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House Price Crash Forum


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Everything posted by IMHAL

  1. Yeh I remember seeing this pile of tosh a while back - the idea of providing negative IR's so that money decayed over time - It is theoretical nonsense. Negative IR's are the exact equivalent of Printing More Money (ony faster and more transparent) The guys who came up with this idea is barking - money would cease to be viewed as a store of value and very quickley people would go back to the barter system or gold. It would flop spectaculary - the authorities much prefer to use the tool of printing as it is much less transparent so the populace is conned by the slow drip drip of real inflation (expanded money supply) stealing into their store of fiat. HAL
  2. I think what Brown means by an early warning system - is a quango that will consist of a few dozen of his mates, paid at least 200k per year each with BTL portfolios, employing an support team of 1000, that hires consultants to assess what the IMF is really saying. In this way the advise given by the IMF can be thought through......... and then disregarded as scaremongering. What Brown really wants is to rewind 10 years, have a nice easy time spending our money and basking in the easy monetary climate of yesteryear...ahhhhh those where the days. HAL
  3. Dunno about that - there is a saying that goes when a recession occures they tend to find one trigger and then blame that [in hindsight]. Its a popular myth to disolve responsibility. It puts the event out of the control of the authorities [unforseen and unforseeable event] and therefore not the responsibility of those that should have been preventing it from getting to that stage. I think that the scene was set for a major fall at the time - we had a bble in both housing and stocks - I like to see it as "a bubble that was looking for a pin". We are in a similar situation - its just a matter of time before the bubble finds its pin. HAL
  4. Great replies BTW. I see it like this - why would banks continue to overextend their lending when they know that the risk of not getting their money back is getting greater? From the consumer side - they have signalled that they have already reached and gone beyond their limits, they can't stand the pressure no more and will walk away from the debts. From the producers side - they are putting up prices as resources are getting more expensive, they cannot and wll not take the hit on their margins. If you lower IR's you get more competition for resources (higher base costs) and then more debt and defaults due to higher inflation - oh no can't have that because we have just come from there. They have painted themselves into a corner - the only sensible thing that they can do is to steer a steady ship (keep IR's steady) and take the pain. They want to inflate the problem away but they cannot do this unless 1) they have wage inflation or 2) they make the state smaller and give massive tax breaks - they need to fire up the consumer but the comsumer aint got no cash. My theory is that the delay between general price inflation and wage inflation will scupper their grand plan to inflate the problem away - the ship will already be sinking by the time new money enters the scene - all they are doing is making it worse by lowering IR's, because it has already hit the buffers, they are reducing the ability of the consumer to spend by taking away discretionary money by stoking inflation. HAL
  5. I live in E Anglia - the local property rag has gone from 115 pages to just 55 in the space of two weeks. My theory is that the lack of properties in the local rag are due to EA's not advertising before Xmas (no point) - it also saves the EA's money which they must be short of. Also another observation is that the EA's are advertising how well they have done in 2007 - lots of pages on all the properties they have sold - but few properties advertised. The last few weeks have also seen less and less 'reduced' properties advertised. My conclusion is that the EA's have colluded in the run up to Xmas (when it is traditionally quiet) to give the masses the impression that a) all is well there is a shortage c) not much is falling However if you contrast what was being advertised just one month ago - 115 pages - lots reduced and even EA's with statements saying that the 'market isn't as bad as the press makes it out to be' - it all smacks of a desperate last defiant stand before reality hits home. The new year will out this collusion as EA's realise that they cannot spin themselves out of this one - they are going to have to reduce and get selling. HAL
  6. Question Time? More like.......... Waste Of Time. Krusty - thick as a pile of sh1te and mad as a bag of monkeys Blears - scary as a ferel cat and devious as a politician with something to hide Morgan - the village idiot without the uniform Kenedy - respect but another one of his off nights Pattern - clear, clever and a leader The conservative need to dump that Krusty air head before she damages them. She has adequatley demonstrated that she does not understand the market dynamics. What made me laugh was that she was introduced as 'the housing expert' - do politicians not realise that she is a presenter and she reads a script - its like getting JR Ewing from teh Dallas soap to run an oil company. Bad decision. Krusty OUT! before she damaged the opposition - and god knows we need a good opposition now [thank god for Vince] HAL
