winkie Posted August 6, 2009 Share Posted August 6, 2009 Ill repeat what Ive being saying about this today.we have had a bubble in property caused by borrowing. all bubbles are caused by A: a fuel and B: people People are generally predictable. People like bubbles....they think they can take advantage of them. when the bubble bursts, people are still thinking in bubble mode. the bursting will slow at some stage, it always does. the people in bubble mode see the return of the market they thought they controlled. They feel vindicated again. time to get back in or they will miss out, or they missed out last time, wont catch me again. course, this phenomenum has a name. why does it have a name....because it always happens...always. Its called a bull trap. we are in such a bull trap. people are going to get caught in the trap. its only human to do so. and one more thing.....Nulab know all about this phenomenum...make no mistake....they knew about it and planned to take advantage of it as a failing economy means loss at the GE for them. They know exactly what is happening, they know what a pig's ear they have made of the financial stability of our country, they have tried everything to undo their doing...creating phantom money is their last and only option, the option that will devalue the hard work that the prudent have saved invested for their future. Makes you feel like taking their free money and running. Quote Link to comment Share on other sites More sharing options...
Timm Posted August 6, 2009 Share Posted August 6, 2009 that is what i fear, typically many may resign themselves that the govt "will never let it happen" and buy and then lose their money/neg equity. a man with Brown's selfish ambition is a dangerous opponent, but certainly not likely to be re-elected even if he pulls some fiscal gift out of the hat just before the election, which i wouldnt put past him as he seems to not give a fig how deep a hole he digs for future administrations and the public as long as he gets enough votes to return to number 10. did i mention he is also sadly deluded, he stands no chance whatsoever and i mean no chance. The funny thing is, this is exactly what I would be trying to encourage if I had been dropped into Downing Street last year. Deflation by deleverage is much less painfull than deflation by default. Options: 1. Borrowers lose jobs, default on debts, banks go bust, savers discover savings have all gone, civil unrest, country collapses. 2. People who think they have money buy from people who have debt. Less "money" in system. Assets then fall in value. Buyers thinks they made a bad call but still have asset. Sellers have no asset but thinks they made a good deal by selling before fall. Bank has no income but no non-performing loan. Country in depression, but avoids total collapse. Quote Link to comment Share on other sites More sharing options...
Mugwump Boy Posted August 6, 2009 Share Posted August 6, 2009 i agree i'm waiting just like you and know of a few others with the same idea +1 In the meantime, though, aren't you worried about holding cash? That's the only thing that's making me impatient to buy three years after I STR... Quote Link to comment Share on other sites More sharing options...
Democorruptcy Posted August 6, 2009 Share Posted August 6, 2009 Everybody keeps saying the housing bubble was caused by reckless credit. I agree to a point but think the other assist was wage inflation at the top of the market feeding down. After Lehman's collapse the city boys and banksters might have thought the gravy train was going to slow down and this is why house sales and prices took such a dive around the end of last year - because high end sales dried up. However by spring it was obvious that the gravy train is going to speed along. Nothing at all is being done to stop fat cat pay and bonuses at the top of the market. Now if a city boy or bankster in London or Edinburgh pays over the odds for for a house because they have money coming out of their ears, this frees up the person they bought from to move, possibly out of the financial areas to purchase perhaps with 100% cash. I can't see somewhere like industrial up north being their next destination more like some leafy suburb or rural get away from it all type area. Therefore some areas will struggle but other areas will do better as the the gap between rich and poor widens. Quote Link to comment Share on other sites More sharing options...
