Risk/Reward

Rate Cut Inflation or Bubble? Go Bubble Go Bubble

Question- Anyone have a clue what happened to the Indian Nations Immigration figures during the Depression. Any down turn surely must nullify the demand for more Migrant workers, if there ever was a demand.

Wondering weather to move money out of clearing banks and into Building Society. If Bank goes under as in 1930 America. Savers were wiped out as well.

Just what will finally tip this market the wrong way? Has it already slowed and this is where the experts jump off whilst telling the rest of the population to get in.

1990 Crash. Lenders said it wont be allowed to happen again no irresponsible lending. To be honest I dont think there was irresponsible lending last time. If there was it scaled nothing to what we have had this time. Back in the mid 1980's there was a massive boom in the economy after a long recession. Most had more money in there pocket that they had earned as a primary source of income. Houses just followed the same path. Who is old enough to remember MIRAS at 30% Two co habiting people using both there allowance to get as much tax relief as posssible. The encouragement of the government to get people to own there own property as a choice instead of Council house. The last scramble to get a house before the MIRAS route was cut off by Lawson in August 1989. I would not be surprised if Gordon is thinking of tinkering with the 2nd home tax law. Or 3rd 4th etc. He needs more money and everything has his paws on it eventually. Lightly taxed at the moment he will say. May be this will be the death bed of the Housing BTL driven market

A really awful picture of US. Is it all true? Even if only half as bad as made out then the fall out will hit our shores as well. As we are told we are in a global economy. A lot of money will be tied up in US from Europe Asia etc. Recession here we come if we are lucky. Depression if we are truly unlucky.

There are new developements all over. I was in Gants Hill last night (East London Essex border) an old cinema has been demolished and flats are going up. Across the main A12 the same is happening. The prices are off the scale. What to do! Buy one and rent it out. Buy one and live there. Or wait and see if this is one too many flats to be built. Start looking for teaser deals to invite you across the door. They must be coming soon. We will pay stamp duty. Thats normally the first entry point.

Last crash by and large only affected homeowners. BTL was not in the main stream. I doubt if lenders will be keen to throw people out of there properties if it is a home. If it is a loss making business then the rules are different. We are 9 months behind the US curve on housing. Fall out will start this year. Triggers will probably be something unexpected. NZ just raised rates to a new mouthwatering rate. Ouch. Are they headed our way too?

Merv has problems with the gap between exports and imports. Or is that just imports. I'm going off on a Tangent. IR to go up. Inflation is his only remit and just when he thought it was safe to go back into the water. Along come the Water bills. New improved Council tax bills at an affordable 4.2% Pent up demand will keep party going through summer, whilst the markets are always ahead of the game. Stocks first, then Houses. Keep your powder dry in the storm that follows.

Got shorts going all over the place. HBOS MAN PERSIMMON (THEY DESERVE IT) This where the real money is made. Spend years pushing that bolder up a hill. When it gets to the top see how far and fast it goes down the other side!

Have to agree with this sentiment. Gradually unwinding all my positions in the market. Might be a bit more in it but the best part is behind us. I will sit on the side lines now and watch with interest as to how the financiers keep the party going well past midnight.

The Magic R word was raised bt Greenspan over the weekend. All bets are off if we get a world Recession. House prices will go into meltdown this time round as Debt is unmanagable for most.

160,000 families. Know of you of such a number? Gordon picking numbers out of the sky as usual. What of the families that are about to lose their existing homes due to current mortgage deals running there course and unable to pay at the new improved rate! Crash Gordon, Saviour of the Universe.

You can discount that chart as that was pre Globalization. Always something different the next time around. Most people had one home and BTL was not even heard of main stream. Now the speculators are in the Housing Market more than ever. Can be treated such as Commodities, Stocks etc. Over bought and over sold. If you hear of any fund managers or Bankers selling there homes and renting then you know its all over. My next door neighbour sold his house in 1989. He was a Banker in the City. The top of the market. World events will have a large effect on house prices. They did back in 1989. They will again. Its always an unseen event that triggers a crash. Government will roll out that they cant control World economic events.

