Jump to content
House Price Crash Forum


New Members
  • Posts

  • Joined

  • Last visited

About doog

  • Rank
  1. = = = = = = = = = TODAY'S DEMOCRACY NOW!: * Subprime Lending Crisis: Millions of Families Face Losing Their Homes to Foreclosure * Subprime loans have led to one million American families losing their homes in the past decade, a new study by the Center for Responsible Lending has found. In the last ten years, the subprime loan industry has emerged as a major, and controversial, player in the housing market. We speak with an attorney at the Center for Responsible Lending. Listen/Watch/Read http://www.democracynow.org/article.pl?sid=07/04/04/1343214
  2. Your conversion is purely personal. I am more interested in facts. What is the structural change that you are talking about? Please elaborate
  3. http://leninology.blogspot.com/ The US housing bubble has popped. Sales of existing homes fell to their lowest levels in two years in July, while sales of new homes dived 22% on the previous year. The average house price was barely changed compared to July 2005. But as many commentators in the US press have pointed out, this doesn’t account for all the incentives that sellers are now having to offer potential buyers, such as free pools and coverage of buying costs. It’s little wonder that US consumer confidence is now at its lowest level since hurricanes Katrina and Rita battered the south coasts in autumn last year. New York university economics professor Nouriel Roubini goes as far as to say that: “Every possible indicator of the housing sector that has been coming out in the last few weeks…suggests that the housing market is in free fall.” He reckons that “this may end up being the biggest housing bust in the last 75 years” - in other words, since the Great Depression. ... US consumers have been relying on the housing market to fund their debt-fuelled spending. A housing bust of these proportions would be “enough to trigger a US recession…expect the great recession of 2007 to be much nastier, deeper and more protracted than the 2001 recession,” says Roubini. And unfortunately, a US recession would be very bad news for the rest of us. As Morgan Stanley’s global economist Stephen Roach so eloquently puts it: “There’s no consumer in the world like the American consumer.” In 2005, US consumers spent nearly $9 trillion. That’s 20% more than Europeans, three times more than the Japanese, nine times more than the 1.3 billion Chinese and a whacking great 17 times as much as India’s population. The trouble is, they’ve spent plenty but their earnings haven’t been keeping up. In fact, US consumers have been spending more than they earn for quite some time. For 2005, the savings ratio (the percentage of annual income that consumers are putting away for a rainy day) actually went negative for only the first time since - you guessed it - the Great Depression. It isn't actually true that the bulk of mortage equity is supporting direct consumption: most of it goes to refinance existing debt and sustain small businesses. But of course, those things in themselves support consumption indirectly, so a collapse in the housing market - which after all bailed out the US economy during the 2000-2 recession - will have dire consequences. US marxist economist Doug Henwood has been on this issue for over a year now, so he's the guy to check with. Also, his book about Wall Street is available free online (PDF). Another economist who has a remarkable history of accurate predictions is Wynne Godley - he too has been popping the debt-fuelled bubble. Meanwhile, Britain's housing market bubble continues apace, apparently "supported by historically low interest rates, low rates of housebuilding, steady income growth, and positive demographics". It is true that there is very little investment in house building, and one factor that isn't mentioned on the linked page is the increasing privatisation of housing in the UK, which has the effect of driving up prices and rents. The base rate is historically low at 4.75% but has risen this year, and will continue to rise. Besides, interest rates are only useful for as long as people can continue to afford to borrow money. Wage growth is, however, not conducive to this. According to an HSBC economist who spoke to Reuters, "unemployment is rising and real income growth is being squeezed". The British economy has been sustained - never quite booming, but usually growing - by a number of factors, not least the unprecedented consumer borrowing, which helped households to sustain spending. Government expenditure is also a key factor in growth, particularly in IT which it fancies will allow future savings (this might be true if they didn't have a track record of giving massive IT contracts to rip-off merchants like EDS). To keep the economy afloat when the consumption bubble bursts, however, the government would have to borrow on a massive scale and spend like there's no tomorrow on infrastructure and public sector employment. As it is, you're more likely to hear employers' demands for reduced pension contributions, lower corporation taxes, the reduction of the minimum wage and of course reduced interest rates so they can borrow like crazy. Basically, folks, the capitalist class won't pay you enough to buy enough, so they rely on you borrowing as much as you can to keep production going and stave off the recession. When the recession does come, they'll make sure you foot the bill. The only time they will ever tolerate a government trying to do something in your interests in a time of recession is if they're threatened with revolution. I trust you all have your pitchforks ready to hand.
