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House Price Crash Forum


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Everything posted by equitystasher

  1. This is what the BofE are looking into at the moment. Are there any loop holes in EU law that lets them print money.
  2. Would'nt you of prefered to wait another 2 years and paid the same amount for a 3 bed semi? Good luck in your new home. Just don't tell the neighbours what you paid for it
  3. Good post. I do however do not agree. Sentiment is the biggest driver of them all. I think sentiment has turned to far the other way and by the time the goverment get these schemes up and running they will find them ineffective as the downward spiral will have further reinforced negative sentiment. The whole U.K economy is geared towards ever rising house prices and borrowing. To make the econmy work in its curr ent state you need to convince large amounts of people that it would be a good time to take on more debt or a mortgage. Most people now just want to pay down their debt or save for the hard times.Most with money are being rewarded by waiting and will continue to do so inforcing the downward spiral in asset prices. All the banks will not want to catch the falling knife even if they get shot of their bad debts. Again proper risk pricing will rule the day which will mean a continued fall in house prices back to where the have historically been in relation wages. The whole reason the securisation was so huge was because investors were defrauded.They thought they were getting good returns for low risk.This made credit artificially cheap Even with government guarantees for a proportion of the investment the investors will want a decent return and will want the investment to be transparent so risk will be properly priced in crashing housing market. Investors move in a herd.Always have,always will. They may very likley not touch anything to do with securitisation. Money pumping willl just cause a bubble in something else ie Gold
  4. The problem is that us and the Americans are trying to treat the symptoms and not the cause. What is the cause of all this mess? To many years of easy credit which has been peddled through fraud causing the western economies to become over indebted.This has caused the world economy to become distorted to feeding this unbalanced model. The exporting nations totally geared towards supply the fat and credit bloated consumer nations.The money earned my exporters relent to the fat and ever more bloated consumers to a point fraud caught up with the system. The people that caused this mess are still sitting in their jobs and are using the same tools to try and get us out of the mess.In the the last 12 years when ever the economies have showed signs of correction they have just pumped up the credit even further through rates and the fraud called securitisation,foolishly believing in that they engineeered their way out of it. Instead they have just made the world a more distorted place and put off the day when we have to face the rebalance. Government policy now is the same as it has always been. Pushing to get credit easier,cheaper out to people and make them spend. Punish savers who put away for tomorrow. They must face up to the change and let change happen which might mean standing back and letting the market rebalance Yesterday's world has gone. We are now to far past the point of no return. The money merry go round is now spinning in the opposite direction. Peoples attitudes have changed or are changing. The biggest driver of anything to do with money as we know is greed and fear.We are into fear stage We are now well into the rebalance so will the policy of trying to make credit easier work again? Short answer is no and here is why. The Scandanvians model worked because they sacked the people responsible for the mess. Got all the bad debts out into the open and they were MARKED TO MARKET and then recaptilised. This basically let the market correct and the govenments did not fight it. This allow the econmy to find its natural pre bubble level status and people had faith and they could start again. What we are doing now is similiar to the Japanese. People say the Japanese did not act quick enought but to be honest this is a red herring. The U.S acted very quickly but have been unable to reverse or slow the decent. The problem is preserving the status quo. Japan,U.S and the U.k are not sacking or bring to justice the people responsible so those people with the same ethos are still in their jobs. The U.K and U.S goverment are taking on even more debt top try and sustain or put a floor into the asset levels of the old economy. The problem is that they do not have the funds available to prop up the pyramid. Also policy is a very blunt instrument. By carrying out stimulus packages and bailouts the money will go to all the wrong places sustaining ineffecient companies and banks. This is in effect a tax on the effecient parts of the economy which slows the crash but causes prolonged stagnation hence Japans lost decade. The problem is to much debt. The solution? Bad debt needs to be paid down or written off. The over excesses punished.By trying to put a prop under the economy at a false level will just cause Japanese style slow deflation.It might slow the decent at best but cause a slower more painful decent. It a bit like pulling a plaster off. Slow and painful or fast and get it over with. Yes it would be very difficult for a few years but we would come through and we would be back to where we were in the mid 90's. The problem it takes a politician with balls the size of Thatchers to do it. edited typo
  5. So why repeal a 168 year act if it does'nt matter? It stinks to me and shouts cover up.It would be interesting to see the small print. There should be greater transparency in the banking system led from the top instead it looks like we are trying to sweep the the big pile of sh1t under the tax payers carpet and hide it.
