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House Price Crash Forum


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Everything posted by dgul

  1. From the wiki page: Looks like the Dragons were right. [in fact, I'd go so far as to say that some senior TfL people saw the programme, noticed that he didn't own the opportunity, and old the team to try again for a higher price] Anyway, I don't know how he can claim to be first to spot the opportunity - when I lived in London years ago everyone knew there was an opportunity. The difference is because he is an ex banker it gives him the understanding of how to access funding. Doesn't give him the nouse to understand that you've go to secure an opportunity where you don't actually own anything special (or even the knowledge of how to develop underground).
  2. Stupid thing is you could stop this sort of thing instantly. There could be loads of approaches - eg, set capital gains tax to taper from 80% to 30% over 5 years (say) - that would stop the “With rising prices I will be able to sell it for £260,000 in a few months" ones. I doubt the letting out out option makes so much sense with the removal of mortgage interest deduction. The fact that they don't set up these kind of dampeners suggests that they don't want to suppress the bubble.
  3. The ONS projection is little more than "what happens if the trends of the past continue into the future'. My prediction is that by 2025 there will be a massive change in the UK economy, started by a run on the pound (provoked by that obvious-in-hindsight but all too invisible to us now event) and thus more lucrative lifestyles being affordable overseas. There will be massive demigration to the old soviet states and back into the now safe and growing middle eastern states and back into Africa. The economic problems will even result in emigration of whatever we call multigenerational British these days, back to an old 'auf wiedersehen pet' type economy. This will cause even more problems for the economy, as the only people who will be definitely hanging around will be the boomers who will be determined to take advantage of their free healthcare (and bus passes), even if it is falling apart because of lack of younger people to do all the work. Estimated population in 2025 - a drop of 10% over 2015, plus a little more because many of the people demigrating will be the ones who have been building up families in the UK over the last few years - so about 55 million. Of course, all this is made up nonsense - but it is just as valid as the pretty much linear regression (tarted up with some post-hoc rationalisation) provided by the ONS.
  4. Same story in the FT entitled "this is nuts. When's the crash?" http://ftalphaville.ft.com/2015/10/29/2143422/this-is-nuts-whens-the-crash-29/ [to be fair it is part of a series with similar titles, but still, London housing gets into the nuts list]
  5. I suppose everyone is guessing - his guesses are as valid as any other. My guess is that when push comes to shove they'll do anything to maintain the value of assets (which is pretty much means house prices) - I don't think they have the option of gradual deflation any more - I'd go so far to say that they'd be more likely to let the currency crash than asset prices. But I really don't know anything... Maybe Carney is poised to increase interest rates and destroy the pensions of all those BLTers. Who knows.
  6. The thing is... if you don't like an advert, think it is stupid, etc, then it is just not aimed at you. You can swear at the tv, proclaim to never purchase xyz again, think that the people who buy xyz must be stupid to support all that advertising in an increased store price - but it doesn't make any difference... for their target market the ads probably do work, and probably do result in increased sales compared with not advertising*. It is sad but true, and you can't get away from it ever. [the ad men probably gave up on you lot years ago - but remember that when you were 20 you probably were influenced by marketing, whether overt, or subtle product promotion in magazines, etc. The fact that you don't like advertising now isn't a reflection of ads getting worse; it is more a reflection of getting wiser (and probably a bit older...)] *although that said, my uncle, who had quite a bit of success in advertising (you'll have seen some of his ads on TV in the 1990s) used to laugh and say it was all a con - that the greatest achievement of the marketing industry was convincing people that it actually made any difference...
  7. When the numbers reach that size they stop being rational. The number is so big that the programme itself actually changes the economy and makes it work in a different direction - the money isn't spent so much as apportioned and the rest of the economy rotates around it Trident may or may not be a good/bad thing - but the ethics of it aren't really that connected with the spend. It is a bit like a yodaism 'there is no spend, there only is'
  8. Well I suppose he is right in a kind of twisted way - things would have been worse 30 years ago if 20% of the workforce had been made redundant - but by killing the industry they can now close down entire plant with only the loss of a few thousand jobs. But of course, if you are one of the few thousand affected then the comments are offensive and he is insensitive to be even thinking of saying them at this time.