jaydee Posted August 6, 2009 Share Posted August 6, 2009 It has been different this time hasn't it.They have played the longest of long games using every twist and turn at their disposal, indebting the country truly horrifcally to either buy a few more months of pseudo boom or an election chance. I dont see how mega debt can lead to sustainable boom and rebirth myself, its a real moronic non-solution imo. So...as over-priced as property seems, have we either just witnessed actual hyperinflation for real with property incredibly becoming "worth" what the media and VIs now try to get for it (ie making a bubble price the hard to stomach norm) or are we buying because they are deliberately scaring people out of holding fiat [paper money, Mr Newbie] with their QE and shall we say "interesting solvency issues" re the banking system or are we buying because the herd SEEMS to be. Will property prices only actually reflect any kind of sanity once the last pessimistic sideliner turns bull and commits to a mortgage or spends their STR fund etc? Is that the trap awaiting us? Is this how it plays out? And if that bubble like price becomes the norm, surely wages have to double or there can be no buyers? And if wages dont double then you have to keep permanently high multiples and permanently very low interest rates and enslave people to debt for decades. Or...? edit - out of holding fiat, oops / bubble price Or.... because most people aren't very bright and take comfort from collective action - the herding instinct - a need to be affiliated. As surely as night follows day - the same stupidity that was manipulated by the financial services sector, the media and the EA's to create the recent bubble - will not and cannot go away - it will resurface as it appears to now - and accelerated by fear - will give property it's artificial - and perhaps very short lived boost - our politicians and other parasites depend on it. Some would argue our whole economy depends on it - shocking but there it is. IQ distribution for the white USA population - as per Wikipedia: - 5% > 125 IQ 20% 110-125 50% 90 -110 20% 75 -90 5% < 75 We are all truly and irrevocably bound to the decision making of the majority - a thick majority - and also perhaps to the ability of a relatively tiny but bright minority to exploit the hapless herd. Quote Link to comment Share on other sites More sharing options...
grumpy-old-man-returns Posted August 6, 2009 Share Posted August 6, 2009 Back when I joined this forum, people would often say the market would collapse "when the last bear turns bull". That is making more sense now than it did back then, but people don't say it so much. Funny old world. some of us still think it though. How many realistic comments would you like me put on this site. I said only the other day to the non-parity-pound VI group, that I feel I am in the right camp when there's only a handful of us. (generically speaking of course). I notice they have been pretty quiet today. I haven't even rescued the 2 threads & said anything......you know why.....because we are all going to lose to a certain extent. that great poster Pluto had a great quote (the one from the infamous Gold Thread), but I can't quite remember it. Someone has it on their sig iirc. Quote Link to comment Share on other sites More sharing options...
Georgia O'Keeffe Posted August 6, 2009 Share Posted August 6, 2009 (edited) Are We All Going To Buy Property Now (those That Can Afford It)?Clearly a few are being duped by the relentless media spin, but I have never been more relaxed about staying out of the housing market. I sleep well at night and wake up with a smile on my face. If I were to take three or four hundred grand out of the bank and buy a house, in today's market, I suspect I'd become a nervous wreck. yep, with you on that one, im looking to buy a place in the UK and it really doesnt bother me how much ramping goes on in the media as firstly the media are always without fail on the wrong side of the market regards sentiment, secondly it really doesnt bother me whether prices rise a million percent in the next 12 months or so because i made a decision when it started falling that i wouldnt buy before end 2012. I think some on this site are to easily led by the media sentiment and month to month movements be they up or down Edited August 6, 2009 by Tamara De Lempicka Quote Link to comment Share on other sites More sharing options...
Y-QUERK Posted August 6, 2009 Share Posted August 6, 2009 Yes otherwise i'll be priced out forever. Quote Link to comment Share on other sites More sharing options...
Jabberwocky Posted August 6, 2009 Share Posted August 6, 2009 Or.... because most people aren't very bright and take comfort from collective action - the herding instinct - a need to be affiliated. As surely as night follows day - the same stupidity that was manipulated by the financial services sector, the media and the EA's to create the recent bubble - will not and cannot go away - it will resurface as it appears to now - and accelerated by fear - will give property it's artificial - and perhaps very short lived boost - our politicians and other parasites depend on it. Some would argue our whole economy depends on it - shocking but there it is.IQ distribution for the white USA population - as per Wikipedia: - 5% > 125 IQ 20% 110-125 50% 90 -110 20% 75 -90 5% < 75 We are all truly and irrevocably bound to the decision making of the majority - a thick majority - and also perhaps to the ability of a relatively tiny but bright minority to exploit the hapless herd. +1. I salute you Jaydee. Quote Link to comment Share on other sites More sharing options...
MoonLady Posted August 6, 2009 Share Posted August 6, 2009 I remember the last recession and those that did exactly that, people were buying disused public toilets and converting them to houses FFS! When interest rates doubled many wound up homeless being dumped on dire council estates or really grotty bed and breakfast places. At least when you actively rent you choose where you live. House purchase is a fairly major undertaking, better to make a considered purchase than rush in and deeply regret. True. ML Quote Link to comment Share on other sites More sharing options...
