Pappabear
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Reading the US Housing blogs it is almost universerly accepted that the US meltdown is due to the Sub-Prime debacle, and the ridiculous ease by which otherwise unqualified buyers are able to purchase houses that they really can t afford. The reset in ARM payments which sparked the collapse is only the beginning, there are more waves of ARM resets to come, also opinion is that this problem will spread to the "prime" sectors" IE Owners who have refinanced and used their houses as ATM machines to subsidise their incomes (sound familiar here?), owners who have MEWED to invest and flip properties,(BTL?), may well find themselves underwater when they find they cant refinance again, as the value of the property has fallen. Also, what is the exposure of the UK banks (ie HSBC) to the US sub-prime market.? What happens if the US consumer stops spending, now faced with the likelyhood of making higher mortgage payments on a depreciating asset, having to cut back ? Do people really think that the UK is so special, that we can ignore the effects of what is shaping to be a spectacular crash in the US?
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He's obviously not that worried about the record debt levels in his own country, perhaps when we all become third world debt slaves he come riding to our rescue
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Whatever Happened To Our Freedom?
Pappabear replied to munimula's topic in House prices and the economy
Spot on !! Bankers dont like savers or the financially prudent, they make no money from them Debt is money, they dont need "savers", all they have to do is create money out of nothing,the more debt there is the more the bankers make, simple, and in the process they own you lock stock and barrel This crazy HPI has seen the financially prudent out bid by people willing to take on obscene amounts debt, so what does that tell society? "Dont save, dont be financially prudent, take on as much debt as you can, have it all now" And the bankers are always thinking of new ways to part the fools from their money, example the BTL craze- what happened to the idea of paying off your mortgage by 50 and living debt free for the rest of your life ?- do you think the bankers are happy for them "Good for them", oh no, they think, "how can we get hold of their money- we'll encourage them to MEW their equity and gamble away their financial security on a speculative asset" Welcome to the new Britain, gone are the days where ordinary hardworking, financially sensible people can ever expect to own a reasonable property, they will lose out to the debt crazed zombies every time -
Credit - Easy Come, Easy Go
Pappabear replied to OverInflated's topic in House prices and the economy
"Catch and Snatch", lure people in to debt with cheap credit and then spring the trap. However, its easy to say "dont borrow", "live within your means", in todays must have bling society its a different thing altogether to actually try and live debt free Bankers are throwing money to "have it now", they know perfectly well that once your are in debt they own you. BTW, read somewhere that creditors can even obtain judgements to have unsecured loan debts attached to property (becoming a stealth secured loan) -
Your right, MIRAS allowances for couples was withdrawn in Aug 88, up until then, couples could claim MIRAS individually, so lots of couples were trying to jump on the ladder in Spring/Summer 88
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For me personally, the 90's crash wasn't particularly harrowing, however, I remember many young FTB's disappearing from my estate, shortly followed by "For Sale" signs springing up like daisys, and staying there for months on end. As I said in my first post, I think it will be worse this time, FTB's are really over-reaching financially to get a foot on the ladder, I just wonder which straw will break the camels back?)
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I realised in 2004 that there was a bubble starting to develop, in honesty, the decision to STR wasnt purely to do with my fear of an HPC (there were other factors), however, the feeling of "deja Vu all over again", was instrumental in my decision to sell when I did.(Jan 2005) To the OP who mentioned all the extra equity I "lost". Hindsight is 20/20, unfortunately there are many people who possess this gift, not many around with foresight. I did what I thought was right at the time, I haven't "lost" anything, I got what I wanted. I made some money from the equity I invested (not as much as the house equity I supposedly "lost admittedly), however I dont worry about what I may (or may not have made), rather I am happy with what I have
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I have been bearish on property since the end of 2004, as a result I STR'd Why?- I just had a feeling that the rise in property prices was unsustainable, but did not really understand the reasons for this. However, as a "survivor" of the last property crash, I fully understood the concept of what goes up must come down. In 1988 i bought for 43K, was patting myself on the back when the house was valued at 60K plus in 1990, and kicking myself up the *&^* when it plummetted to 35K However, thanks to this forum, I now understand some of the reasons for the frenetic HPI, and feel that the impending crash will be as bad, if not worse then the early 90's "Ah- but its different this time" some of you may reply, yes, sure its different, its worse. The previous crash (as I remember it), was caused by the hike in interest rates due to an overheating economy (too much credit) Now, we have the credit spigot running full bore, more people have more debt then ever before, so if the 90's economy was overheating, then now it must be ready to go into meltdown. (but it hasn't yet- thats what worries me) The whole housing market now appears to be one huge scam, having exhausted the supply of buyers at 3x salary,the bankers are now trying everything to attract the GF's into the market with a whole new range of "products". 5-6 x salary, 40 Year mortgages, "shared ownership" (WTF- who the hell wants to "own" a third of a house?) etc etc Imagine being locked in debt for the rest of your working life,chained to the treadmill, need 2 salaries to survive, less chance of having kids - frightening This seems like scraping the barrel to me, the bankers are furiously trying to keep the party going, when. in fact, the party should have finished long ago The rise of the BTL mortgage, is yet another banker scheme to rob those people who have made some equity in their property, by encouraging them to become "property tycoons", and encourage them to get into more debt I have read arguments that the sub-prime fiasco in the US, will have no effect on the UK. I fail to see how it cannot have an effect. What happens when the debt-burdened US consumer stops spending?, What is the impact on the Banks and other institutions who have exposure to this? (banking is international) How many peoples pensions are invested in risky credit derivatives and MBS's Seems to me, the very thing that took the market up, will bring it down- the result will not be pretty. Do I want a crash?- no, mainly because of the huge impact the forthcoming financial holocaust will have on most of us. Every bust in history has resulted in the transfer of wealth from weak hands to strong hands, you can be sure that the bankers will escape unscathed - the Goverment will protect them at the tax payers expense Am I a "tin-foil hat" wearer- only time will tell, I suppose
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Its Amazing How One Greedy T**t...