  4. [/b]49th best HE institution in the world (and that is before we even factor the incredible sums that US unis rake in from their allumni and hence their skewed market power). Doesnt exactly make bristol a 2nd tier uni (imo). and yes, I did go to Bristol.
  5. Bristol 2nd Tier? Isnt Bristol one of the UK's top unis: regularly in the top 5 along with LSE and Kings. More students apply to Bristol than any other uni in the UK (and unfortunately it takes more privately educated kids than any other uni). 2nd tier..? Hardly!
  6. I agree. All statistics point out the fact that the UK runs a very healthy surplus in terms of tax revenue in relation to immigration. (see http://www.cre.gov.uk/downloads/ippr_payingtheirway.pdf for example) The immigrants of today are paying directly for British pensioners etc. Most of the immigrants tend to be highly educated and well motivated and if the have any sense will not spend their later years in this country, unlike the increasingly dumb natives that this island seems to produce moaning endlessly about 'immigrants'.
  7. So the suggestion is that we do away with the health service, free education, unemployment benefit and return to living in forests? I'll just get my club...
  8. In relation to the use of the word claim then that seems to me to be fair enough. I can 'claim' I am a little green man from the planet thong but without proof that is all it is. I merely asked the poster to provide proof for their claim and I did not say that the claim was either (in)/correct.
  9. Hi delboypass....can you please show me where you got that 3000 pounds claim from. The source that is. Also, what is the relevance of this thread / post to house prices (this specific post, not immigration in general?). thanks, i would be very keen to see the source for your claim.
  10. But isnt this the general problem both in this observation and on this board in general. People on this board are emotionally tied in to a HPC, but the cycles of capitalist economies dont work to spec and often take years etc to work through. All the fundementals about why a HPC or some similar economic disaster are correct IMO e.g. UK PLC being subject to global economic trends rooted outside of 'national' response structures (what social scientists call globalisation); unheard of levels of consumer debt; silly house prices; rising unemployment; oil prices; increased rivalry between trade blocs etc etc...the problem is that these things often take time to work through. The onus really is on bulls to argue what it is about the present that has somehow transformed the fundemental nature of the way capitalist economies work. I havent yet seen any evidence of this on the board at all...This of course doesnt make it easier for those waiting for the crash / stagnation etc, but IMO people need to take long term view. There is no point in getting animated too much about today or yesterday's news.
  11. how many people would have noticed this 'fake' expert if it hadnt been pointed out by the beeb...that's the scary thing, the barely articulate talking heads on most news programmes nowadays. I thought he carried it off quite well...it was funny.
  12. http://business.guardian.co.uk/story/0,,1774740,00.html ------------ Even China cannot feed a permanent bull Soaring optimism, glossing over bad news - it could be time for the bubble to burst Larry Elliott, economics editor Monday May 15, 2006 The Guardian Gold is through $700 an ounce for the first time in a quarter of a century. Platinum prices have gone through the roof. Copper is now so expensive that the metal in a two-pence coin, as my Guardian colleague Richard Adams noted last week, is now worth 3p. Oil is trading between $70 and $75 a barrel; stock markets in New York and London are at their highest levels in six years. The MSCI - an index of 49 stock markets in 49 developed and developing countries - hit an all-time peak. Article continues [Advertisement] So beware: all of this has bubble written all over it. It is a time of extreme danger for the unwary, with all the sadly familiar tell-tale signs of trouble ahead. There is the sense of supreme optimism that this time the permanent bull market is for real. There is always a reason why it's different this time, and this time that reason is China. Secondly, there is the tendency to put the best gloss on what, on the face of it, looks like poor news. As such, the US is not really running a trade deficit of 7% of GDP because there is "dark matter" that is boosting investment income but not being captured in the data. Similarly, when US house sale figures were announced last month, all the attention was on the number of homes sold being "better than expected" at an annualised 1,213,000. Only a few analysts raised an eyebrow at the fact that developers had to cut prices by $15,000 a house to drum up business. Though that was good news for the 100,000 families that snapped up a