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See how much dirty money there is piling into central London!

hpi_report_rbkc.png

(from landregistry.gov.uk)

Some of this money must have ended up in the real economy. Are we being subsidised by inflows of dirty money? Nice work if you can get it. Who are they going to kneecap after the crash?

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Very good. I think the link goes something like this...if Bank rate is too low the increased borrowing will create demand that cannot be met by the domestic economy and we suck in imports. Of course our trade deficit also results in surpluses of other countries that are looking to park and earn a yield on...so it gets sucked back in by the activities of the banks who borrow from the money markets to satisfy credit demand primarily amongst mortgage customers.

The graph is a huge failure of the monetary authorities - the Bank and the government who set the rules.

Yeah I'm particularly interested in the Chicken or the Egg element of this. I'm inclined to think that because China et al started trading with the West, their low cost economies meant it made sense to import goods and services from there. This meant they suddenly had lots of USD flowing into their countries. And these were countries that didn't have a reliable financial infrastructure in which to safely invest that money. Hence they turned to the West.

This meant there was a large demand for Western government gilts, meaning we could borrow and spend on public infrastructure. Not wanting to miss out on this new demand, private Western banks devised lots of new financial products which they fraudulently rated as triple A, selling them on to the overseas investors looking for a safe haven (!). This demand in turn allowed the banks to lend to Tom, Dick and Harry at 125% LTV, safe in the knowledge that the dodgy loans wouldn't be sitting on their books for long.

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Chart suggesting that countries running large trade deficits experienced the largest increase in house prices:

20110310Sa1.png

Source >

Very interesting. Thanks for that.

Historical data on the issue, trade deficits: LINK: http://www.mckinsey.com/Insights/MGI/Research/Productivity_Competitiveness_and_Growth/~/media/4EE742F3B8B3470594A652DF07528151.ashx

( I couldn't post this image here. )

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  • 2 weeks later...

The salaries of people in their twenties has flat lined for a decade and for the first time fallen below those of people in their sixties.

2m6q13b.jpg

1999

Introduction of the minimum wage - interestingly correlates with the stagnation of incomes in the 20s.

Is nobody "learning how to work" any more?

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The salaries of people in their twenties has flat lined for a decade and for the first time fallen below those of people in their sixties.

2m6q13b.jpg

I think that well shows the failure of sending everyone to university. Given most graduate by 21/22, you would expect the next 8/9 years of higher earning power to easily make up for 1/2 years of their 20s spent not earning at university.

In fact, the opposite is true. Whereas their income growth kept up in past decades which older groups, it has stagnated since the policy of sending everyone to university to get any degree in any goddamn subject was instigated.

Not the only reason, obviously - the hoardes of mostly young eastern euros has probably depressed wages in that age group more than any other.

Turkeys voting for christmas comes to mind. The young are probably the most likely to vote for those very same left wing policies that have impoverished them more than any other age group.

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So sad but true. I constantly meet lovely young idealistic people who mouth left-wing platitudes that have been brainwashed into them, without a glimmer of understanding of the evil reality of the state and how it really "feels" about individuals like them.

You don't meet private sector e'ees whose real wages have been falling/stagnating since Reagan/Thatcher's WTO globalisation?

Have to call you out on that one Durch, sorry mate.

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They're physical trade aren't they?

I note the inclusion of 2.0% diamonds - I think that is more like they came in and went out again.

I also note 0.95% phones...again this could simply be carousel fraud.

EDIT: My point being these are gross. For instance 'cars'...we could net the import of engines and steel off against this potentially to get a better picture.

You can do net exports at the link along with gross/net imports and a bunch of other stuff. I just stuck the UK up as an example. I suppose it still might be crude, but I thought it gives an interesting insight.

Edit: the site appears to work best in Chrome

Edited by FaFa!
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Proportion of all homes delivered by self build, by country:

blogbarchart(1).jpg

"in most western nations self-build accounts for just over half of all new homes, while in the UK the figure is just 15%"

Source: http://www.homebuilding.co.uk/community/blogs/spec-housebuilders-are-unique-to-the-uk

Original source, Gov. PDF, page 14: http://www.communities.gov.uk/documents/housing/pdf/2033676.pdf

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Proportion of all homes delivered by self build, by country:

blogbarchart(1).jpg

"in most western nations self-build accounts for just over half of all new homes, while in the UK the figure is just 15%"

Source: http://www.homebuilding.co.uk/community/blogs/spec-housebuilders-are-unique-to-the-uk

Original source, Gov. PDF, page 14: http://www.communities.gov.uk/documents/housing/pdf/2033676.pdf

It is the land issue in this country, plus we have turned large parts of the UK into national parks where only the privileged get to build.

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80-90% off peak?

but but shurely,the FTSE will be immune?

Maybe the FTSE is more diversified/globalized - i guess it didnt fall to about 1500 like the greek index in 2003. Nonetheless it fell from 7000 to 3300, so if it followed a similar trajectory as it did in 2003 as Greece has this time it would likely fall 60-70% from its 2006/7 highs, down to 2000-2500.

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