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Sonic the Hedge Fund

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Everything posted by Sonic the Hedge Fund

  1. You aint seen nothing yet, just wait till LBG start the real slash and burn at HBOS Of course this will not start in earnest until after the election
  2. A bit different in my town (West Herts) Flats/Terraces are staying hard down, but so too are Detached - the real pick-up seems to be in Semi-Detached, with prices for these now closing on detached - the average sold price for each is now very close, almost equal. This suggests to me that the semi buyers out there are purchasing at the limits of their budget - otherwise surely they would seek the obviously better value in a detached house for just slightly more? Whichever way you slice it the local market looks very fragile
  3. Creative of our illustrious chancellor to announce the breakup of RBS and LBG well in advance; thus depressing the share value, ensuring that the taxpayer gets royally shafted He obviously does not want to be outdone by GB's gold sell-off
  4. I think the point is this: Consumers do not import the goods themselves (at least not to any economically significant extent) Consumers mostly purchase their products from retailers; thus to judge the net effect of currency swings you have to look at the make-up of retail prices The base cost of the product (i.e. the factory or farm gate price paid to the foreign supplier) is usually less than 30% of the final retail price; often as little as 10% or less for discretionary consumer tat or basic food products. The remainder of the retail price being comprised of transport, distribution and marketing costs, plus retail profit, most of which is denominated in the home currency. Thus the effect of currency swings is limited, being a proportion of a proportion - where this is 30% of just 10% or less, it's a very small increase that retailers may be forced to absorb by competitive forces
  5. But is it? Breakup of the state owned banks was expected but not until after the election There are plenty of small investors long on LBG who may be panicked into a sell-off
  6. The superbank LBG are the key LBG actions show they want monopoly not competition, they will do everything within their power to stop the group being broken up.
  7. This is not news LBG saw this coming many months ago. Why else would LBG be trying to buy their way out of Government guarantee, at penalty rate?
  8. I share your sentiments on this Bub, but personaly I don't see any need to take to the streets I doubt that this latest governement ploy will have any significant effect whasover. £8bn is pish in the context of the context of the ongoing funding gap; and the Rcok will not reignite mortgage competition alone while much larger competitiors, such as LBG, are willing to sit on the sidlines. To me it smacks of a final act of desperation or perhaps simple vote purcahsing - let's not forget the striken Rock is based in Labour's political hertland
  9. One of my neighbors paid £480k just 6 months ago, Similar house a few doors down is on now for £299k Ouch!
  10. But the Dutch Government is picking up this one too IMO the most important fallout is the knowledge in the banking world that this CAN be done - savers quite deliberately brought down the bank in an orchestrated bank run. This is quite the opposite to previous runs where the motivations are reversed - Savers fearing collapse clamor to recover their funds
  11. Appolgies if already posted, but this story from Holland is just amazing Anyone care to start a new run on the Rock? Link
  12. It's a stand-off ATM But if prices do start to fall again, then we will see panic.
  13. True, but I suppose it's arguable that the imports are often cheaper because of the rules that UK producers must follow
  14. I don't know about 'long' term The tipping point of generational wealth transfer is now, or fast approaching
  15. Much of the imported food on UK supermarket shelves is produced by British interests that have simply offshored production to lower cost regions, particularly in Eastern Europe and Africa Agro-chemicals are Britain's largest export by value So the UK economy as a whole would probably benefit significantly from a global food shortage
  16. See my previous post......QE cash machine only works as long as government debt is increasing
  17. Moody's affirmed AAA for the UK on the back of promises of government spending cuts to reduce government debt. The flip side is that future UK government (of whichever party) MUST cut spending or face losing the rating
  18. The asset management company may be a wholly owned subsidiary of the lending institution. Banks are increasingly using this Enron style fiddle to hide their massive mortgage losses off balance sheet Remember what happened to Enron once investors caught onto the fraud? Yet another reason why the current uptick in HPI is unsustainable,
  19. Correct in theory, but two very significant flaws in the argument: Britain does not produce a great deal in the way of tangibles; thus we are dependent on imports. Even a fair chunk of the service sector - i.e. virtually all non-food retail - is wholly dependent on cheap imports Second, not all UK debt is sterling denominated. IIRC about 1/3 of securatised UK mortgage debt is denominated in other currency USD, EUR, JPY or whatever. Ironically the expiry of such notes may be supporting demand for sterling; as the loans go back OBS. So there comes a point where currency devaluation no longer erodes the net UK debt Hence I don't buy this 'trash the currency to inflate your way out of debt' argument. It will not fly in the face of economic reality. But that does not mean that the government wont be stupid enough to try.
  20. Try telling that to a Tokyo FTB from the late 80's - There are plenty of 'debt slaves for life' in Japan Why? A demographic time bomb exploded in Japan in the early 90's The UK has a similar demographic time bomb about to go off
  21. Not just substitution, IMO this is also about price elasticity in the face if rising demand for cheap food The likes of Lidl, Aldi and Netto have been gifted with a wave of new customers. So they don't need to be so cheap. Meanwhile the big four are having to be increasingly competitive to retain customers - Tesco, Saisbury's etc. are piling up new 'discount' lines So IMPO cheap food is getting more expensive; more expensive food is getting cheaper.
  22. Friend of my wife just got a £3k 'refund' of bank charges She has not accrued anything like that amount in bank charges; but it is the exact same amount as her overdraft. Draw your own conclusions
  23. Lets hope so Perhaps the uptick in building starts (albeit from a very low base) is a sign of things to come
  24. The 'land price crash' (and the developers response) was key factor in HPC in USA and Spain Developers holding large land banks struggled to stay solvent in the face of declining land values; as these reductions fall straight onto their capital balance sheet Some developers were therefore forced into 'fire sales' of new builds to provide the cash flow to stay solvent Others fast-tracked developments in order to increase the value of the land already on their books, resulting in a surge of supply into a falling market
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