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House Price Crash Forum


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Posts posted by Lander

  1. It's going from bad to worse

    "President Obama to utilize American and Canadian NATO troops to put down what is expected to be a “rebellion” after the expected January, 2010 ‘declaration of bankruptcy’ by the State of California."

    "Reports from the United States are, indeed, confirming the mass movement of military supplies and thousands of Canadian Special Forces Troops to California from the Canadian Forces Base of Petawawa to join their American military counterparts, with ‘secondary’ reports stating that at least 1,000 tanks are massing their too."


  2. Not true, we are constrained by price more so than capacity or geology.

    With oil sustained at $300 (in todays money) lots of coal/gas to oil would be built.

    Lots of coal mines would spring up, the UK would become a huge coal miner once again. Unconventional coal/gas/oil would boom.

    Nuclear would expand very quickly.

    Wind would expand very quickly.

    Old plants would be shut for new ones (ie close or adapt a 30% efficient coal plant to a modern 47% efficient one which cuts use LOTS). Likewise with gas stations and nuclear stations.

    The last time we had oil over $100 it gave us shale gas and tar sands and coal gasification. If we had oil at $300 the worlds energy landscape would change. However oil will never be $300 in todays money.

    $300 oil will not put any more coal in the ground, coal production is projected to peak around 2030 and much sooner if we ramp up coal to liquids. It's also a highly energy intensive process.

    You're ignoring peak uranium which is projected to occur around 2035, sooner if nukes are ramped up significantly

    Please explain why we'll never see $300

  3. Care to mention what part of the world falls at oil at $300 (ie about 10p/kWh)?

    Plus what is to stop us making 100 more of the 300,000 barrel per day gas to liquid plant?

    or a hundred coal to liquid plants?

    Edit: just to add, oil will not get to $300 in todays money ever.

    If oil got to that price, it would drag gas with it as people covert cars to gas or buy new gas cars. Likewise a lot more gas to liquids plants would open up.

    The increase in gas prices would see more gas production.

    At the same time there would be less gas for power stations so more coal will be consumed which pushes the price up which means more coal produced.

    If coal prices increase by a penny and a half it would also make wind economical viable without subsidy so you would see a rapid boom in wind. At those prices nuclear would be extremely profitably so you would see a boom in nuclear too.

    As I keep saying all energy is linked.

    Have you been living in a cave? The global economy started to fall apart when oil reached only $150

    Increasing gas prices are not going to put anymore gas in the ground or make wind power any less intermittent than it already is, if we replaced oil for gas and ramped up nukes, we'd see peak uranium and gas within 20 years

  4. Got this nugget from the usually raggish Scotsman.

    Bank to hold of rate rises

    Chat about views on rate rises. Interesting note about Goldman Sachs.

    "Goldman Sachs has one of the most aggressive views, expecting rates to rise to 1.5 per cent by mid-2010 and hit 2.5 per cent by the end of the year and 3.5 per cent by the end of June 2011.

    Goldman's prediction is all the more surprising given it expects US interest rates to remain at near-zero through to end of 2011.

    In a recent note, Goldman said: "The recovery is likely to be led by investment and net exports, facilitated by better global growth and the weakness in sterling. "We expect household and government consumption to remain weak."

    Are they just guessing like everyone else ? Or do they know what is going to happen like they usually do.

    I was reading another article recently about mortgages being taken out in the UK recently. Something like 80% were variables. This was a complete turnaround to a few years ago when most were fixed rate. I also remember a few years ago most people thinking a variable was the worst thing you could get - as they piled into fixed rate. How wrong they were (In the short term anyway)

    This contrarian indicator tells me the following:

    In 2 years time everyone will be wishing they had a fixed rate rather than a variable. How could this happen ? The only real way is for variables to become more expensive in comparison to fixed rate. Most probably down to interest rates rising faster than expected. If GS also have this feeling then those on variables (The masses) should be getting rather twitchy right now.



  5. This is true for at least the next few years.

    However, consider the following. A tractor costs break down into the following factors. Firstly, there is the energy used to mine the raw materials. The energy used to process them into raw production materials prior to fabrication. Then the energy required fabricating them. Then the energy required assembling them. Then the energy required distributing them. Then the energy required maintaining them. Then the energy required keeping them going in fuel.

    Then there is the energy required to extract nitrogenous fertilisers from natural gas under immense heat and pressure using oil energy......

    ….you get the picture

    All of that energetic expenditure manifests itself as monetary expenditure throughout the lifetime of the tractor. Eventually there will come a point where the total energy expenditure (which, remember, ultimately manifests itself as monetary expenditure since all money is ultimately nothing more than the final abstract representation of the all of the resources that are used and worked by man) exceeds the total energy expenditure of doing the work with men and horses.