Kazuya Posted August 6, 2009 Share Posted August 6, 2009 (edited) yep, with you on that one, im looking to buy a place in the UK and it really doesnt bother me how much ramping goes on in the media as firstly the media are always without fail on the wrong side of the market regards sentiment, secondly it really doesnt bother me whether prices rise a million percent in the next 12 months or so because i made a decision when it started falling that i wouldnt buy before end 2012.I think some on this site are to easily led by the media sentiment and month to month movements be they up or down Not everyone can wait till 2013 to buy though. I intend to buy next year if I get a good deal or in 2011, the very latest I'm willing to wait. I'm all cash. Edited August 6, 2009 by Kazuya Quote Link to comment Share on other sites More sharing options...
Jack2 Posted August 6, 2009 Share Posted August 6, 2009 I ain't buying. The only thing I'm thinking of buying is a tent and going off round Europe in my car. Wise man. Only one life. Quote Link to comment Share on other sites More sharing options...
Stars Posted August 6, 2009 Share Posted August 6, 2009 Wise man. Only one life. And in the uk you have to pay dearly to get access to it. Quote Link to comment Share on other sites More sharing options...
BecksMyCat Posted August 6, 2009 Share Posted August 6, 2009 But, if there is fuel and people, why do you conclude the bubble will fail? Well, try and find some examples of bubbles that never fail. Quote Link to comment Share on other sites More sharing options...
loginandtonic Posted October 20, 2009 Author Share Posted October 20, 2009 bump from aug 6 so is this the final trap for bears turning bull or has the boom got legs yet again just like after the IR cut in 2005 all over again? sold boards galore around me although a few more are now coming on for sale tempted by the solds around them. how long can this last? is there a rush for property now before the fsa tightens the regs? Quote Link to comment Share on other sites More sharing options...
loginandtonic Posted October 20, 2009 Author Share Posted October 20, 2009 bump from aug 6 so is this the final trap for bears turning bull or has the boom got legs yet again just like after the IR cut in 2005 all over again? sold boards galore around me although a few more are now coming on for sale tempted by the solds around them. how long can this last? is there a rush for property now before the fsa tightens the regs? Quote Link to comment Share on other sites More sharing options...
MrPants Posted October 20, 2009 Share Posted October 20, 2009 I hate to say it but the inflationistas seem to have it. I've been waiting for the bull trap to end but it goes on and on. Oil, commidities and stocks rise. My interest rate fixes expire within weeks. QE and zero interest rates seem to have changed the game, much to my annoyance. If things don't start to swing back soon I'll be buying. I may even split split my deposit and buy two places at 25% deposit rather than one at 50%, load up with debt and await inflation. Quote Link to comment Share on other sites More sharing options...
twatmangle Posted October 20, 2009 Share Posted October 20, 2009 (edited) bump from aug 6 so is this the final trap for bears turning bull or has the boom got legs yet again just like after the IR cut in 2005 all over again? sold boards galore around me although a few more are now coming on for sale tempted by the solds around them. how long can this last? is there a rush for property now before the fsa tightens the regs? Very interesting to read all of these posts from a few months ago. What I can't 't understand though, is why people who rent seem to think that it's ok for them to call cash buyers stupid. It's up to them what they do with their money, right? One person has a couple of hundred grand in the bank and is contemplating buying a home, the other lives in one room, has his name on his milk bottle, and keeps his toothpaste in his locked room in case his house mates use it. Who's the stupid one? Edited October 20, 2009 by twatmangle Quote Link to comment Share on other sites More sharing options...
loginandtonic Posted October 20, 2009 Author Share Posted October 20, 2009 thx for today's posts i think most of us have a sneaky suspicion that just when we buy the turn will come, its almost a deliberate squeeze and we find ourselves the target prey some or all of the time. I just wonder, where has the money come from to buy these properties? When I raised this question with a friend, he said the money's not out there, doesn't matter how low IRs go, houses wont sell. But they have. where did the dosh come from if mortgges are so few? Quote Link to comment Share on other sites More sharing options...
