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House Price Crash Forum


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Everything posted by TTID

  1. Did you sell them already? Because it's not a profit until you close the trade.
  2. Neverwhere: I agree with all that you have written. I'm not expecting BTL to continue in its existing form. By 'fixed Buy to Let' I meant 'made Buy to Let go away, from the point of view of the priced out.' If LLs prompt the builders to produce poor quality homes for rental purposes, they'll get stung when they try to sell them on into the OO market. These new builds can only be rented out by their first owners. After that, their attractiveness to a LL is no longer an issue.
  3. Sellers of dates? I knew someone who used to get paid for dates.
  4. goldbug9999 and bankstersparadise: Paragraph 4 of the OP, first sentence. Licences are not transferrable. LLs who want to stay LLs have to hold on to their licenced homes. If they sell, they're not licenced homes any more, so other LLs can't buy them. Edit: Arguably paragraph 5.
  5. porca miseria: Accidental landlords would come under the what-ifs that I mentioned, with enough rules to avoid abuse.
  6. How about removing props as well as tackling the consequences of said props...? Edit: I don't seem to be able to quote.
  7. The problem of OOs having to compete with LLs in the housing market, combined with the low rate of building new homes can both be fixed with a very simple measure. All homes (not student or other short term accommodation) in the PRS would be under a licencing system. No new licences would be issued, except for new build homes. Done. Investment funds for residential homes go entirely to fund new build, generating increased build rates. OOs don't have to compete with LLs for non new-build homes, increasing owner occupation, with more reasonable prices. Another result, if LLs want to cash in capital gains, they can't sell to other LLs, as these homes are no longer new build, so the licences expire. This would dampen capital gains, as they would be selling into a more saturated market, thereby cooling the attraction, and therefore the volatility, of the investment side of the housing market. Some tinkering would be needed on the details and what-ifs, but basically... Ta-dah! :-)
  8. The principal problem with this piece is the implied assumption that this unemployed single mother somehow has a right to own a home and it's the taxpayer's responsibility to provide that. In the old days, she would have been a prime candidate for housing benefit in rented accommodation. Life is about to remind the UK about consequences, in a big way. A lesson that is long overdue. She's bleating about a situation that has come about entirely because of a series of her own choices, starting with the choice to increase the distance between her knees. Why am I paying taxes to keep her in a purchased home, while I'm renting? Repossess today, please.
  9. Although I broadly agree with your general sentiments, this is not a good example. The Italians were specialist oil industry construction contractors, working on a brown field installation, not maintenance workers, stealing jobs from local tradesmen. North Lincolnshire has no standing pool of experienced or qualified oil bears, who could provide the services required for this project. This is just the same as when we go to Qatar and Kazakhstan to build new oil and gas installations that the locals lack the specialist expertise to achieve. I laughed at the local guys at Lindsey Oil talking about protecting the future for the young men seeking work. This was a construction project that was due to finish within twelve months. It was for that reason that it was being carried out by an engineering firm from Holland, drawing expertise from wherever in the world they could find the best fit. Some of that was UK expertise, because we have a good history of that, but none of it was based in the local area. These things never are. Those Italians will travel to their next foreign location, to construct their next project. Specialists, carrying out a temporary task that the local economy cannot afford to skill up for. Imagine training a couple of thousand local techs, for a two year build, then paying them all off, as is customary at the end of the project. Future secured, son, on Sakhalin island, however. Bye bye. I'm in that industry and cannot complain about foreign workers coming here to build oil plants, when I have done the same in India, Nigeria and Holland, for exactly the same reasons. The global market can only sustain a certain amount of plant construction resource, and when it has finished a project in one location, it moves on.
  10. This is an illusion. The functioning of the economic system requires the almost universal belief in this illusion, but it is an illusion. Money has no fundamental value, in itself. £10 is an idea. It works because it's an idea that is commonly shared. It's not real. Me having £10 doesn't mean anything other than that for a short while I can get away with swapping that £10 for whatever someone else is fool enough to give me for it. Money is not wealth. Money is a tool, a lubricant, in the production and exchange of wealth. Of course, wealth generation requries land, but it requires human time much more. The land existed for millions of years before human time realised wealth from it. Consider the comparitive potential of a factory, with many people and a small surface area, and a farm, with a large surface area and few people. Each can start with some raw materials and convert them into profits. The factory's ability to uprate the raw materials into valuable items is far greater than the farms. Humans need the land to produce wealth, and the land needs humans to gather wealth, but human time is the renewable resource that drives the economy and is much overlooked in the question of monetarism. Agreed that the creation of money without the creation of wealth to match it is a vice. However, it is necessary to create money in order to purchase the human time required to produce the wealth that can later be sold to realise funds that can be used for further activity. This is money as a lubricant. The trick lies in getting the balance right of creating the right amount, so that none of the people who are agreeing to exchange their time for money see that the emperor has no clothes and that the stuff vouchers don't have enough stuff behind them to justify their existence. That would be hyperinflation.
