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Lse Lecture - Housing Markets And The Global Financial Crisis

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I thought I would share with you a recent London School of Economics podcast. It's a recording of an LSE public lecture titled - Housing Markets and the Global Financial Crisis.

mp3 podcast download

Housing Markets and the Global Financial Crisis

Speakers: Dr André Broome, Professor Herman Schwartz, Professor Leonard Seabrooke, Professor Mat Watson

Chair: Dr Jeffrey Chwieroth

This event was recorded on 13 July 2009 in Hong Kong Theatre, Clement House

Residential property is the single largest asset in people's everyday lives and its associated mortgage debt constitutes one of the biggest financial assets in most economies. Yet political economy largely ignores both. We know that the kind of housing people occupy and their level of debt affects their preferences for the level of public spending, taxation, and inflation. Housing is intimately tied to welfare systems and can be seen as a social right or as a means to acquire wealth over one's life. Housing systems are built from political struggles over the distribution of welfare and wealth. The organization and transformation of housing finance systems affects both national economies and international financial stability. This public event provides a brief presentation and a discussion of these concerns.

Edited by monstermunch

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Its taken a while to listen to all this but I've been through it a couple of times now. Topic had already dropped down to p4 in the meantime.

Mostly, its a review of what happened rather than any predicitions. What is interesting is that there is no bull/bear arguments, just a review of how we got into this state with presenters covering the US, UK, New Zealand and Spain.

A few interesting points.

- MEW paid for GDP, accounting for all US growth since the 90's

- Gordon Browns approval rating is strongly correlated to UK houses prices. House prices are a political tool (particularly so in the US). Gordon made no attempt to address the housing market even when it was getting out of control, "benign neglect"

- The downturn was inevitable [funny how they didn't warn about it in advance]

- Low supply is the only thing supporting house prices [guess what happens now unemployment kicks in]

There is a distinct lack of predictions but since no MEW means no GDP growth and I think MEW is going negative for years, the economy has no growth prospects for several years.

Although none of this is news to HPC'rs, the value in listening is to get an understanding of how the academics are thinking about the housing market.

VMR.

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- Low supply is the only thing supporting house prices [guess what happens now unemployment kicks in]

Although none of this is news to HPC'rs, the value in listening is to get an understanding of how the academics are thinking about the housing market.

VMR.

The academics are way behind the curve.

I agree there is/will be little demand for housing (for those viewing property as an asset investment). People are waiting for house prices to fall. Banks are reluctant to lend and are now asking for 20 to 25% deposits. The number of mortgage products is falling rapidly. Unemployment and credit card debt will be the next critical factors.

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