    We are a long way off that point yet, hopefully. But that point will come. The trouble is, though, it won't provide a solution for our populations at large since far less food will be producible that way. It will, though, be a solution for the farmer.

    $300 oil is closer than most people think

  6. Gas/coal/oil are all replaceable and interchangeable.

    Both gas and coal are expected to increase lots over the next 20 years as is oil if Iran/Iraq get their act together and the west invests technology there.

    On top of that there will be a lot more nuclear in the world in 20 years. China alone will be adding 150GW.

    Plus there are inventions which will lower demand. For example when gas fired stations were first invented they were 25% efficient, today they are 60% efficient which means they use half of what they did in the 60s. likewise coal/nuclear was 30% while new supercritical plants are nearly 50% efficient.

    On top of all of this we just use a lot because the world has so much. We keep our heating on at +18 all the time. +14 would be fine with a jumper and reduce demand greatly. The worlds cars are very in efferent vs the best we have. We could probably free up 20 million barrels a day if we used cars that got 50mpg on average instead of 25mpg.

    As always the people who will have energy shortages are those on the margin, those very poor people. So unless you expect the UK to be third world in which case energy is the least of our worries then there will be no problem.

    When the oil price spikes to $300 the global economy will seize to function--this is a liquid fuels crisis At this point, electricity demand will have fallen off a cliff so sufficient generating capacity becomes a non issue. Trucks, planes, trains, farm machinery, mining and earth moving equipment are powered and built by oil derivatives. These machines are the backbone of our economy. I don't see any running on coal or electric. In addition if we increased fuel efficiency of our transport by 50%, people would just drive more--Jevons paradox

  7. Did demand ever go away ? What were ftb's with their deposit funds going to do with all that cash they'd spent years saving. Cost of

    borrowing seems to have changed little since the doldrums at the start of the year. So increased confidence that IR's will stay low, a

    realisation that there's no flood of properties coming onto the market 8-9 months on, equals a doubling of approvals since this time

    last year. Buyers blinked first, and now i've seen properties that weren't shifting in Mar now finally going SSTC.

    the supply issue relates to low debt servicing costs forcing far fewer forced sales, and this annoying trend of homeowners choosing

    to stay put and overpay on their mortgages. Those that wait it out, can get close to what they'd like to get.

    A house is only worth what a person is prepared to pay for it. Sellers are are soon going to HAVE to get real and readjust their prices inline with the new economic conditions if they want to sell.

  8. Can our economy and the Global economy continue to grow as we enter our energy decline? UK north sea oil has been declining since Peak in 1999 nd is falling at 10% a year.

    We are a net oil importer now. WE waste natural Gas for around 36% of our electricity supply. WE are now bringing in LNG from the middle East. We borrow energy from France during peak periods. Our energy infrastructure is old and crumbling. 10 years before any nukes come on line and UK peak coal was over 100 years ago.

    In the next few years we could see oil shortages as new discoveries all but small cannot keep up with decline rates in oil producing regions. Is climate change really about mitigating our energy decline? All the info points to a global energy decline whilst at the same time population is increasing.

    As i look out over the Hereford countryside, i know it is only a couple of months until farmers start to pour natural Gas in the form of ferts over there fields, this means one thing to me - the era of cheap food is gone, many think we can import our food, in the above senario i find this difficult to Believe.

    Can the current system survive? I doubt it. Is there enough cheap abundant easy to get energy which will allow us to pay off our liabilities? I dont think so.

    Is this the real reason the ponzi collapsed - resource depletion?

    What is it that Colin Campbell says? CE=CE-- contracting energy supplies = contracting economy. Simple but true. Shame the politicians can't grasp this

  9. Christmas is a time of year when we all hit the shops and online stores with our gold cards at the ready, we want to spend spend spend until theres no tomorrow. We want to wrap up our products and forget about the pain until January when the bills hit the mat.

    Only this year, were not.

    Were buying small more affordable presents in cash and waiting until the sales start on boxing day for thoses big purchases. No credit to spend, no pain wanted until January, just prudent consumersim and price concious shopping.

    The use of credit this Christmas has crashed. Were becoming more like our European neirbours and not going mad at Christmas.

    As other european countries climb out recession, we have slumped and it seems were not in any particular rush to get back on the credit gravy train. Will this issue in a found respect for living within ones means or is it a case of doing what you have too.

    Either way the retail sector is having a hard time of it, but for once consumers are have a white, bright Christmas.

    I dislike that term, it implies that our only purpose is to buy sh!t we don't need

  10. You are correct to a degree. Most people can do a lot more than they think and have been programmed by managers and society to be sheep. Workers either get punished for thinking for themselves or more often they get ignored so often that they stop bothering and just take orders.