  9. Also, it makes you wonder how many of their 'elite' graduates have managed to become 'elite' through similar means.
  10. If anyone is interested there is a radio 4 production about a woman who went to live there for 3 months. http://www.bbc.co.uk/programmes/b06j144b. I think she tries quite hard to portray it beyond the child-abuse image that have overtaken Pitcairn, but the bit where she says 'I've been the focus of male attention - last night someone climbed into my bedroom while I was asleep' suggests that they've still got quite a bit of the road to travel down. Don't think Pitcairn is for me...
  11. I think that is my point - they've got vast amounts to money to throw at problems until they eventually succeed. Any other company bringing a product to market in their way wouldn't succeed. That doesn't impress me that much. I'm no particular fan of apple products - well, I was impressed in 1984, but they're too sparkly for me these days. MS are good at languages, and that part of the company goes back to the start, so has been no failure - MS basic on the Apple II etc was quite good, and their language division has kept up since. But even there, there are problems with their monopoly - Java could have killed the Microsoft model, so MS developed a two stage strategy - they created their own JVM which installed as default and which was almost but not quite compatible with Sun JVM - result people complained that Java didn't work very well (which it absolutely didn't on the MS JVM). Next they created their own version of OO-done-properly C++ (C#) - and tied up the market. There is no evidence that MS was going to innovate into C# before Java came along to force them. The SQL example is the other way MS innovates - they just bought SQL Server from Sybase.
  12. Ah - OK. I'm not a gamer, just talk to them. So that makes no products successful at first try. This is about AS, but I'll go on about MS as I'm bored. They make great products that I'm really happy to used, but if you look into the history of every product they make (now including xbox, thanks) they have several failures before they find success. Most companies couldn't cope with their failure rate at bringing new products to market. I'd be happy for you to point of the exceptions as I can't think of any and I'd be happy enough to be wrong.
  13. Oh they've had lots of successful products, only each one is formed out of a couple of unsuccessful products which would have sunk any other company but which the windows/office near monopoly* (which itself was unsuccessful initially and was bankrolled out of the msdos near monopoly) could bankroll to keep things going. The one exception was xbox, which was a success from the start. Other than that, look at the failures before the successes. * If there is one thing that BG is good at, it is understanding the value of the dominance of windows and particularly office in the marketplace - ie, if it wasn't completely dominant then people would be able to use an alternative. And note that it isn't actually the product (which is admittedly quite good), but the file format which gives them their strength - if anyone could read/write docx/xlsx easily then then many more people would use the alternatives.
  14. Funny product - the emailer could have taken over the oldie email market 20 years ago - but the crazy pricing scheme (essentially premium rate numbers for the modem connection to download the emails) killed it dead (apparently it could cost £100 per month to use the thing). Apparently the pricing scheme was AS, so he shows a distinct lack of market understanding there...
  15. To be fair he said to Gates that there was no money to be made [by him] in software, which is probably accurate. re. the ipad - it is clear that AS doesn't understand computers since the dos days. I'm no particular fan of AS, but my definition of entrepreneur is someone who can succeed with several diverse business ideas, preferably with a bit of failure thrown in to show resilience - and AS has this in spades. Jobs absolutely had it (Apple, Pixar, Next, back to Apple, etc). Gates doesn't quite (well, MS basic was good, MSDOS was a knockoff which has essentially bankrolled the rest of the company for the last 30 years (happy to be flamed!)). Someone like O'Leary doesn't as although his company has been successful (Ryanair), he's only done it once and that might have been a fluke.
  16. how about asset prices in emerging markets collapse allowing a subset of developed country investors (let's call them the '0.01%') to buy said assets at firesale prices.
  17. You might even be able to buy them second hand from the North-eastern USA / Canada - the models suggest they wouldn't need them so much. Perhaps even do a swap with some - oh wait, I can't think of anything that they'd want from us...
