20. 10bn should be enough to really underpin mortgage lending; but only on houses which are priced reasonably. Since there aren't any reasonably priced houses I wouldn't worry about it having any effect at all.
  21. Is that 60% off an inflated fictious bubble price, or a genuine 60% off the price of recent sales. Wish they'd get out of the mindset that the house in question was ever worth 60% more - just a debt financed illusion
  22. Just buy a general long only commodity fund like the AIG index or rogers index which allocate across a broad range of commodities (there are ETFs of them). It's not a bad bet since prices can recover from their current lows either through monetary inflation or a genuine economic recovery (I know which I think is more likely). Also, given the huge amounts of money that's been flowing out of these funds it's likely prices will significantly under-shoot as well. Of course, nothing to stop the stagnation settling into real deflation and them just being a great big money sink - but trading is about an edge, not about winning all the time.
  23. lol ... well - the latest halliwide stats and mortgage approvals are really starting to show the benefit of that tidal wave of investor interest. Hmmm; let's see. Against a backdrop of massive capital falls I can take a huge leveraged investment in a house with an 8% yield, and risk a liquidity squeeze and future yield decreases that force bankruptcy, or I can stick my money in an indian bank, get a lower yield but get it back when it goes bust. Let me see - which would I choose.
  24. and I can't believe that some people would dream of talking the market down. It should be a criminal offence to spread truthful fact's about the economy - just imagine what would have happened if everybody had realised there was a mind-bogglingly huge bubble in every asset about 5 years ago. All that prosperity and housing value that was created would have been ruined!
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