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House Price Crash Forum

sean taylor

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About sean taylor

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    HPC Poster
  1. This response assumes that design and manufacture of consumer electronics is easy and financial services is difficult. Actually I think it's the other way around.
  2. If the BOE wants to prevent the pound from devaluing against other currencies they may have to raise short term IR. For longer term debt the bond market may force higher rates regardless of the BOEs desires. It also depends on how much foreign capital the UK want to attract to fund the national debt (public and private). Since the UK currently relies on pretty high inflows of foreign capital to balance the books if this capital starts to demand higher rates (or threatens to go somewhere with higher rates) the BOE may have no choice but to raise short term rates, while the bond market drives
  3. Thomas Jefferson: "If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow up around them, will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered." Boom bust cycles are precisely engineered to move wealth from the middle class and poor to the rich. It has always been that way.
  4. I now live in the US. Some things are better, some worse. Health insurance costs me $400 a month while I'm employed, but rises to $800 a month if I lose my job (employer contribution stops). I pay about 30% of my salary in income tax (state + federal). Houses are cheaper. It's 5 degrees colder in the winter and 5 degrees © hotter in the summer. If house prices fell and yob culture was tackled the UK would again be a good place to live. Without these two issues being addressed I doubt I'll return.
  5. The real news here is rising overnight (read short term) rates. Traditional american mortgages were 15 or 30yr fixed rates, at rates determined by the 10yr and 30yr US treasuries. In the past 5 years there has been a rush to adjustable rate mortgages (ARM), since short term fed rates were ultra low. Often these mortgages adjust after the first 2-3 years, during which time they are fixed at a very low rate. Buyers used ultra low rates to take loans of half a million or more, banking on price appreciation, or the ability to refinance to another low-start mortgage when the current mortgage ad
  6. Excellent link. In my experience (as a Brit living in the US, and having lived in California and Massachusetts) the UK is much much worse than the US. In the US California is a housing disaster, and I expect a financial train wreck to occur when "low start"adjustable rate mortgages start to adjust in the next 2-3 years. Las Vegas, Phoenix, much of Florida, and the northeast (Washington, New York, Boston) are quite inflated, but even in Boston you can buy a 4 bed detached home within 30 minutes train ride of the city center, with good schools for under $350,000 .... a lot more affordable tha
  7. Can you explain how house inflation has been good for you ? Do you own multiple properties ? For people owning only their primary residence I fail to see any net benefit to house price rises.
  8. I'm sure we'll muddle through, and I'm sure the muddling will be rather unpleasant for those who are not prepared.
  9. "We know the Feds hawkish views on interest rates and that they're not scared to do anything they can to stop the rise in Inflation." I'm sorry, is there some other Fed you refer to ? This is the same Fed that gave us 1% Fed funds rate here, while cost of living inflation (education, healthcare, housing) was running about 10% a year ? This is the same Fed who's governor Bernanke gave a speech referring to dropping money from helicopters to prevent deflation ? The fed talks about fighting inflation, but I have yet to see any real action. At least the BOE didn't drop interest rates to 1% fo
  10. There have been many "new economic realities" in the past 200 years. Never have they survived, so pinning your hopes on yet another is sticking your neck out more than a little. Housing crashes take a long long time to unfold, but eventually this one will unfold, because the UK simply doesn't have the productive capacity to service its current debts.
  11. Expect more of it. The government figures on inflation, unemployment, GDP etc are completely fabricated here in the US and bear no relation to the life a middle class person. I sincerely hope the UK does not go the same way, but I expect it will.
  12. And look at what happened to real estate in Japan. Sometimes you can't give money away. 0% interest rates only help housing if lenders are still keen to lend. You can set short term rates at whatever you like and it won't make a jot of difference in a credit crunch.
  13. So let's get this straight. Commodity inflation caused by China and India, coupled with wage deflation (in the UK) caused by China and India is going to cause UK house prices to boom. Commodity inflation and wage deflation both serve to lower the purchasing power of the UK people. I think you deserve an award for the most contorted bull logic to date. The only thing that can keep house prices at their current levels is a massive devaluation of sterling coupled with wage inflation. This will bail out the debtors. However it would also destroy sterling bondholders, who are usually the rich
  14. Both are debt based / consumer / service economies. Both have miniscule GDP contribution from manufacturing. Both are running a current acount deficit. (US is much worse) Both have very low rates of private savings. (About equal) Both have a housing bubble. (UK is much worse) More similar than different I feel, so if we both go the same direction it will not be so surprising.
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