  18. I think that in order to understand whether it would work you'd have to understand how it would even out. If you have a workforce of 10,000, with an average salary of £30k apart from the top 10 who earn an average of £1m, then bringing their salary down to £300k (ie, 10x average) allows for an increase in salary for the other 9,990 of less than £1k. The high earner has considerably less money to spend (on Ferrari, houses, prostitutes, whatever), but the average earner doesn't actually get much more money in the deal. Is the problem that the high earners have so much money that they are competing out lower earners for asset purchases, or is it that the lower/middle earners just aren't earning enough? I kind of understand the premise of the argument, but I don't actually think that is the problem or that it would resolve anything (not that it isn't a problem and leads to issues across society - just that it isn't the problem). I would say that the main problem in society today is that the finance industry is way too big for the economy and it is leading to all sorts of of issues. I'm much less concerned about the pay of Alan Sugar or Stuart Rose (say), than I am about the average salaries of the prop desks in London - the CEOs of large multinationals do need a skill set and while I'd agree they're often paid too much they do bring something to the table. That thousands are paid well into the 7 figures in the City of London without actually doing anything productive* is madness and we'll all suffer eventually (more than now). *years ago there were people in banks etc who negotiated/underwrote deals and who had to understand the companies in order to support investment activities. That was a productive activity. Those days are gone, and too much of the activity in the City is mere betting.
  19. Exactly - and if they remove tax relief in favour of an isa based system (ie, pay tax on the way in, tax free on the way out) in 30 years time they can start taxing isas and change the system back to tax relief on way in, taxed on way out. Wins all round*. But I would point out that this is yet another policy in favour of 'boomers' - the losers here are those currently building up their pensions - the ones that have retired or are due to retire in the next few years will be unaffected, and will continue to hurt the pension funds (ie, the funds will continue to bleed up to the point where they collapse or they collapse the system - at which point the level of tax relief will be a mere technicality) *apart from the workers, but they don't count.
  20. I'd guess you have to thank him for giving you advance warning of a change that is coming in to place in a limited extent in 18 months time. I'd have thought that would give you plenty of time to sort out alternative accommodation. Or is he really increasing it today - in which case he's profiteering rather than passing on a cost. In that case you should tell him that the changes start in 18 months time and that you'd be happy to let market forces decide the rent at that point. And you must thank him on behalf of his then tenants for reducing the rents so drastically in 2007-8-9 when interest rates dropped - or does he only change the rents when interest rates go up? It might also be sensible to point out to him that you aren't interested in his financial arrangements - you might as well regard the house/flat as being owned outright, in which case the change in taxation rules will have no impact at all. And, presumably, these people who own outright are competing against him for tenants, and they won't need to increase rents when the taxes come into force. Probably best not to tell him how the changes will also give him a higher income wrt all benefits/pension/other taxes. Or perhaps wait until you leave.
  21. I've got a better idea. Why not give the CGT paid by the blter to the purchaser if they are a ftb- still not equitable (as the btler gets the majority of the unearned gain), but a slightly less mad idea than that proposed. If the btlers are holding back supply encourage them to sell - a special holding tax would do the trick. No need for carrots where the donkey is already full of carrots - the stick is what is needed... [i've seen it said that CGT is a problem tax because it discourages the eventual sale of the property - in that case just introduce a asset gains tax where for housing people pay the tax annually based on an index gain. Even allow them to offset capital gains taxes elsewhere against any losses on the index. That would stop these sorts of machinations]
  22. FWIW, I think there will be a bit of a deflationary spurt in gold before the next move up. Not sure of time-scales at the moment. But I'm usually wrong so don't base any investment strategies on my count.
  23. Presumably there is no point in reminding UK readers that if they purchase 1kg Au in the form of 32 1oz britannias then there is no CGT payable on sale (presuming any profit is made), whereas if you sell a single kg bar then you have to notify HMRC and pay CGT (well, you might choose not to, but the rules say you have to). [not that I'd recommend gold at this point - but best to be aware of the options]
  24. Sorry - North Dakota is a relatively unimportant state, but gets lots of revenue from oil which would reduce if the rest-of-world economy collapsed.
  25. Just so long as they don't rely on that income stream in future years...
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