  6. I would of thought the money market would soon "smell" if they were printing and you would see the pound collapse. The US gets away with it to only a certain extent as they are the reserve currency. I cannot see the BofE being able to do it with out a collapse in the £
  7. From The Sunday TimesJanuary 11, 2009 Gordon Brown calls in top bank bosses Treasury prepares new lending package as prime minister hosts high-level talks at ChequersIain Dey and David Smith GORDON BROWN has invited the heads of Britain’s biggest banks to Chequers today as Treasury officials work on the final details of a multi-billion-pound plan to kick-start bank lending. Marcus Agius, Barclays’ chairman, Mervyn Davies, Standard Chartered’s chairman, and Eric Daniels, Lloyds TSB’s chief executive, are among guests invited to the prime minister’s weekend home. Chris Gibson-Smith, the London Stock Exchange chairman, is also attending, along with City minister Lord Myners and Alistair Darling, the chancellor. The lunch is taking place alongside detailed negotiations on the new scheme in the Treasury this weekend, co-ordinated by senior civil servant Tom Scholar. Since the Treasury unveiled its bank rescue in October, it has injected £37 billion into the sector and guaranteed about £100 billion out of a proposed £250 billion of lending under the credit-guarantee scheme. . It will involve creating a so-called “bad bank” to take toxic debt off banks’ books, in line with the Paulson plan in America. The car industry will be helped with, among other things, credit assistance for buyers. Further aid for the banking industry also follows warnings from Britain’s most senior accountants. In a secret meeting with Myners before Christmas, senior partners from KPMG, Deloitte, Price Waterhouse Coopers and Ernst & Young warned they might not be able to sign off the accounts of Britain’s biggest banks. The auditors were not certain they could state that banks and building societies were “going concerns” under the terms of international accounting rules. They warned that they might have to add qualifications to the accounts — with the potential to scare both shareholders and savers. The accountants said they might have to add “emphasis of matter” paragraphs to the accounts, which would draw attention to continuing funding pressures. The rest of corporate Britain is also concerned about auditors questioning accounts as the reporting season begins. “We want auditors to be extremely robust in their assessments of every company’s accounts,” said Michael McKersie at the Association of British Insurers. “But we don’t want the auditors to second-guess the macro-economic environment to the extent where they start adding qualifications to company accounts without due cause.” The government continues to recruit more advisers to help deal with the crisis. Four non-executive directors are this week expected to be appointed to the board of UK Financial Investments, the body set up to manage the taxpayer’s holdings in banks, including Glen Moreno, the chairman of Pearson, the media and education group. Industry is warning that urgent action is needed. Manufacturers say the sector’s downturn will last for another 18 months and will see sound businesses fail in the absence of government help. The Engineering Employers’ Federation will release its annual manufacturing report this week and warn that output will drop by at least another 5% this year and show no recovery until the second half of 2010. It follows official figures on Friday showing manufacturing output falling at its fastest rate since the deep industrial recession in 1981 and down more than 7% on a year ago. The federation will this week urge a six-point plan on the government to save jobs, protect key sectors and preserve supply chains in the wake of the accelerating downturn. “This year was already going to be challenging for manufacturing, but the combination of the global downturn and continued sclerosis in the financial markets means the downturn will now be longer and deeper than expected,” said Steve Radley, the federation’s chief economist. “While reductions in interest rates will kick in at some point, we cannot afford to wait. The unprecedented speed of the downturn since last autumn is hampering companies’ ability to adjust and government must put measures in place as a matter of urgency.” Its proposals include measures to minimise the effect on supply chains if credit insurance is withdrawn or reduced. It also wants the Bank of England to introduce “quantitative easing”, or increasing the money supply, though