  11. The fundamental nature of money is in its capacity to be exchanged for stuff. If there is more money, but no more stuff, that's inflation. If there's more stuff, but no more money, that's deflation. The above argument is founded on the assumption that stuff is a constant, so any gain on one part must imply a loss on another. This ignores the existence of a constantly renewing supply of stuff - human time. Human time is the fountain from which wealth flows. I first learned of this in the writings of Taichi Ohno, one of the founders of the Toyota Production System. In this, he observed that mining produces wealth one time only, in the recovery of resources, agriculture produces wealth once per harvest, but manufacturing produces wealth as often as you can produce an item. Industry converts human time and raw materials into wealth. More money is required to represent that wealth, in order to avoid deflation. The trick is to balance one against the other. The valid creation of more money, to represent this increased wealth, allows for one party to derive profit, without implying a loss on another part. Human time. We are what it's all about.
  12. We've been renting a lovely house for three years, now. We clear all of our plans with the landlord in writing, via the letting agents. So far, we have dug out an ornate fish pond from the garden, for our children's safety, demolished an extensive rabbit hutch from behind the garage and installed wrought iron hooks to support tapestries that we use instead of curtains. He thought that the last one was a particularly tasteful idea. We have authorisation to further: decorate, as we see fit, so long as there are no garish colours (he's seen our taste in furnishings, so I think that he's hoping that we'll decorate the place for him) and dig up half of the lawn to plant a vegetable patch for the kids. In February, he had double glazing installed throughout the house. We're good tenants and a source of dependable rent. If it's in their interest, and you're not going to ruin the place, there is every chance that they'll agree to a reasonable request. Edit: spelling
  13. Not with houses. The contrarian news indicator exists in the securities markets because the professionals making the market are the same people making the news. They rely on retail numpties to be taken in by the news, so that the pros can get themselves positioned for the counter move at better prices. Doesn't work in housing, because the retail numpties are the market. When Joe Public catches a panic attack on the stock market, he sells to an institution at the bottom of the market. In the housing market, the news is positively correlated with the market, if a little lagged. In this way, the news is positive going into the top, with a short period of contrary indication (back to normal preceding the peak, for instance). As we saw in 2007, however, once the top is in, the negative comments in the media don't prompt the public to sell to eager institutional buyers. The potential buyers are other panicked retail numpties. This makeup of the housing market, where it is predominantly made of retail participants, is what separates it from other traded markets. If you were to separate the residential properties that were commercially owned, you might see a more traditional contrarian response, as in 2006, when the pro money left the market, while the news continued to furiously ramp the market for a good 18 months after.
  14. Following the initial decline in house price indices, we had our 'told you so' party, but then things quietened down here for a while. The crash had arrived, as predicted and debate died away, as there was no longer any question about the potential of HPC. Discussion then turned to why this site went so quiet. I remarked at the time that it was because the issue under debate had been settled by events. During the government engineered, pre election house price rally, the bulls politely re-emerged to declare that the crash had failed to materialise, that things were getting back to normal and that the correction had been minor. Many thanks to all involved for priming the shadenfreude tanks for us. Told you so. Bull trap over. Lifecycle of a Bubble, right on track. Here comes Fear, leading to Capitulation. Party Party! Smug again. Thanks, guys.
  15. We see a lot of opinion from bulls, trying to suggest that the previous decline was the crash and that the recent rally is destined to head back to the sky. This market has taken exactly the form predicted by the 'shape of a bubble' graph. The rally has stalled before taking out the previous high and is building out a lower high. What follows, as the bears expected, is the real crash.
  16. This is the logical fallacy of the appeal to authority - the idea that a thing is true because it is the opinion of an eminent person. It may be that your professor does not use it as a measure, in his opinion, but until the explosion of unsustainable credit during the recent bubble, the housing market used it as a measure, in living fact, going back at least to the second world war, and not just for FTBs. The price to income ratio cycled round a flat average of about 4.1:1, getting as high as the mid 5s and as low as the 3s. The cycling around this mean was exactly in phase with the availability of credit. The recent bubble was caused by the long term mean being abandoned by a bubble of unsustainable credit. This credit has not been repaid. Until that situation has been rectified, either through repayment or default, prices cannot resume any sustained upward trajectory.