  7. I think you are onto something there - theory - here goes. The yanks have been reducing IR for a while and are suffering from a plunging dollar - this is leading to talk of hyper-inflation - they know that the game is up and if they don't stop their game of lowering IR's then they will go the way of Zimbabwe and the dollar will be worth toilet paper. So what do they do? They get together with all the other CB's to tell the world that they are acting in concert - the world says hey... if they are all acting together then the dollar and the other currencies are effectively joined at the hip. The Yanks are effectively looking to other CB's to lessen the effects of their IR policy - in effect they are exporting USA inflation expectations around the world - yikes!!!!. HAL
  8. This is looking very ominous. How will the markets react to this? Will this mean that the stock market will go exponential in a fight to tie up money to something that will preserve wealth?. [hence Buffets move into utilities?] I would have thought that gold would now start to move up up up. Could someone could enlighten with what the implications are. HAL
  9. With you all the way on that. These NuLabour guys have been taking the p1ss for years now - high paid jobs for the boys - planning developments for funding buddies - the list is endless and compounded by initiativitise - a constant money-go-round of new policies that are conciled to the bin of hare brained ideas that only a wall of highly paid NuLabour policy makers with a wall of our money could possibly dream up. They might as well be spending money on digging holes and filling them in again - it would do less harm. Its time for the NuLabour socialist experiment to end. HAL
  10. No mate average salaries for a factory worker in Greece is ~8-10k Euros - house prices are about 120-150k Euros for a two/three bed flat in a small town outside a city. They have it worse than us - however they by enlarge have inherited money (more of the population own land - so lots of old mony exsists) - this is what they are living on - the old money will come to an end eventually - but this may take a generation. Non the less they are finding it hard and they will find it harded. HAL
  11. All good questions. My take on this is that the banking deregulation experiment has failed - the banks expected ordinary people to be rational about what they borrow, especially when they consider that their homes are at stake - that has proved to not be the case. So - we had profligate lending matched my profligate borrowing - followed by laws which minimised the impact of arrears and viola! we now have a system where the banks and the whole system is a hostage to the people [the indebted ones that is]. So now the system is deemed to be not operating in a self correcting mode - the pain of correction is thought to be too much for the system to bear and may collapse. The net result is an all too visible hand on the tiller by the politicos in the most sensitive part of the financial system- this will inevitably result in unintended consequences. These consequences may take time to appear, but appear they will. [see the USA freezing of IR for subprime]. When these consequences manifest themsleves - the politicos will be tempted to rig the market again [to rebalance the problems they have caused] - this is a sure fire path to self slow corrosive destruction. The lowering of IR's at this point in time also send out the wrong message - they are saying we will always come to your rescue - so don't warry - if it gets bad we will help you [Northern Crock, IR cut in 2005, Will Hutton with his balmy ideas]. The BoE are now in doodoo teritory - we know that they know that we know that its all based on HPI - without it - there is no growth - so they have no option but to try to keep HPI going - the problem is that they also know that any more growth in HP's will result in certain destruction of the economy and certain depression. There only hope is for a softish landing in HP's followed by moderate 'under the radar' inflation [wage and real] to moderate its effects. The problem with their soft landing scenario as we all know is that when momentum starts to build the outcomes are uncertain - if HP's start to go down as a result of high LIBOR and credit tightness then they can kiss their soft landing goodbye and we will have a recession anyway. There will no doubt be a period now where we all assess what the mpact of this rate cut is - if LIBOR comes down then they will have succeeded in making everyone of use a debt slave - with savings or not. HAL
