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Everything posted by Optobear

  1. xxxxxxx = the latest plan from DCLG for £400m Just like the fact that housing benefit is a £20bn subsidy from taxpayers to landlords (arguably the least deserving of £20bn), this latest housing initiative is just a £400m bung to the home builders to prevent them from going bust. The £400m just goes to builders - nothing to do with the real issues at all.
  2. They did for Northern Rock - or rather they stepped in and guaranteed all of the UK banks for retail deposits. Problem is they can only do that for personal money held by "ordinary" individuals I'd suspect the commercial world simply has too much on deposit to allow the simple government backing to work. You'll recall that companies and charities lost out (eg Naomi House hospice). But I do think there is no limit to the amount they'd print to avoid a run, problem would be sterling would be toast (or should I say, even more toasted?)
  3. Discussed here in a thread in 2007 http://www.housepricecrash.co.uk/forum/index.php?showtopic=55986&view=findpost&p=770908 Back then the compensation was just over £30k. Lots of discussion then (and that was pre-Northern Rock) - the events of Northern Rock proved that the scheme is useless and unworkable in the form described based on levys on the financial industry. Only way it can operate (and did operate) is by the government simply printing money. Optobear
  4. Maybe just a little late in the evening, but if house prices fall then shouldn't rents be higher than mortgages? Is there some equivalent that says rents are normally lower than mortgage repayments (in a rising market) because the home owner also gets to own the house after 25 years, so they are "better off", while the renter doesn't get that benefit (so perforce needs to pay less for the situation), while in a falling property market, rents ought to rise because the renter doesn't end up with an asset that is worth less, while the owner (with mortgage to fund the purchase), ends up with a depreciated asset. Something a bit like put/call parity, but for rents? maybe just too late in the evening...
  5. This new bout of QE is a response to the almost failed gilt auction on 22nd September http://www.dmo.gov.uk/index.aspx?page=Gilts/Operations_Results They tried to get £4.8bn placed and only got a bid to cover of 1.29 and that is very low by historical standards. Hence there is too little demand for the gilts that are needed to maintain government spending and they needed the BoE to step in, buy up surplus gilts at a premium (by printing money and devaluing savings), and in that way maintain the fiction that the government is just issuing gilts in the normal way... rather than pursuing a Zimbabwean style printing... I hope your comment about QE being a good idea was in jest
  6. Not as good as calling a black day correctly, but I'll claim that one!
  7. Spoof? Surely... This guy? http://bombsite.com/issues/107/articles/3263 The Yes Men http://en.wikipedia.org/wiki/The_Yes_Men
  8. Duke, I thought your post was about the infamous "reverse dutch steamboat", beloved of the daily mash! That would have made for an interesting thread
  9. I think you're forgetting about the financial aid that top US schools offer http://www.harvard-ukadmissions.co.uk/Funding%20and%20financial%20aid The website states that for a family with combined income of £75k it is cheaper to go to Harvard than a UK university in 2012! it is not easy to get in to top US schools either, but certainly worth knowing about for bright kids as an alternative to the Russell group! Optobear
  10. Excellent, I'm paying my landlord about 2.8% of the market price in annual rent. If 1% of that goes on the long term cost, then he is letting me live here at 1.8% pa! Very good, factor in the 3% annualised fall, and I'm well ahead.
  11. Quick thought experiment: What if someone gets the source code, loads it up on a new server, changes the name to Bitcoin2, starts the process... much better to mine Bitcoin2s rather than the originals, easier to get plus they stand to rise more in value... just a minuscule fraction of a cent per Bitcoin2 so worth investing a few dollars in the hope of large return... Of course someone else can set up Bitcoin3 or Bitcoin4, or Bitcoin20million...
  12. Well spotted that man, for example http://markets.ft.com/research/Markets/Bonds But it did provide a good excuse to put the yield curve in the spotlight, and what is shows beyond 6 months is quite surprising, take the FT one (for instance) showing long term rates don't rise too far ... hard to reconcile with immediate hyperinflation... From the BOE http://www.bankofengland.co.uk/statistics/yieldcurve/index.htm The second graph on the BoE is interesting, it shows inflation well outside the mandated target for a decade or more... the markets expect us to inflate the debt away!
  13. Odd isn't it. http://www.reuters.com/article/2011/06/06/us-ecb-rates-idUSTRE7552OX20110606 ECB rate rise postulated in July - I've posted often here stating that the BoE will have no choice but to follow (but probably when both the FED and ECB move up), so FED to go too? But why fall back again...
  14. As a STR I'd like to see some upward action!
  15. http://en.wikipedia.org/wiki/Yield_curve My understanding is that it is the markets instantaneous view on the likely course of future interest rates. It is derived from prices of UK gilts. Normally savers expect a higher return for tieing money up for longer (because of concerns around inflation and uncertainties over future rates). The current inverted yield curve means that depositors are willing to accept lower returns for investing for 1 year compared to 6 months - which is odd. Looking at yield curves is generally a good plan because they can predict recessions (although don't always) and give a guide to what the markets think will happen to interest rates - which directly affect mortgages - so are worth viewing. The UK went seriously inverted before 2007 - signalling that the markets could see the crash coming... why it should invert now is the question?
