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House Price Crash Forum

sighmoon

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About sighmoon

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  1. So the NSandI borrow from the bank of england, all the time, without there being queues outside? How cheeky. My question though is how does the rest of the market work? Joe Public gets his mortgage from a bank at x%. The bank gets the money, to lend to Joe Public, from other banks - presumbaly from overseas banks too, where people save more. Joe's bank can borrow at Y% (X% minus a bit for risk / profit margin). The other banks get their money from deposits, on which they've promised to pay Z% (Y% minus a bit more for profit margin). Now neither X, Y or Z% have any connection to the B of E base rate. Presumably there's a free market operating and the rates offered are determined by the competition? So, if the Bank of England say that interest rates are now 1%, why would anyone care? The B of E are not doing any of the lending in the economy so how does their decision affect the flow of money? The banks lending money are still borrowing it from elsewhere, so they can still only lend it at X%.
  2. So today the bank of England are going to announce the base rate decision. But who uses that rate? I always thought that banks borrowed money from the Bank of England, at the base rate, to lend to their customers. But recent events have shown I was wrong. If banks could borrow from the Bank of England at the base rate, then Northern Rock would not be in trouble. Apparently banks borrow from each other (or not, at the moment), not from the Bank of England. So who does borrow at the base rate, and if nobody does, why is the bank's decision relevant?
  3. The pundits on the home page of this website are generally predicting price rises for Scotland. However, Allsops, (the auctioneers, not the Kirsties) issue a report, available on their home page (http://www.allsop.co.uk/), where they graph the number of distressed sales at auction in different regions. Unfortunately, they lump Scotland with the North of England, but the graph shows the number of reposessions rising more rapidly in North England and Scotland than anywhere else. So either: 1) Scotland is fine, and is helping to mask a really dire situation in Northern England. 2) The Scottish 'offers over' system gets the vendor more money than the English haggling system, so the mainstream prices are still going up, even as the number of distressed sales rises. This is likely to delay a Scottish crash, but perhaps make it worse when it does happen. Any thoughts?
  4. I wish I'd seen this thread earlier. I just posted the same question in the 'investment' forum. It's kind of confirmed my opinion that Gold is mostly a speculative punt rather than an investment. It's interesting that the goldbugs are mostly talking about an armageddon, mad max type scenario. In Mad Max it was petrol, in waterworld it was resin. There's not a movie yet where gold is what everyone's after. It's just not an imaginable situation. Yes, but to cash in, he would then need to sell $15 billion worth of gold, which would send the price back down pretty sharpish.
  5. Maybe not. When people say that money markets are pricing in interest rates being 6% by year end, does that mean the players (i.e. banks as much as anyone else) have short positions etc. and they're not just sat there waiting for something to happen? Pension funds though - don't pension fuinds have to have a certain allocation in bonds?
  6. I invested in the Aberdeen Global India Opportunities Fund, at about the bottom of the wobble, nearly a year ago, and so far I'm nearly 40% up. However, had I bought before the wobble, my gains would be half that. In the long run, I have a lot of faith in the Indian economy, but it's sure to be a bumpy ride.
  7. I have succeeded, but it was a good 4 years ago. I was turned down for a mobile phone contract so I asked to see my credit file with Experian. I even paid for the privelege. All it said is that I had lived with a particular person. The 'report' had no score, just that one bit of information. My credit report didn't mention this, but my prior flat mate struggled a bit with his money, and had no job in the many years I was there. So my association with him seems to have been all that was needed.
  8. There's a theme on this, and other bearish websites that gold is the thing to buy when the markets head south. I have to say, I just don't get it. The thought of putting our savings into gold coins and a good quality chest appeals to the pirate in me, but I need to understand it too. My thoughts are as follows: We are, doubtless, in the middle of an asset price bubble. Everything is up (equities, oil, and property, but also gold) because investment money from cheap credit, the carry trade, and hard working Chinamen has chased it upwards. If interest rates go up, and/or there's the mother of all crashes, presumably there would be less money sloshing around to buy gold, and so the price of gold would decline just as fast as everything else. I would imagine that there are almost as many leveraged positions in Gold, that would come unwound on the way down, as there are in equities. Surely, when the roller coaster passes the peak, everything goes down. What makes gold different? As a hedge against inflation, I do understand how it's better than holding cash, but I would have thought no better than equities or for that matter, housing. Anyone like to explain to an honest simpleton what I'm missing? Thank you.
  9. Congratulations, lewissheridan. We had ours a year ago. I agree , it's great. There's never a right time to have kids, but things will work out. Nobody starves to death through poverty in the UK. Is it me, or are there a lot of bitter people on this forum? Your choices are yours. We grew up in rented accommodation and I can't see how it's been to our detriment. We never quite got what we wanted for christmas or birthdays, but again, I don't think that's all that damaging. My parents will not leave me a huge fortune when they pass on, but what do I care? the way the population is aging I'll be 70 odd, and partially senial by then anyway.
  10. Always good to get on with the girlfriend's parents...
  11. For better or worse (richer or poorer), we bought our place a couple of years ago. Like most people here, I think prices are due a correction, and our most valuable asset is no doubt set to depreciate as fast as anywhere else. However, it's a nice place, and we don't really want to move just yet. So my question is: is there any way of hedging house prices? If I had 5 times my annual income in shares, I'd probably take a short position if I thought it was going to head south and I could'nt sell. What's the house prices equivalent?
  12. Yes, that's what I meant. WHat was Bernanke's Booboo? Was it the dropping money from helicopters speach?
  13. For one thing, on futures, you know that most trades will lose money, but it's leveraged, so when you 'win' the gains are large enough to cover your losses. The rest of your post is... errr... worthy of the cabinet - go ask Tony for a job. If you make up the numbers, you can obviously get them to say anything you like. Why not make it even more dramatic - probably only 1% of equities investors make money, whereas 200% of home buyers make money...
  14. Yes, one would think that sterling would be falling dramatically against the dollar. However, since the dollar interest rate was bumped above sterling's, the reality is that the pound has fallen massively against the dollar, from around 0.57 to around 0.54 - which represents a loss of about 5%. Why is this happening, anyone?
  15. EAs don't call it Dalston, they call it 'lower islington'
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