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Sonic the Hedge Fund

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Everything posted by Sonic the Hedge Fund

  1. Anecdotally I know of two recent sales at prices way out of step for the area (West Herts) - and both have moved out from London One being my new next door neighbour, who is facing the embarrassing reality that an identical property just four doors away is still on the market for £100k less than they paid just a month ago. Apparently they arrived in town knowing absolutely nothing about the area and brought the first house that they viewed.
  2. I don't disagree with your observations Working with many well know banks, I am seeing a mini boom in services, due to consolidation activity due to the rash of takeovers following the credit crunch. Consolidation creates much work in the short term, but wholesale job losses down the line The fools who work in these banks think that they are busy because things are picking up; oblivious to the fact that they are hard at work digging their own graves.
  3. Welcome to the forum Note that the analysis relates to the US, in the UK the welfare system changes the rules somewhat. A combination of ultra low IR and mortgage assistance is holding back the fire sales, and LHA is propping up rents to a certain extent. But house prices and rents have fallen despite massive state intervention, and of course it can also be argued that the current level of welfare is unsustainable.
  4. Too true Also watch out for the 'faceplate and box swap'. I have seen too many houses with full set of shiny new sockets, switches and consumer unit, but 30Yrs+ wiring still lurking out of sight. One place I inspected even had 60yr old rubber cables wired into a brand new CU. Vendors say 'we had the electrics done' but all they have is a new consumer unit, and all too often fitted by an amateur. If you are at all unsure get it tested - it's less than a day's work to test a whole house. But also beware that only a minority of sparks are actually qualified to do test & inspection - ask to see their certificate - City and Guilds 2391 or 2392 are the usual ones
  5. Just as I predicted http://www.housepricecrash.co.uk/forum/ind...t&p=1633279
  6. Perhaps because Halifax have been taken over by a real bank
  7. That's how I read it too - deferring the reset for those already in negative equity. IMO this is obviously done for the benefit of the lender, because it avoids forced repo at a guaranteed loss, ensuring that the loss stays with the borrower The borrower effectively becomes a debt slave to the lender
  8. And not forgetting care costs. It's a double whamy because social care is funded both by council tax or means test - so the overhoused pensioner gets whacked both ways. Pensioners are already forced to sell up to pay for care. It makes me laugh that pensioners bleat about high council tax, because the cost of caring for pensioners is the fastest growing drain on LA budgets.
  9. But who really gives a sh1t about the demise of supersonic air transport; it has absolutely no impact on me nor the vast majority of the population, quite the contrary I think millions are probably somewhat pleased to no longer suffer concords' ear popping racket on a daily basis. Just like Concorde the MOX has absolutely no practical use other than to inflate the egos of politicians and line the pockets of consultants.
  10. You are missing my point, look at the growth in reserves shown by the RED line The growth in M4 is tiny by comparison, thus the NET effect is strongly negative This is a unique event due to securatisation unwind. One of the key motivations for loan securatisation was to get the loans off balance sheet, thus removing the requirement to hold reserves. Now securatisation has colapsed expiring loans are forced back onto balance sheet, banks must find new reserves to match this lending in line with their required capital ratio. Hence the huge growth in reserves
  11. The key point is in italics The rise in M4 has been offset more than four times over by the necercery rise in bank reserves as expiring securatised debt is forced back on bank balance sheets - see my avatar
  12. Tory bloke on Question Time was talking just like a HPCer last night, said something like the economy being one big illusion based on house prices, not worth working any more because of Govt constantly devaluing the pound in you pocket
  13. You are absolutely right We have rampant inflation in the capital cost of creating, or for that mater maintaining, credit. As ?...! has shown QE can only add exponentially to this inflation, as risk margin must necessarily increase at a time when the cost of risk is itself inflated due to uncertainty. The demand for money to match the inflation in the cost of creating credit reduces money available in the rest of the economy. As illustrated by the graph in my avatar This is money being 'sucked out' of the real economy by securatisation unwind, just as I predicted over a year ago. Hence deflation.
  14. Perhaps the Numis analysts do their research on HPC? Their report covers many ideas that have been explored on this forum
  15. Ah the beggars, just realized you have to pay £20 for an actual valuation to get the 'sale to asking price' ratio for an area
  16. Hometrack publish such data, and is about as current as mortgage lending data i.e lagging by about a month or two
  17. Thanks for that ?...! another pertinent explanation of something that I have been struggling to grasp with such clarity.
  18. I think it's great that cash rich buyers are pouring into BTL; the growing oversupply in the rental market will decimate rents (it is already). Thus overleveraged BTL will be forced into default by further diminishing yields, giving opportunity for those who are able to hold their nerve to buy up distressed assets. Monetary issues are all relative. The current level of QE is akin to bailing out the Titanic with a large bucket; it may slow things down a bit but it ain't going to stop the ship from going down.
  19. I don't disagree, but the examples cited are causes of inflation that are already in the system. Money is not destroyed, it is tied up in bank reserves; and defaults do not diminish bank liabilities.
  20. Expansion of M4 is a technicality, because the growth in money supply is more than offset by the expansion of bank reserves, as a consequence of securatisation unwind i.e. as banks must match the increase in loans taken back on balance sheet with new reserves (see my avatar, the red line is the growth in reserves) Thus monetary velocity is falling, as cash is increasingly tied up in reserves. A position that cannot be reversed unless securatisation is restarted or FRR is relaxed. Neither seems likely for the foreseeable....
  21. Thanks HAM This graph say it all really, Note how the rise in holdings by financial institutions exceeds growth in M4 by a factor of four to one
  22. Food is an interesting one; I am increasingly convinced that this is becoming a tale of two markets. At one end the Aldis and Lidls of this world don't need to be quite so competitive any more, as they have been flooded with new customers down-trading from the big four. So it's perhaps no surprise that the price of a tin of beans in Lidl has gone up; at the end of the day twice f*ck all is still f*ck all compared to Tesco or Sainsburys. But at the other end the big supermarkets are very threatened by this trend and are starting to compete more aggressively, with more 'no frills' lines and significantly lower prices on premium produce. High quality fresh fruit and veg and particularly fresh meat have all got cheaper over the last few months- We buy mostly fresh food and our shopping bills have fallen month on month since before Christmas. Yes the tins do cost a few pence more but our overall spend has gone down by perhaps 20-30%, because these rises have been more than offset by much cheaper meat, fruit and veg. One thing I have noticed though is a marked increase in supermarket products sourced outside the EZ - loads more fruit and veg from Poland, Morocco, Egypt, Africa, South & Central America; Tins and other processed products from Asia. Perhaps no surprise given the fall in GBP combined with the collapse in shipping costs; and I guess that British farm produce is increasingly exported to EZ countries now it's 25% cheaper to their supermarket buyers. This does not bode well for EZ countries with a large agricultural/food sector, such as Spain and Ireland.
  23. My take is that houses sold at an actual loss are probably mostly forced sales. Not a great number but if you probe the history for a given area they do seem to be steadily increasing, and not forgetting that just one such sale sets a new price floor. Also very noticeable that many show very little profit since 2003
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