    Having said that some people are good at some things but not so good at others but most things most people can do reasonably well.

    Most of the guys I know are not even capable of replacing a ball joint on a car and they're mostly pretty smart

  11. Steve, I suspect what we will in fact see is house prices stable, occasional rises and occasional falls for the next 3-4years, but we will get some hefty inflation coming our way in 12-18 months in terms of other items and wages.

    Although HPCer don't generally like to talk about the housing market stabilising or rising, they are quite a lot who will talk of a currency collapse for Sterling and to me this amounts to very much the same thing.

    The most likely scenario is now that prices have already hit their nominal bottom in February this year, however, with the recent bounce ending and things stabilising, and up and down over the next few years, it is the impending inflation that will do the damage to house prices.

    Do remember that the graph on the front page is not nominal house prices, but real inflation adjusted ones. In every past crash the pattern has been crash in nominal terms, followed by watch as inflation kicks off due to the Government dropping interest rates. I don't think crash will be any different, in about 4 years times, a lot of HPCers may be saying look how cheap this £200k 2 bed semi is, as they attempt to buy it using their average £80k salary.

    People need jobs to buy houses

  12. Wish I could find my own post from way back saying basically the same thing. Just shows the difference in attitudes between the Yanks and us. I live in the NE of the US and notice this even more. They really don't care about house prices being a source of future wealth. Nobody talks about it and renting is really seen as being pretty smart right now. A renter is a thing of beauty somebody said to me the other day. When I told him that in the UK they are looked down on as being somehow second class and a failure, he said "The Brits will wise up, they always do".

    Hmm I'm not so sure, while ever people like Kirsty Allslop are brainwashing the public that houses are 'investments' I don't think they will <_<

  13. The only way the economy is going to recover is for house prices and rentals to come down which will free up cash and create more disposable income. Same applies in other countries that have had rampant HPI.

    "People's increasing willingness to abandon their own piece of America illustrates a paradoxical change wrought by the housing bust: Even as it tarnishes the near-sacred image of home ownership, it might be clearing the way for an economic recovery.

    Thanks to a rare confluence of factors -- mortgages that far exceed home values and bargain-basement rents -- a growing number of families are concluding that the new American dream home is a rental.

    Some are leaving behind their homes and mortgages right away, while others are simply halting payments until the bank kicks them out. That's freeing up cash to use in other ways.

    Ms. Richey's family of five used some of the money to buy season tickets to Disneyland, and plans to take a Carnival cruise to Mexico in March. Mr. Fernandez takes his girlfriend out to dinner more frequently. "We're saving lots of money," Ms. Richey says."

    Bold highlighted by me


  14. That video was pants! He gave a couple of trivial "it happens every day" facts and built an apocalyptic scenario from that. He keeps telling us "you should see what I see" - ffs, he's got a camera to record this stuff.

    BTW, he's a hyperinflationist gold bug.

    And that's exactly what he's doing, good job too because the msm never reports on this kind of stuff

    Newly developed former middle class suburbs are now ghost towns. Looks somewhat apocalyptic to me

  15. "I don't think you can cut taxes enough to stimulate demand," Whitney said. "For a 2010 prediction, which is so disturbing on so many levels to have so many Americans be kicked out of the financial system and the consequences both political and economic of that, it's a real issue. You can't get around it. This has never happened before in this country."

    It's the same in most Western economies. It's not like previous recessions, but everyone (especially those snapping up many stocks with huge exposure to faltering consumer demand) seems to think we'll all bounce back to 2007 in a few months.

    Highly unlikely when the engine of the global economy has just thrown a rod.

  16. Some more cheerful reading on much the same subject:

    GEAB 39

    Looks like it's going to be deflation of crap we don't need and inflation of things we do. A bit of basket juggling and 'inflation' will stay below 1% even when your food bill has doubled.

    Yeah I've thought that for a while now that we'll get some sort of weird hyper biflation. Prices of houses and cars going through the floor while energy and food goes the other way

  17. Effectively the whole of Australia has doubled down and gone long the Chinese economy's demand for resources. This Chinese economy is massively geared not just for a rapid return to normal for Western consumption, but in fact a huge increment on 2007's peak levels. They've built it. Now they're waiting for the american consumer to come. Internal consumption is simply nowhere near enough to keep the party going.

    Hey, it might be a fine strategy. If things just go up, up, up then Australia as a whole will be a heavily geared winner. But by going long China the Australian economy has gone long Europe and America... the very same people that they look down on as economic incompetents. And all the while they pile on more debt... Doubling down on every win in the casino.

    Can all this continue? I have no idea, but there are clearly some storm clouds... And the more debt Australia is in, the more vulnerable it is. Of course, How many people realise that's the bet they've made?


    The American consumer is DEAD


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