Prudence and stability. Dear old Gordon used to mention these old timers back in the late 1990's every other speech. When did you hear him lately mention them. He was the first one to start this splurge of spending what you dont earn and pay back time is here. Watch for the tumbleweeds across Estate Agent doors next year as we get the perfect storm. Higher Rates Higher Taxes Higher Unemployment Oh I cant wait for the decade of decimation to start.

With all the good news coming thick and fast we can all drink to the crash as it appears to have started.

Immigration is a blunt instrument to keep wage inflation down. Trouble is that we are being squeezed from both sides. High wage jobs and the skills have been outsourced to low cost countries. UK is turning into a low skill, low wage economy. I have worked in the Automotive industry for 25 years as a design component engineer. A level playing field up until 1995 then this new buzzword started circulating GLOBALIZATION. Spent the next 5 years cutting costs year on yearby 5%. Making components cheaper, faster lighter until there was no where else to go. Next step of process was wages. Basically we engineered our jobs out of the country. Could not reduce costs anymore without challenging safety issues. British plants closed and moved to low cost countries. I am earning less per hour now than I did in 1997. Was I over payed then? Who knows. Problem is that if you extrapolate that across the country in all areas of Manufacturing you will find that we have lost too much and will never get it back. Virtually everything that you can see smell or touch will be outsourced to a low cost country. Any job that cannot be relocated, cheap labour is coming in to do it for less. I have on a previous occasion been replaced by a Czech guy. Job was still on going but he was 3 times cheaper than me. Pleased to say that he cost the supplier more money than they saved. We make very little in this country. Everything is about cost and quality is forgotten. Immigration has tipped the Uk over the edge. You are now seeing the effects of low skilled workers on the Underground in London. Every project is delayed due to the quality of the workforce. Pay peanuts and you get monkeys. The impending correction in House prices is fast approaching due to wage constraints of low cost workers.

IR It appears to me that the Financial Institutions are not passing on the 0.25% to savers. They want to increase the spread between borrowers and savers. Savers outnumber borrowers and the thought of bad debts must have a few bean counters shaking in there boots. All those maxed out guys and gals are not going to be able to keep up. What a mess. Gordon Brown and the mantra of "No return to Boom and Bust" he blustered out in the late 90's will be his epitaph. The biggest financial earthquake to hit these shores in our lifetime is around the corner. Hang on in there if you are renting. I was around in the 1989 and priced out of the market. Three years later sellers were begging for a first time buyers to walk in. Got my House when rates were being lowered to stimulate the economy and property was going down as well. We are on the same collision course as the late 1980's. All the schemes now being banded around then are back in again. Disaster struck and the home page chart shows the effects. It makes me shudder to think this has been allowed to happen. The effects this time will be worse though. Prices went up in 1980's due to tax cuts and Council houses being sold off. Tory policies. Average Joe had one house. Did not have another property as a Pension. (Tell me how that one works) Now we have the Question of Sport round of "What happens next?" Meltdown.

Anything is possible. When the first hard evidence comes through that the party is over, the scramble for the exit door will be like no other. All the building blocks that were in place for this massive surge in Home values are coming apart at the seams. Interest rates going up Unemployment going up It takes a long time to push the bolder up to the top of the hill. It comes down faster the other side. All we have now is the suckers rally trying to get the last drop of diposable cash out of the misguided.

Keep your powder dry. Never jump in at the top of any market. We are at the top now as average joe has no disposable income left. More property will come onto the market as Interest rates rise. Buy to let people are investors and they will take profits at the top. Buy and hold stategy will lose out over the next few years. Housing is now fully geared up and is more likely to have shocks like other investment strategies. Housing is not just a place to live. Smart Money is not going into Bricks and Mortar.

Halifax covering all bases. Also now increasing the number of lots on there Auctions every month.