notthereyet Posted January 18, 2009 Share Posted January 18, 2009 I am not expecting 80% falls in UK house prices.Mind you, I wasn't expecting 90% falls in bank share prices either. UK falls to 50% from Oct 2007 then 7 years of static prices +or- a couple of percent flutuations during that period. Quote Link to comment Share on other sites More sharing options...
LuckyOne Posted January 18, 2009 Share Posted January 18, 2009 The wonders of leverage dear boy, leverage. That is true. I was always under the impression that household leverage was closer to banking leverage though ...... I expected houses to drop more shaprly relative to banks than they have ..... I guess that only time will tell whether the relative drop is about right or whether houses will catch up more ..... Quote Link to comment Share on other sites More sharing options...
eric pebble Posted January 19, 2009 Author Share Posted January 19, 2009 with the high gearing of the banks on the MBSs, it's not hard to see how the banks are wiped out on even small falls in house value.there were even many cases of the same security being leveraged multiple times. it doesn't take much drop to kill you when you are geared like that. imagine you promise the same item to 5 different people. if it goes down by half, and you are responsible to make good the difference like the banks were, you are now down two hundred fifty percent, not just fifty percent. So true... Quote Link to comment Share on other sites More sharing options...
Guest Steve Cook Posted January 19, 2009 Share Posted January 19, 2009 (edited) I don't think even we saw 80% coming! I did.... Though, quantitative easing could put the brakes on that one, at least nominally. However, in real terms, I still think 70+% off peak Edited January 19, 2009 by Steve Cook Quote Link to comment Share on other sites More sharing options...
RufflesTheGuineaPig Posted January 19, 2009 Share Posted January 19, 2009 I did.... Though, quantitative easing could put the brakes on that one, at least nominally. However, in real terms, I still think 70+% off peak No quantitative easing in ireland. No printy printy euro! Quote Link to comment Share on other sites More sharing options...
renterbob Posted January 19, 2009 Share Posted January 19, 2009 I don't think even we saw 80% coming! I did. And I see 90% too. Quote Link to comment Share on other sites More sharing options...
renterbob Posted January 19, 2009 Share Posted January 19, 2009 And all it would have taken to stop this was the application of an extraordinarily simple formula:Lend no more than 3.5 x REAL, TRUTHFUL SALARY. And so, because they didn't do this - they unleashed the World's Biggest Ever Ponzi/Pyramid Scam...... But Eric that should be the absolute maximum, ideally the average house price should be approx 2.5x salary of one earner....50k tops for a really good home ina decent area...the average new build 2 bed flat should be no more than 18k. That is the only way to get a sustainable market. Quote Link to comment Share on other sites More sharing options...
Guest Steve Cook Posted January 19, 2009 Share Posted January 19, 2009 I did.And I see 90% too. I see dead people Quote Link to comment Share on other sites More sharing options...
Limpet Posted January 19, 2009 Share Posted January 19, 2009 I see dead people I can think of a couple I`d like to see dead Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.