  12. What is the bet that they will Lower IR again in January? I think they will and in Feb and in March..... If they do then Merv will keep his job - the question for one and all is when will the meeja pick up on the fact that pertol prices are starting to to their pockets and heating costs and food costs.........ad infinitum. The MPC will not be happy until they start to see the inflation monster again - they need something to fight. By this time it will be too late - pay awards will be up and wage inflation will start eroding the accumulated debts. Only when the meeja start to sing about the costs of living will we get a return to sense. HAL
  13. Lets face it an IR cut would have the opposite effect of easing the strain on the economy: Saving on mortage (if any) - £20 per month Loss on inflaton - £1 per litre to £1.10 per litre - average loss per month £10 Loss on heating ~ 5% = £5 per month Loss on Food ~ 3% = £5 per month So by my reckoning they would be net neutral by the end of the month - with the increased prospect on further inflation to come. HAL
  14. An IR cut on the card today and the VI's out in droves baying for an IR cut. The effect of an IR cut has been discussed with the majority of pundits sensing that the actual impact on the borrowers will be negligable as LIBOUR is the factor that drives mortgage rates. However we have seen that in 2005 the BOE reduced IR to forstall falls in house prices and it seemed to have worked - magically taking the pain away from home owners and freeing them to get into more debt and carry on partying. In 2007 Northern Rock where bailed out by the BOE just when it looked like pain was on the horizon - the government even provided extra protection to NR savers that was not afforded to savers elsewhere - other banks must have taken note and must be wondering is there is any price to pay for taking excessive risk. In the USA there is talk and solid plans to bail out sub prime borrowers - with Will Hutton talking about similar plans here. I feel that an IR cut today will simply re-enforce peoples view that the BOE and Gov will always come riding to the rescue of the hapless and feckless - the stakes of Moral Hazard have increaed sgnificantly - leading even the sane, prudent and resourceful to question the sense of being on the right side of any financial contract. If the BOE cut IR - given that HPI is still YOY positive, growth is still respectable, Inflation is on the up, employment is strong, spending is still relatively healthy and the issue of Moral Hazard so accute then IMHO we are headed for hyperinflation. What is your view? HAL
  15. This is a one dimensional arguement to say the least. If the state cannot provide basic services entirely financed by a relatively modest wage then surely the state is too big and inefficient - the services cost too much and there is too big a saftely net for the hapless and the unfortunate (turning them into the hapless?). The problem is that the real cost of living has spiralled out of control - which is being financed by you and me by increasing levels of debt and leaving all of us out of pocket - for a very long time. HAL
  16. Very very good point - not one picked up by any of the politicos so far. This would get the blood boiling if put to the public and make Gordos job (pathetic attempt at) even tougher. HAL
  17. This is just public bid posturing - they are sending a message to the bidders that they 'really are' prepared to break it up unless someone comes up with a non extortionate offer on the taxpayer. My guess is that they have put this in a place that will not get too much public attention - they like to keep the message simple for the sheeple - oen't want to panick them into taking out more saving - or disillusion those valuable voters that have cost them so much money to hang onto. The bidders on the other hand will sit back and watch the gov sweat - at the last minute they will up their offer by a tiny bit and the gov will cave in (easiest option for them) - the taxpayer will be utterly shafted and Virgin will make a bundle. HAL
  18. Generalisations are likely to offend someone - that some one being you on this occasion. I think that the meaning behind the generalisation was that resource/investment is being diverted into areas that are in the logm term not good for the economy - these are false avenues - a kind of mal-investment that results from speculation into something that ultimatley proves to be false. The gentleman is simply saying that if we did not have this mad speculative bubble then that investment would possibly have been targetted at something more productive (wherever that may by - engineering, media etc). No one can blame anyone for deciding to work in any environment that pays the best wages - its just that this level of diverted resource into a false avenue means that we have lost time and skills in other potentially profitable avenues. HAL
  19. All makes sense if you think that oil is running out - so go from the petro dollar to the gold backed Amero. Ahhh - thats better - the yanks are still in control. HAL
