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House Price Crash Forum


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  1. Nikkei off by 4% and looking for a bottom, yen plunging to 88.5 before partially recovering. TOKYO (Dow Jones)--The Bank of Japan said Friday it is supplying Y2.00 trillion against pooled collateral at all of its offices through an operation for same-day settlement in an agreement expiring May 10 Seems like this is gathering pace. Many bearish crisis' going on around the world tonight. 1). Prospect of Greek default 2). Unprecedented US market volatility 3). Euro currency cohesion under serious doubt 4). Credit market rally slowly unravelling 5). Equities falling for third straight day 5). Prospect of Portugese bail out 6). Prospect of Irish bail out 7). Prospect of Spanish bail out 8). Prospect UK failure to elect a workable government / need for second ballot 9). Ongoing volcanic activity hindering European travel 10). US financial reform pending 11). Gulf of Mexico drilling postponed 12). Goldman fraud case 13). Gulf of Mexico tourism damage 14). Gulf of Mexico ecological damage It doesn't look good.
  2. The Ocean Guardian is en route to the Falkland Islands and is the big strategic story of 2010. Merry xmas everyone, and have a happy new year. .
  3. Whilst the one in the foreground is full. The three on the left are empty. The others? I cannot tell, although the one on the right looks high to me. I would suggest that there are roughly the normal amount of tankers storing oil offshore for whatever reason but they are accompanied by idle tankers, idled by the drop in production. Although I believe oil prices will now begin to trend higher as an investment pause will drive supplies down 3-5 years from now. I think we are again heading for massive economic turmoil this time in 2012-2013 as souring western demographics, softening petroleum supplies, spiraling public liabilities and increasing labour competition from the east all summate to suffocate western consumers.
  4. Certainly some of those on C4 were empty. You can tell from the height of the water line. The deck of a laden tanker is not far above the sea. Empty tankers are often anchored of the coast as port fees are charged daily. This anecdote is evidence that trade volumes in the oil market are down 2-3% rather than speculators profiteering. There are too many tankers.
  5. I would say the stimulus has helped to stabise the situation. You cant deny that. I would also say technically speaking the recession is over. The problem is there are quite a few skewed markets and hidden dislocations such as scrappage schemes. Germanys opposition to ultra loose monetary policy is also likely to cause FX fluctuations which may hamper the recover of global trade. This hurts the acceptance of the euro and prolongs the dollar hedgemony. The biggest stories are all behind us now. The next stage concerns politics rather than economics, what regulatory framework will be errected in the rubble of lessez faire? Will another asset bubble form during a period of negative real interest rates? Or has the risk spectrum shifted enough to exclude such obvious speculation whilst there exists the political will to introduce permanent measures to counter asset bubbles? Will such measures be introduced anyway? The next phase is far more difficult to forecast as it involves politcal decsion making rather than marketeering.
  6. The numbers of buyers or sellers doesn't matter. It's weighted by money. e.g. 1 rich buyer can push prices up in the face of 100 small sellers. All that matters is the price at which both a buyer and a seller agree.
  7. Intersting but nonesense none the less. It ignores every other conduit of money flowing out of a lender. On day 1, your friend lends you £10 and you both agree he will charge you interest at 10% per day. You do nothing for 5 days. You owe £16.11 On th 5th day. You give your friend £10. You then agree to mow his lawn in exchange for £6.11 Later that day you give your friend £6.11 You are both even again and there is no oustanding debt. Mary Croft's example is a pale reflection of reality.
  8. No personal debt was transferred to the state. £600 million net of the total outstanding was repaid or eliminated as you put it. People are paying down their liabilities. This is deflationary. This coincides with the BRC reporting slight price falls. It's a turning point in the real economy.
  9. How much of the uptick is down to seasonal variance? Far more people live in the Northern Hemisphere than the Southern Hemisphere.
  10. We are at an inflection point following a 15 year credit expansion and total UK personal debt fell for the first time in July. After the pace of credit expansion has fallen consistently and continually from over 10% per annum in 2007, the supply of money circulating through the real economony has begun to shrink.
  11. Actually there is much less coming straight out of the economy in tax at the moment. Hence the deficit. The £1.649bn MORE will come in subsequent years.
  12. Very strange I know. It's because in the UK we have the Bank of England. The Bank of England has the power to change interest rates. Which essentially determine the cost of servicing debt. During most of 2008 interest rates were 5%. During most of 2009 they were 0.5%. This makes the debt cheaper to service. It's actually very simple.
  13. Tax revenue? That leaves a £170bn deficit. Which will cost... £1.649bn if funded with 2 year notes at tonights yield. I expect revenues will rise and spending will be cut in the 10/11 budget.
  14. Interest payable on debt makes up about 5% of the US budget. The figure here in UK was about 5.45% for 08/09 see below. Oh no! Our civilisation will collapse under the weight of the debt, as excise duty may need to rise by a couple of percent. There is no hope. It's inevitable!
  15. It's the cost of servicing the debt that's important. What is the yield on US Treasuries? What is the interest payable on the debt? $38,000 outstanding x .092% on 2 year Treasuries (for example) is an annual liability of $350 per capita. Hardly crushing.
  16. "since 2000 the amount of debt you have had forced upon you has doubled" Just as it has for every previous decade. The thing about y=x^2 is that it looks exactly the same whether 0<x<10 or 0<x<10,000,000,000. And so this whole article is spin.
  17. Looks to me like the summons was sent to Jim in error. Then some tin hat website has falsely presented the documents amid their spin. The letters from Wirral council are entirely consistent with the summons being sent out in error. Only two things in life are certain...
  18. I think many professions offer good money to people willing to work hard and stay mobile. Legal profession - earnings go from 20k to 200k pending experience Finance - 40k to 150k pending comitment and talent IT - 35k to 80k pending ability Engineering - 20k to 70k pending skill and knowledge Medicine - 40k to 165k Engineering isn't a lost cause though, a good subsea engineer can demand well over £1,000 a day.
  19. We'll still get deflation as the public sector still needs to unwind it's overleveraged position. This will be happening in a more risk averse post crunch climate as post war boomers take their money off the table to buy annuities. Tax hikes will squeeze margins and discourage narrow profit margin ventures whilst thinning welfare provisions discouraging discretionary spending. Activity will continue to slide. Alchemy is still alchemy, when system wide risk rises all the smoke and mirrors in the world can't equate that to greater value.
  20. I rarely visit HPC these days as I have a certain 'my work here is done' satisfaction. However post May 2007, we are on new ground. Following the demise of AAA securities, the benchmark of global collateral. Risk has been reappraised in a way never thought possible. QE whilst providing the liquidity to avert a cycle of every larger market dislocations, actually adds to long term financial risk by clouding monetary policy with another dimension of elasticity. The physical facts remain. Demographic shifts are making western populations less productive. Asian industrialization goes beyond taking up the slack and is actually inflating the cost of commodities. The result? Western land values must fall. Asian land values must rise. Land values corollate with economic activity, and unfortunately our aging population and outstanding debt will prove too large a burden to compete with the dynamism and scale of East Asia. Markets will rise and fall for months and years to come, but the capitalization of the West must ultimately trend lower as we quietly slip past peak production. .
  21. Central banks target a positive inflationary rate. It is of course an openly aknowledged design feature of fiat money that prices slowly rise over time. Problems arise however when the risk spectrum is revealed to be inaccurate.
  22. Spending our way back to a budgetary surplus? If this deficit is not contracting dramatically 18 months into a tory government, the UK will be down rated, sterling will take a tumble, and the debt burden will get even heavier. Get ready for the biggest tax and cut you have ever seen.
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