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House Price Crash Forum


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Everything posted by huw

  1. Only if lenders believe we can pay -- and we plainly can't. Where is the surplus that would enable more debt at higher rates to be serviced? Bear in mind that higher rates would ultimately mean lower tax revenues and higher dole payments, widening the deficit even further. If it were as simple as raising rates, our 1992 rate hike would have worked to keep us in ERM, and countries like Iceland would be able to defend their currencies.
  2. Debt bubble had two consequences: 1. injection of fake demand in the economy, leading to the appearance of great prosperity. 2. inefficient resource allocation, leading to perverse incentives. Everyone whose business isn't 100% export based benefits from UK demand, so the first loss won't be anything except for painful, even though it was never sustainable. However, many enterprising and productive people in the country suffered from the inefficient resource allocation, so the second "loss" will see winners too. TBH the losers[*] won't be better off even if they abandon ship. [*edit I mean those who gained most resources from the bubble, and who now stand to lose.]
  3. ... which were built and occupied by people who used less fossil fuel than we do today, and which aren't going to magically disappear and be replaced with modern units just because we've signed an agreement. It's not the houses burn fossil fuels, it's people. If we seriously intend to burn less fossil fuel, fossil fuel is where the price signal needs to go.
  4. Why did they need to advertise in the first place? Mutuals exist for the benefit of their members; if anything, rapid growth (which tends to be expensive and risky) delivers the opposite of this. Diverting the resources toward offering better deals to members would cause organic growth, by actually being more competitive. And being smaller, nobody would be looking at them to bail out the feckless
  5. Sellers are usually buyers, so it balances out or even comes out in their favour, if they're upsizing. It's only bad news if they're over-leveraged and/or if they were relying on their "equity" to fund something other than a house, e.g. their retirement.
  6. Good article but I don't think this is true: There's oodles of housing, just not the kind that typical families want to live in or can afford. The typical new-build project was about credit-fuelled speculation, rather than any intention to satisfy genuine demand. All of which adds massive malinvestment to our other woes.
  7. ... until it suits the Anglo-Saxons to dish out a bit of nation-building violence again, right?
  8. And that doesn't even include the oil consumption that's leveraged off the back of the Americans' ability to drive to Walmart, fill up the car with oil-based, oil-transported, oil-retailed junk, and then drive home again. When they stop doing that, it's going to be more than oil-exporting countries that lose customers.
  9. A free market would require floating currencies and removal of capital controls among all players. If we had a real free market, we would sell more stuff to the Chinese (or buy less stuff from them -- one way or another things would be more in balance). Goldsmith's protected trade blocks would have been there to ensure that things like farm work paid enough to be worth doing. Consuming-power would have been lower for everyone, because lots of cheap production would be on the "wrong" side of the trade barriers. OTOH debt would not have exploded and land costs would not have become so inflated. People would have more affordable homes, but fewer and lesser-quality gadgets to put in them. As it turns out, many people haven't moved from farms to factories, they've moved from farms to daytime-TV. One of the positions Goldsmith takes in The Trap is that this notion of efficient agriculture is false; it's only efficient in terms of labour. Not in terms of land use or energy-inputs vs outputs, which are the most fundamental constraints on food production. IIRC he claims that human-intensive agriculture is more efficient in the terms that matter (because we're short on land and oil, and long on labour, so it's not valid to measure efficiency in terms of labour while ignoring the real limiting factors). To address your bolded question: some (many?) will find or create work through technological and economic innovation, but such work generally requires higher skills. As the bar rises, more will inevitably fall beneath it.
  10. There's the rub. I'm sure that some ultimately viable & productive businesses must benefit from grant money, but how can a state bureaucrat decide which they are, or if they really need the money to succeed? Not particularly well IMO, judging by many of the success-story case studies here. Would be fascinating to hear about the failure-stores
  11. However the highly visible banking bailouts have already transferred resources to the best-off (and I'm not talking upper-middle class mortgagors or even Brits here, I'm talking about bank bondholders who were saved by the transfer of their failing private loans to the taxpayer's books). The kind of people who you's expect to That is going to stick in people's craws eventually, both here and in Ireland.
  12. If we'd lost the empire and then tightened our belts as a result, that would be true. But instead, we've vastly increased our consumption, a result of the bastardised Mercantilist-Globalist-Debt-Credit monster that we've created/tolerated/enjoyed. I mean, the USA hasn't lost their empire yet, and they're in a similar boat to us -- look at the title of this thread.
  13. IMO fundamentally because of he hadn't yet traded his birthright for endless foreign-made goods, he was (directly or indirectly) paying his fellow citizens for what he consumed, and they were paying him. So wages were higher and there was no need to inflate asset prices to support massive amounts of debt.
  14. Globalism has created rival monsters capable of challenging the orginal Western monster in the global competition for diminishing resources (particularly energy), so protectionism won't do it any more. Too late to avoid a nasty and/or impoverished outcome now, I'm afraid.
  15. You can even argue (and I believe) that spiralling house prices were a crucial component of the globalist model, because HPs provided security for new lending, while new lending drove HPs higher. Pernicious self-reinforcement of the inflating bubble, with MEW and other boom-froth being tapped to fund spending/consumption. Everything was sacrificed on the altar of globalisation and cheap consumer goods.
  16. If this is true it suggests that Blair expected the unexpectable, and was indeed rather deft in the way he handed over and got out of the way (I'd thought it was likely that he was just lucky).
  17. But it may be that universities are the wrong "shape" (traditionally they seek to educate rather than to train) to deliver actual, cost-effective benefit across a broad spectrum of people. Vocational training is seen as second-class though, despite being fundamental to national prosperity. I guess that's why the polys were rebranded.
  18. afaics a graduate earnign £x would pay more tax than a non-graduate earning £x+1, this is the opposite of what most people see as "progressive" taxation. Seems like the perfect recipes to get the most valuable graduates to leave the UK.
  19. Those qualities are intrinsic to a fully functioning human; they don't need to be taught. Not all RE teachers are equipped to teach them in any case.
  20. So a trend-defying current account surplus of 0.5 billion that's immediately turned around in the following quarter, to a trend-confirming deficit of 9.6 billion, means we've "snapped back to something normal"? That was remarkably painless if so, but I don't buy it myself...
  21. Relying post-collapse on arrangements that existed within and because of the collapsed system, is optimistic IMO. You're just as likely to end up on the wrong end of one of those guns ... unless you're a charismatic leader who can command the obedience of the men with guns, instead of trying to exchange it for tokens of wealth from a previous age.
  22. Similar LTVs applied in the early days of self-cert. I see no reason why self-cert is unsafe, provided a sufficiently chunky deposit is required and provided lenders, regulators, brokers and borrowers don't all collude in turning a blind eye to blatant mortgage fraud. It's the fraud that needs to be banned, not a particular class of product. This just makes life harder for the honest self-employed. edit to add: banning naked IO mortgages, now that would make more sense.
  23. It's already been given to the creditors of failed banks. What you're seeing now is book-keeping to record what happened.
  24. It's Chinese Mercantilism, rather than their rating agency, that has destroyed Western credit-worthiness. The agency is merely doing the score-keeping in this mutually-destructive game
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