MrPants Posted October 20, 2009 Share Posted October 20, 2009 I just wonder, where has the money come from to buy these properties? When I raised this question with a friend, he said the money's not out there, doesn't matter how low IRs go, houses wont sell. But they have. where did the dosh come from if mortgges are so few? Growing inequalities of income and wealth? Maybe first time buyers really aren't needed anymore as there are sufficient wealthy cash buyers (especially those who already owned before the boom) to buy these properties and rent them them out to a class of people who are no longer rich enough to ever buy. Quote Link to comment Share on other sites More sharing options...
loginandtonic Posted October 20, 2009 Author Share Posted October 20, 2009 Growing inequalities of income and wealth? Maybe first time buyers really aren't needed anymore as there are sufficient wealthy cash buyers (especially those who already owned before the boom) to buy these properties and rent them them out to a class of people who are no longer rich enough to ever buy. that'd be very Nu-Labour i always thought watched/anticipated pots seldom boil - it boiled a little but not enough to be the real deal, i have a nasty feeling the real total and utter house price crash will come when many of us have given up and bought, but frankly few can go on and on waiting if they have money they are fearful of losing to inflation, or unstable banks. nasty little corner brown backed everyone into, and i said as much a while ago. not that i anticipated this level of sales on the rebound, this is (probably) a new bubble beyond brown's wildest wet dreams - all the more for him to ponder when he puts his knickers in the box and leaves number 10 on GE day+1 Quote Link to comment Share on other sites More sharing options...
loginandtonic Posted October 20, 2009 Author Share Posted October 20, 2009 (edited) I'm not ready to buy. Mainly because I couldn't buy the place I'm renting and it suits me and my family perfectly right now. But on the more general financial front my view is as follows: With rates at such low levels asset bubbles can quickly materialise. All it needs is a trend and people with a frame of mind that the trend will persist - and assuming sufficient fuel can be thrown on the fire in the form of money. The situation in the country is now I believe to be extremely volatile. These are NOT NORMAL TIMES. Firstly I think there are asset classes that will vastly outperform property in the near term. Particularly as they may not rely on so much credit as property. These asset classes are far more liquid both in terms of being able to get in and out and the costs of so doing are far lower. And in the final event, if you want to abandon the currency completely, you are able to do so. In the final analysis - I'm not scared of being 'priced out' in the future as I still think I will be able to do better than if I were in property. good post, thx. i am thinking of going abroad, but perhaps otherwise i might've been clever/stupid enough to buy in feb or march. if it is 2005/6 again + goes on + on, then will prices correct at the next crash back to 07 prices or 05 prices or where? this is the question. its bubble upon bubble. but the bubble blowers have control right now. had i have bought into the area i am now in, i would be crying in my beer, as i hate the whole town. as i'm renting i can get out soon. a big comes to my face when i remember that. Edited October 20, 2009 by loginandtonic Quote Link to comment Share on other sites More sharing options...
Blue Nose Bear Posted October 20, 2009 Share Posted October 20, 2009 God I wish I could say the same, three weeks ago lost out on a bungalow that needed quite a bit of work but the figures stacked up for me and it would have put an end to renting which I don't like and I feel I could have got on with my life. Now my husband is ranting every day at the spin in the news and it's getting harder to hold of buying 'anything will do''. Don't know how much longer my nerves can stand this. ML Go to this link, alraedy on the home page Print it off, sit him down and make him read it at least twice. http://www.youmove.co.uk/property-news-article.asp?c=mb3ljz&article=a_house_price_crash_in_2010_and_a_boom_in_2013? Most sense I've read so far. AP Quote Link to comment Share on other sites More sharing options...
Blue Nose Bear Posted October 20, 2009 Share Posted October 20, 2009 I hate to say it but the inflationistas seem to have it. I've been waiting for the bull trap to end but it goes on and on. Oil, commidities and stocks rise. My interest rate fixes expire within weeks. QE and zero interest rates seem to have changed the game, much to my annoyance. If things don't start to swing back soon I'll be buying. I may even split split my deposit and buy two places at 25% deposit rather than one at 50%, load up with debt and await inflation. Bigger the Bubble Bigger the Bull trap Bigger the second dip Bring it ON!!! Quote Link to comment Share on other sites More sharing options...
right_freds_dead Posted October 20, 2009 Share Posted October 20, 2009 Bigger the Bubble Bigger the Bull trap Bigger the second dip Bring it ON!!! but any canny investor knows that the crash has been and gone. london prices are now soaring again and uk wide rightmove are reporting a 2.8% in house prices. the CML are also backing this up reporting a healthy increase in mortgage applications for the 1/4. with this in mind it seems investing in bricks and mortar is as popular as ever and ooks set to continue for the forseable future. Quote Link to comment Share on other sites More sharing options...
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