  17. TradeWaveLive at www.tradewavelive.com Primarily positional trading focussed, but necessarily entails discussion of the economic fundamentals underlying market movements. (Full disclosure moment: I'm a paying customer of the above site. I've just attended a course with them. I'm recommending them) Pearl Fisher Investments www.pfiii.com Oliver Jurgens' investment newsletter. Excellent fundamental and technical insight with a long term perspective.
  18. This is still a very, very simple issue. The problem: House prices became artificially high, because many, many people were allowed to borrow more than they could afford to repay. The question: Where do those people ever get the money from, to repay all of those over-extended debts? The answer: Wages. The implication: Watch wages. At the peak of the insanity, house prices got to double their mean value, with respect to wages. This relationship must and will reset itself, regardless of government desires. It will not return to its mean ratio; no market ever does. It will overshoot its mean ratio to the downside. In order to merely return to its mean ratio, either house prices have to halve, or wages have to double. Are wages doubling? Just wait. The fact that the bulls are so assertive is a sign that the top of the bull trap is close. We have had the initial drop. Now for capitulation, panic, despair. As I said in 2007, soon, the only things worth selling will be tickets to the show. What is coming is a once in our lifetime event. Make sure that when this show starts, you're sitting in the audience, with your popcorn and schadenfreude and not on stage, providing the entertainment. In the meantime please gloat, bulls. It makes your eventual schaden more freudous. Edits. Typos, punctiuation.
  19. The point that the article makes is not that the government money will stop flowing in 2012, but that the money that has flowed until now will have to be paid back by 2012, even though it has been lent out to borrowers in 25 year deals. This means, not only do the lenders have no more money from the public coffers to lend out, but that they will increasingly have to compete on the commercial finance market, to secure the funds needed to pay back what they have already lent. A third option, is that they will reduce the numbers of loans already on their books by encouraging existing borrowers to move on at the end of fixed rate deals. All of this means interest rate hikes. Not in 2012. Much sooner than that. The government is the only entity that has stood in the way of the natural correction in the market. The government has until the election to keep this ruse up. The market is already calling time. Game over.
  20. And some, on both sides, are merely showing themselves to be patriots, with pride in their own nation. There's a lot of history behind the Union, both good and bad. It's understandable that there might be some darkness to the passion. Once the Union is dissolved, and we're all working together in Europe as equals, our common values and history will emerge as a uniting, rather than dividing, influence.
  21. I can't wait for English independence. Hurry up, please, Scotland. Hopefully, you'll inspire Wales, too. I don't expect Northern Ireland to vote for independence before an English awakening renders the Union defunct.
  22. Hating the Wilsons is an infinite concept. There can be no OP. In a Zen sense, this thread has been running longer than time itself.
  23. 'strue. I only wanted a seven grand business credit card for my little company and I had to have 'HSBC' tattooed on one of my testes.
  24. I've worked on this site on another project and on this project. This is not employment. It's a construction project. There are no local tradespeople with expertise in constructing chemical plants, because there hasn't been a chemical plant built in that corner of Linconshire in a generation. We go worldwide and deliver these things where they're needed. Then we leave. Chemical plants are built by foreigners (internal or external foreigners). Then they are operated by locals. It's not cost effective for a community to invest in training staff for jobs that are only going to be in the local area for a couple of years. If these strikers want to do another refinery, the next big jobs are in Portugal and India. Regardless of how this turns out, nobody is defending anything for their kids, apart from this week's pay packet. I'm currently doing a project for a plant in Scotland that I last worked on over 25 years ago. I listened to all of the whining back then about me taking away local jobs. It's nonsense. If you had my job at that location, you would need to leave home after a year, because my job, in that location, finished. The big job being bid in the UK at the moment is a full field development for Kazakhstan. Borat is much cheaper than me, but it's more cost effective for the Kazakhs to pay me to go and sort it out then bu88er off, than it is to train a population up to the level needed to get one of these things in safely, then have them sit around bitching for a generation that there's no more work.
  25. It's simple, really. It's no longer a debate. We spent months debating whether there would be a crash. Debate over. Now, there's an effort to reverse the debate, from when will the top be (if ever) to when will the bottom be. We who crow, can forgive ourselves for being disinterested in paying any credence to those who were so spectacularly mistaken in the former debate. We assume that we have a track record, now, so there's no point debating when the bottom will be. We're the Pope. We're infallible.
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