with caution, as an additional monetary weapon as Bank rate, cut to 1.5% last week, nears zero. The federation also wants specific measures that include more flexible and generous short-time working allowances to enable manufacturers to keep staff; the restoration of empty-property relief, coupled with a 12-month freeze on business rates; and an increase in the annual investment allowance to £250,000, to ease cash-flow problems. No 10 refused to comment on the guest list for the Chequers lunch. Well looks like Brown is having one more roll of the dice to win the election and paying for it by mortgaging all our futures and childrens futures. I am interested to hear peoples opnions on what the result of all these measures being in the next few years. I personally cannot see a return to pre 2007 levels of madness and I think his attempts to get us back to those times or try and pull the economy out of it nose dive will compound our problems. His efforts to restart the mortgage market through government guarantees on MBS will fail as few investors will want to touch UK housing market with a barge pole.Everyone knows how far it is overvalued,how fast it is falling and that unemployment is going to be horrific.Also the amount guaranteed by the goverment is a drop in the ocean compared with the size of the market and is to small to support prices. For the housing market to even stagnate it requires a big jump in approvals which means alot of new entrants onto the housing ladder and the appetite to take on debt is not going to increase while we are seeing unemployment climb and bad economic news reported daily across our screens. Sentiment is the biggest driver of the housing market as well we all know.Fear is now replacing greed. Any QE will go into the black hole. The money printed will be used to zombify unproductive and bankrupt business that should be let go to the wall. If they want printed money to enter the economy they will require people to take on more debt which again will not happen due to sentiment.Tax breaks will be used to pay down debt or be saved. A toxic bank creation scheme? Hmm haven't the American tried that and found they did not have enough money to buy up all the bad debt? The amount of toxic rubbish that they would have to purchase is alot larger than than could afford. All this really ads upto is a huge waste of tax payers money with a debt overhang for years. A collapse in sterling. High inflation on imports and goods generally.Low wage inflation and high unemployment. Oh yes and house prices will continue to fall even in a higher inflation enviroment as wages will stagnate.
  8. I have half my STR fund invested in Index Linked certificates by [email protected] and I plan to by more when the new issue comes out. They earn RPI plus a % on top depending on the issue but best of all its tax free. You can invest upto £15,000 per issue.Their value is locked in each year and they are back by HM Treasury. You need to keep them for at least a year to earn any interest but after the first year they can be cashed in at any point and you will earn the interst accrued. If inflation does take off then they will afford you protection.
  9. Man is a complete ****! Yes lets the solve the problem of borrowing and spending to much by........... er yes holding a gun to the the responsible savers heads and forcing them to spend their funds and borrow aswell. Where does he think the banks are going to get their deposits to lend against? MUPPET! :angry:
  10. Ask the man on the street and most won't know what you are talking about.Most do not know what is going on or the implications. The people that will stop the government are the people buying the government debt and making investment in the UK, hence why they leak it first to the reaction of the markets. If there is no backlash then expect to se it go ahead.
  11. Totally agre. But is this possible? Would'nt it require all banks to fess up which frankly is not going to happen unless the U.S decide to push it? Also if they did fess up to the full extent we might see that the liabilities are far greater than the British tax payer could shoulder thus why they are keepng them hidden and are hanging onto hope.
  12. I think we are being softened for yet more bailouts. The Governement know what is happening to these banks balance sheets. They have people sitting on the boards of these bansk and they have been going through their accounts. They can see the mounting losses and much larger holes in balance sheets than first fessed up. We are being softened up for yet more bailouts.