bargain, it was less welcome to the 100 million owner-occupiers in the US who saw the value of their assets tumble. Particularly, when tens of millions of them have been re-mortgaging their properties, adding to their debt levels, to maintain consumption patterns. But as Nick Parsons of Commerzbank, one analyst who did argue that the US housing market may not be in quite such good shape as the consensus thinks it is, noted: "When you see the post-data headlines, remember always that no major US bank/builder/mortgage lender/ federal agency or Fed official has any interest whatsoever in putting anything other than the most favourable gloss on the numbers." Imbalances The final sign that the bubble is about to burst is that even those who have been issuing dire warnings about the horrors to come capitulate to the idea that a "soft landing" is the most likely outcome. In that respect, the change of view by Stephen Roach, Wall Street's most influential bear for the past five years, was significant. Roach has not had a complete change of heart: his analysis is more nuanced. He still believes that the imbalances in the global economy are serious but is now more confident that a new spirit of international cooperation, seen at last month's meetings of the International Monetary Fund, can prevent a hard landing. We have yet to see what happens now the fund has powers to conduct multilateral surveillance of the global economy and make recommendations for key countries. Yet even if demand is rebalanced so Americans save more and consume less while the Chinese and the Europeans spend more, it is not obvious this can be achieved without considerable difficulty. That's not to say the US economy is about to face a prolonged, let alone terminal, crisis. The evidence is that the world's biggest economy recovers from setbacks quickly. Nor that China's growth is over. It is far more likely that any crisis there will be akin to the short, savage downturns that affected the US when it was growing fast in the 19th century, and rapid growth will then resume. But optimism about the long term should not disguise the fact that the short-term outlook appears challenging. It's hard to convincingly argue that the imbalances will be resolved in an orderly manner, even with the unprecedented level of international cooperation. Clearly, any reduction in the US trade deficit will require a fall in the dollar and a concomitant rise in the Chinese yuan. Yet, as Professor Wynne Godley of Cambridge University and others have shown, the scale of the dollar depreciation required to bring the US trade deficit to manageable proportions (say 2% to 3% of GDP) by boosting exports would have to be massive. The US Federal Reserve's hawkish comments when it raised interest rates to 5% last week suggest that it is already concerned about the impact a cheaper greenback is having on the cost of imports when inflation is already above 3%. The Chinese, for their part, are not keen on seeing the value of the yuan rise much; hence the increasingly hostile language on Capitol Hill. In truth, the US trade deficit is merely a reflection of the real problem: debt-sodden American households. There are several ways this can be illustrated. One is to look at the personal savings rate, which in 2005 was negative for an entire year for the first time since the Great Depression. Another is to look at the balance sheet of the household sector. The latest figures suggest it is in deficit to the tune of more than 6% of GDP. Capital gains Predictably, there are those who say things are not as bad as they look, and that if you add in capital gains from rising house prices and the stock market the savings of US households are in far better shape than the raw data suggests. This is dangerous nonsense. As Brian Reading said in a Lombard Street note last week, asset prices in themselves do nothing to increase a country's national income; only production does that. Homeowners become better off but if national output is unchanged, people who don't own houses are worse off. The net effect is zero. It's worth wondering what the new spurious excuse will be now that house prices have ceased to rise. Households have been re-mortgaging at higher rates, wages are not rising very fast, and disposable incomes are being squeezed by higher inflation and the sharp rise in energy costs. With the Fed seeking to underpin the dollar, all the ingredients are in place for a savage retrenchment among US households. This precarious state of affairs has been disguised by the strength of the US corporate sector, which has been running a healthy surplus and expanding strongly. But the optimism in boardrooms would be quickly dented if consumers stopped spending. The risk is that robust expansion in the first half of 2006 will prove to be a mirage: the next 18 months will see bust follow boom. If the US consumes at a slower rate, China will produce at a slower rate. That means commodity prices are likely to come down, oil is more likely to be $50 a barrel in a year's time than $100 a barrel, the dollar is a sell and bonds are a buy. And for anybody thinking of melting down a tonne of copper coins: don't. It's illegal; and by the time you find enough small change, it will be too late.
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.