  20. I do not think this will work - it creates a vicious circle - after all who would buy mortgage backed debt if the prospect of a rate freeze is on the horizon - it will make worse the woes of the credit market. Making both short and long term money virtually impossible to get for any potential home owners. It would essentially make cash Super King. Have I got this wrong? HAL
  21. The original web based article had many intelligent comments from readers - needless to say that most of them where less than impressed with WH's arguements. My own view is that WH has lost the plot - he can see that something nasty is coming down the road and wants to do what every good champagne socialist wants - protection on the down side but have all the gains from the upside. If WH is reading this - GROW UP - we either live in a socialist state and the government confiscates all assets and hands out equally to all citizens or we live in a capitalist state and you take your chances in life - that means speculators are allowed to be punished by the market. I really thought that Labour was about helping the poor - no - they like to help themselves stay in power by whatever means necessary. HAL
  22. He's talking out of his jacksy - he is basically saying that if prices go up then consumers should be allowed to borrow more - the trouble with that arguement is that you are basically saying that the public should continue to subsidise industry by printing more money and allowing consumers to get into even greater debt. This turkey is advocating hyper-inflation - lets hope he does'nt live in Diss and DEFRA don't find him. HAL
  23. LOL!! I think Nu Labour are trying a perverse sort of reverse attempt to colonise the world - instead of occupying a country and then running it - they are inviting everyone into this country and then when there is no one left in the host country, they will sneek in and swap. Breaking news! Nu Labour have announced their new vision which is to swap country with Poland. They aim to do this by inviting all Poles into England and then when there is no one left in Poland we are to sneak in and take over. Gordon has set two targets 1) that the rate of Polish migration is to be increased to 3m a year 2) that each year indigenous Brits will be migrated to Poland at a rate of 5 million a year. In this way we should achieve a country swap within 15 years. Gordon has been keen to point out the upsides which are that Poland has more land, better infrastructure and pleasant weather - with an added bonus that we will no longer be neighbours with the French. His long term plan is to re-use this strategy and eventually invite all the Russians into Poland and then swap country with Russia - he claims that this will ensure energy security and Great Britains rightful place on the work stage. Gordon has shrugged off suggestions that Stalin is his hero and that leading Russian was always his long term plan. HAL
  24. I forgot to add NHS dentists to my list of typical expenses that a migrant may use - then again there aint any so maybe it was not such an oversight. Seriously - this government has been guilty of putting over one sided stories for so long (spinning and getting away with it) that they now think its normal - no wonder democracy is breaking down - typical Nu Labour. Here is a corking example - Brown says he cares about the environment: - we trade carbon used in this country so that other countries burn the same amount that we do not use - Derr?? - we promote growth so that...... we can consume more - Derr?? - yet we disincentivise saving so that.... we can consume more today - Derr? Nu Labour thinking is so sclerotic that they cannot see that a savings culture actually makes everyone better off and promotes delayed gratification (remember that?) which conserves resources. The problem with saving of course is that it would not give Gordon more taxes with which to buy votes. Its quite simple: Growth = More Resources Consumed (the efficiency arguement is usully bogus) Even idiots understand this simple principle (but not Nu Labour). HAL
  25. [ Was it REALLY worth it? Well the answer is probably not: Typical state funded expenses for said labourer. - Cost of school for a child - Cost of doctor or hospital visits - Child benefit - Road use - Local services (police, libraries etc etc etc) - Translation services, Government quangos to see how we can integrate better etc etc etc And what is the average wage for a migrant £15k per year out of which they pay say £3k in tax and get back some of that in child benefits. It does not seem to stack up at all - the private cost of an annual hospital/doctors visit alone would wipe most of the tax paid by the migrant. The government have given us the 'free lunch' message that migrants are good for the economy - well they may be but the rest of us have to pay for it in increased council taxes and a lower level of servics that we thought we'd be getting with rising taxes. I am sure that research has been done on this before (probably by a state body that wanted a specific outcome) - but I just cannot see how it could stack up! I am not normally so vocal on this issue - but it has become a joke, the Labour government have treated the public like fools. HAL
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