  13. Here you go old bean http://www.spectator.co.uk/coffeehouse/320...d-bailout.thtml
  14. What do you base the 4-6 months on? How do you know that they have not lost all the money already and are on the verge of collapse again? Darling would not come out and say "well everyone they have lost all your billions that you have borrowed and given to them and they want more so dig deeper"
  15. That would of been money well spent compared with what they have done with it.
  16. Wish you were right but I think it is more likely that they are testing the idea on the money markets to see if they would stomach another bailout. Brown does not give a **** about the country and is prepared to burn it down to get in at through the next election. He should be hung for treason.
  17. Ok but can they really get away with this without total collapse of the currency? If its that easy why has Iceland not turned on the printing press instead of going to the IMF?
  18. So what you are saying is that when we get a gilt buyers strike they will just print up the money to give to the banks?
  19. So Darling is leaking to the press that they prepared to throw more money at the banks to get them lending! WTF is going on! Which is more likely? He is trying to get banks lending again? They have burned through the bailout money already and they do not want to admit it?I am sure with the U.S housing market falls speeding up and ours following that the banks are seeing some very nasty losses.The liabilities that these banks are holding are far bigger than this country can stomach and we are only starting to see job losses. This all this has got me seriously worried. And I am sure when the money markets open on Monday we shall see the pound get another hammering. Do they really think they can keep throwing money at the problem to make it better?FFS please can the UK government get a grip! We are looking more and more Icelandic everyday
  20. 12 months ago we were constantly hearing from our local property experts how well Brighton and Hove was placed. How it would be different here and how prices could only level off. Where are all these experts now? If there was a 3.6% increase it would be all over the front of the Argos. All we get is SILENCE in the face of a collapse in prices! These lagging figures which exclude repos show that there will be blood on the streets 2009/2010. Prices are beyond ridiculous and I am looking forward to them coming back to within a normal 3x earnings range. We have a long long way to go yet so everyone be patient!
  21. This does not surprise me. It's all hot air and lacks credibility. At last maybe the media is waking upto the fact that that this is alot of hot air and has little substance. How can you propose such a plan without talking to the mortgage industry first or have any idea how it will be implemented or who it would qualify! Policy making on the hoof. They probably know the extent of the Halifax falls and what the projected falls are going forward and are panicking. They are running scared and this is designed to be act like a bit of teflon for Brown. It is annoying that borrowed tax payers money is being spent to bolster Browns election prospect with no benefit to anyone :angry:
  22. I like many others on here felt anger when I intially learn't of Gordons latest scheme to help hard working families that cannot keep up with their payments due to the global economic downturn that started in America. This scheme will prove to be just another PR stunt to show how desperate they are to appear to be a "nice Labour" and not "nasty Tories" and also to deflect blame away from the Gordon for the misery and hardship he has caused. This is a classic Gordon Brown tactic to shift the blame away from himself and onto the nasty banks and he will point the finger at the banks for not fully endorsing the spirit of the scheme when the banks cannot fully apply it and repossions escalate next year. The fact of the matter is that banks cannot afford to apply it to the majority of cases but the the great british public will not grasp this for the same reason they cannot grasp why Banks cannot pass rate cuts on. We are heading for deflation in certain ares of the economy.Average wages as employment rises and bonuses are cut. House prices are falling at a record rate.The banks are effectively being asked to take a risk that the level of employment and average wages will be the same or higher after 2 years to support those that have got into trouble.They are being asked to take the risk that those that have lost the house due losing at the end of a huge credit bubble will regain their earning power to support a possible bubble housing repayment. Also the banks are being asked to take the risk that interest rates have not increased to a higher level in 2 years time. All a very big gamble considering what small proportion of loss the Government is preparing to underwrite compared to the loss in house price and the fact that that person will not be maintaining the property further adding to the banks loss. This scheme will be applied in limited cases where the homeowner would normally be allowed a payment holiday e.g someone who has a secondary wage earner in a secure industry,has high equity in the house and has a good credit score with low on no unsecured debt. This scheme designed to grab headlines and when the reality does not match the headlines Mr Brown will point the finger at the nasty Banks.
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