  16. Very odd bringing a thread back from Nov 2007 (oh remember those days hpc'ers just a month before Applegarth resigned), but the reason to resurrect the dead is that the yield curve is inverted again http://www.yieldcurve.com/marketyieldcurve.asp some link, the UK yield curve drops down 1 year out! Why is that? Is is a dire prognostication regarding sterling? Is it a sense that things are going to get seriously worse for a few months, are the markets really suggesting that rates will go lower still? Is it based on a feeling that no one at all in the UK will want to borrow money in 12 months time (and why not?) so there is no need to pay anything beyond 0.5%? All very odd, maybe someone can explain?
  17. I don't know. It might be good just to leave this thread, encourage it to go viral by posting in other places, then who knows, a google search for that agent might lead directly to this thread - and the curious incident of the disappearing window. Probably wouldn't be good for business for that agent...
  18. Is this an offence? I wonder what trading standards in Esher would make of it? If it were in East Sussex then the guidelines are quite clear: http://www.eastsussex.gov.uk/business/tradingstandards/detail.aspx?ref=122659&class=Eng%3BBusi%3BAdv%3BFT&date=26/06/2010%2000:00:09
  19. Two types of inflation, prices (due to currencies and worldwide demand) and salary. 4-5% on prices - sure - but 4-5% on salaries -and that is what helps erode housing multiples - no, the BoE can't help there. The BOE try to keep up a good front but simply: i) the whole world financial system is still on tranfusions and remains so until base rates move up. ii) the US, France, Germany and China are not caught in a UK/Ireland style property trap, so will (some time soon hopefully) raise rates back to 3-4% iii) the UK is addicted to government based on deficits and we'll have to have base rates of Euro + 0.5% or US +0.5%. iv) so the BoE are impotent, they'll have to follow the others, and that will trash the housing market. Only question is when will rates rise?
  20. Fair point, I was extending the argument somewhat. Some elements of Bitcoin are like CHAPS or BACS, in that they are to do with the process by which transactions are recorded. Neat idea for bitcoin, but irrelevant to their usefulness as a currency or means of exchange. Credit is the key, the amount of physical sterling is minuscule compared to debt based sterling, most of the money is created by borrowing, if (and massive if for bitcoin) it ever gained some traction, then people would need to borrow bitcoins and then spend them, leading to deposits, more borrowing, until hyperinflation. I used Weimar as a proxy for inflation, and you're right money printing was a factor there, but doesn't alter the fact the any debt based currency grows exponentially. Bitcoins (once lent at interest) suffer the same problem as any other paper token. As an example, say that some people have bitcoins and other want to borrow (and by some miracle bitcoins are actually worth something long-term, then it is analogous to gold deposits in banks, you don't actually need to tradfe the gold, you can trade gold ownership certificates provided people trust them. So the 'physical/virtual' bitcoins are all held in UBS and Deutshebank, and you trade the bitcoin ownership certificates printed by UBS and Deutschebank - at interest - with usury - and you're back to inflating paper money. Now bitcoin doesn't need UBS to hold them, but the advantage of UBS holding them for you is that businesses are likely to have more faith in UBS issued bitcoin ownership certificates rather than bitcoins held on a PC or in a cloud of algorithms. So if we gave up sterling and jumped to bitcoin, we'd end up with a piece of paper issued by some bank saying "I promise to pay the bearer on demand the sum of 5 bitcoins"... As I'm trying to indicate, bitcoins are a geeky fad for the "Second life" generation offering an over-simplified panacea to those who blame the government for the failures of the monetary system. Any token based system is doomed to ultimate failure due to usury, it leads to exponential growth in money, and eventual economic collapse.
  21. I think that is a fallacy. The key question is whether you can create a separate contract to lend them to someone at interest independent of bitcoin. So someone with bitcoins offers to lend them to someone, and the borrower agrees that they will pay them back with interest. Unless the bitcoin system prevents that process usury exists and you get inevitable inflation. With currencies that are regulated by government that process is limited by government regulation (requirements to be a licensed bank, hold reserves with central banks). Without those limitations on usury the bitcoins will simply inflate in the same way as money as debt, but with no regulation the inflation would go Weimar... Bitcoins are a clever idea but without an understanding of the money multiplier of usury they will be worthless. Set aside that they won't be adopted, and even if they were they'd be regulated. Another obvious point, although maybe not to bitcoin fans, is we've already got loads of currencies, eg sterling, dollars, gold, picasso painting, model T fords, BP shares, or myriad others, so why bother with bitcoins?
  22. How about a retrospective tax on STR profits? STRs are selfishly failing to reinvest their gains into the housing market - increasing the chances of a fall that hurts the economy. Should a responsible government institute a retrospective wind-fall tax on STR profits? It would simultaneously help reduce the deficit and prop up house prices... for example the tax could hit if you don't buy a house within 24 months of selling - levy a tax of 40% on all of the profits of the housing transactions that led to the STR profit! That would help get things moving!
  23. I can see some people finding themselves up against their visa credit limits, and some might go over (with penalties) that will be interesting!
  24. From a bit of searching it seems that approx 500k people die each year in Britain, around 40k per month. At some point they will exit housing (either in a box, or to a nursing home), and that will free a home. Assume all are couples, then that halves the number, so 20k homes become free per month, and further that only 80% are home owners. That shifts it to 16,000 owned homes per month coming free due to death. So about half of the monthly mortgages.
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