Pappabear replied to sealaw2000's topic in House prices and the economy
Relax!! What this plank thinks his house is worth and what it would actually sell for are 2 different things do you think the lender's surveyor will come to the same valuation?- I doubt it, especially as it appears lenders are starting to get more fussy over valuations. The plank concerned must be on some illegal substances if he thinks he will get that figure. (must try some) On the other hand, there may be a lobotomy case with half a mil in his pocket banging on his door right now -
Don't Like Id Cards? Hand Over Your Passport
Pappabear replied to crash2006's topic in House prices and the economy
I think you hit the nail on the head with regard to the real reason behind ID Cards For many tears my attitude was like may others ie :"if Im doing nothing wrong, I have nothing to worry about", but when I think more about it, I realised that I shouldnt have to prove to the State that Im not doing anything wrong The pooh is going to hit the fan big time in the next few years, the ruling elite have come out of hiding, and are desperate for control over the slaves, before we the people wake up Forget any qaint ideas that the Government answers to us, they always have and always will continue to obey the bidding of their masters. the financial elite. Imagine if you do something that displeases the state, they will withdraw your ID Card, you will be a non-person, No bank Acount, No passport,no medical treatment, etc etc Of course the ID card is being "sold" on convenience, beware: this is the oldest con-trick in the book -
Significantly downsized, no more manufacturing, just a box shifter now
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Want A House? Don't Have Kids!
Pappabear replied to Garry AKA Pod's topic in House prices and the economy
In a sad way you are right In the Middle East and Asian cultures, kids are an investment, because ,in the parents later years, the kids have the responsibility for taking care of their parents, thats why a lot of Asains here in the middle east, are working primarily to give their kids the best eduction possible In our increasingly " Me first" culture, what can parents expect?, after giving kids this, that and the other, suporting them through university etc, what will happen is when that Mum and Dad become too much bother, they will be stuck in a Care Home, and the kids will end up squabbling over their graveside about who has what. -
Fact is, as it seems 5 x Salary is becoming the norm, it means the cost of mortgage debt is a higher % of income, then it was under the 3x salary rule> At what point is the % of income spent on mortgage repayment deemed to be "too high".
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Back in 1984, My fiancee and I were just ordinary factory workers, however we were able to buy a 2 bed terraced house for 19K, our joint income at the time (ex OTE), was about 7K per year This was also the case for alot of our friends, who were able to buy quite easily. The same house is now going for 125K, that means on the old 3X salary basis, a couple needs an joint income of about 40K plus to qualify Now in my area, (South West), there is no way that the ordinary couple earns that much, typically in this area the ordinary factory worker is lucky to clear 16K (that is if there were any factories left), call centres and tourism employment typically offer less then that Point is, no way can the ordinary worker now afford an ordinary, average house, you need to earn, what is in this area, an above average salary, to buy something at the bottom of the pile I feel sorry for the up and coming generation, My generation were lucky enough to be born at the right time, sat on their backsides, watch the equity grow for doing nothing and now pat themselves on the back for being clever property tycoons I fear that there will be (or already is), a growing divide between those who own property and those who do not. I wonder how all todays boomer "property tycoons" would have felt, if we had to face today's situation, back in the 80's?
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Want A House? Don't Have Kids!
Pappabear replied to Garry AKA Pod's topic in House prices and the economy
My step-daughter has made career out of laying on her back and popping sprogs at regular intervals. Did she keep the cot, pram, clothes etc from sprog 1 to use for sprog 2 and 3? oh no, she ditched it all, and got all new, due to a nice handout from the DHSS for each sprog that comes along. Once spent 50 quid on a pair of Nike trainers for the 5 year old, then she bitches about being skint - got no sympathy from me, told her she would have have to eat them in place of the food she couldnt afford to buy. Did the kid know or care he was wearing Nikes, not at all, it was done for bragging rights with the other chavettes 5 year old also has DVD, Telly, Playstation, 2 bikes, all on benefits FFS