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Guest KingCharles1st

When You Read Stuff Like This- (just Happens To Be The Times)

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Guest KingCharles1st

Well I know I'm stupid, but have finally realised I am obviously so daft with money, that next time I get my pocket money I am going to make sure I give it to the Nurse to look after. I am obviously doing something wrong.

Today's Times

"With house prices also posting a 7.5 per cent recovery since they bottomed out in February, according to Nationwide Building Society figures, British families are — on paper — thousands of pounds better off compared with six months ago but still much worse off than two years ago, before the banking crisis hit."

"Wealth levels — as reflected in house prices and stock market levels — can be an important factor in the economy, boosting confidence among consumers and company directors, which leads to higher spending and greater economic growth."

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Its true.

Just as on the way down the negative feedback causes a death spiral.

On the way you get a positive feedback loop.

The death spiral for house prices was stopped by near 0% interest rates, we were heading for 33 to 50% off peak prices, but the crash stopped at 25% and the momentum is now to the upside.

I suspect August will be another up month in the Nationwide house price index.

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Well I know I'm stupid, but have finally realised I am obviously so daft with money, that next time I get my pocket money I am going to make sure I give it to the Nurse to look after. I am obviously doing something wrong.

Today's Times

"With house prices also posting a 7.5 per cent recovery since they bottomed out in February, according to Nationwide Building Society figures, British families are — on paper — thousands of pounds better off compared with six months ago but still much worse off than two years ago, before the banking crisis hit."

"Wealth levels — as reflected in house prices and stock market levels — can be an important factor in the economy, boosting confidence among consumers and company directors, which leads to higher spending and greater economic growth."

You shoud read this with enthusiasm. It must be true cos otherwise Murdoch's struggling businesses will be screwed. Get out and spend! That is what Rupert wants you to do. He is already planning to charge for internet news and is shutting thelondonpaper. If you don't there will be real trouble. The writer of this piece might be out of a job.

I was just going to say that Mammon is posting and will say it is true, but surprise surprise......he already has!!!! :lol:

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Its true.

Just as on the way down the negative feedback causes a death spiral.

On the way you get a positive feedback loop.

The death spiral for house prices was stopped by near 0% interest rates, we were heading for 33 to 50% off peak prices, but the crash stopped at 25% and the momentum is now to the upside.

I suspect August will be another up month in the Nationwide house price index.

What happens when IRs go back up???? :ph34r:

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Guest KingCharles1st
Its true.

Just as on the way down the negative feedback causes a death spiral.

On the way you get a positive feedback loop.

The death spiral for house prices was stopped by near 0% interest rates, we were heading for 33 to 50% off peak prices, but the crash stopped at 25% and the momentum is now to the upside.

I suspect August will be another up month in the Nationwide house price index.

Maybe somebody needs to do a "FTSE100 vs. Baltic Dry" chart.

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"With house prices also posting a 7.5 per cent recovery since they bottomed out in February, according to Nationwide Building Society figures, British families are — on paper — thousands of pounds better off compared with six months ago but still much worse off than two years ago, before the banking crisis hit."

As usual, more expensive housing is lauded as a good thing. When petrol gets more expensive, it is a bad thing. In reality what they are applauding is that more debt has entered the economy, much of it public debt. If everyone borrows more, under duress or otherwise stuff gets more expensive.

"Wealth levels — as reflected in house prices and stock market levels — can be an important factor in the economy, boosting confidence among consumers and company directors, which leads to higher spending and greater economic growth."

Debt is wealth. Here it is in black and white.

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Its true.

Just as on the way down the negative feedback causes a death spiral.

On the way you get a positive feedback loop.

No actually it isn't true - certainly not to the degree often claimed

The often touted 'wealth effect' of rising house prices is exactly offset by an equal and opposite rising 'obligation effect'. With the real estate market, the increasing wealth of one group comes at the expense of counterbalancing increasing constriction, costs, risk and debt for another.

Edited by Stars

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"Wealth levels — as reflected in house prices and stock market levels — can be an important factor in the economy, boosting confidence among consumers and company directors, which leads to higher spending and greater economic growth."

Debt is wealth. Here it is in black and white.

And still some people doubt the truth.

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And still some people doubt the truth.

IRR, you more than most will realise how hard it has become to parody the current economic doctrine that "debt is wealth".

What once appeared absurd is now openly discussed as truth. I had a few chats at a cricket match yesterday with people who on the the whole were all worth plenty of money and every one of then believed things were coming round. A commercial property agent told me it was dead in 1st quarter but now looking ok again. He asked me what I thought and when I told him I thought the whole thing was f*cked and he'd struggle to give it away in due course he actually smiled a bit ruefully.

The bit that stmps everyone is when you ask them exactly what bit of real wealth creation is getting better, rather than people are just being induced to go back into further debt.

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The bit that stmps everyone is when you ask them exactly what bit of real wealth creation is getting better, rather than people are just being induced to go back into further debt.

I think this is when people apply muzzy logic and decide that such matters aren't their problem, "it'll just happen."

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The bit that stmps everyone is when you ask them exactly what bit of real wealth creation is getting better, rather than people are just being induced to go back into further debt.
Hopes for a rapid recovery grew yesterday after the stock market surged and investors celebrated the biggest rally in world share prices for 50 years.

Clearly the wealth created in share prices is doing very well at the moment, soon it will have recovered to pre crash levels and then we'll have real wealth creation. :ph34r:

Just wait and see.

The markets are adjusting to the doublethink paradigm. Once this efficient thought correction process has adjusted reality the truth will be there for all to see.

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seasy

QE dun it.

QE is doin it

QE will save us all.

clever Merv.

next the CEBR will be proposing house prices at £300,000 average by 2012.

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Wealth levels — as reflected in house prices and stock market levels

Contradiction in terms here, owning bubble assets doesn't make you wealthy.

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Contradiction in terms here, owning bubble assets doesn't make you wealthy.

I would disagree, it depends on societies prevailing viewpoint at the time. That's what can define wealth.

Plus many banks where quite prepared to accept the above as "wealth" and collateral.

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I think this is when people apply muzzy logic and decide that such matters aren't their problem, "it'll just happen."

The Tommy Cooper theory of economics, according to which the recovery will happen:

tommycooper.jpg

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I would disagree, it depends on societies prevailing viewpoint at the time. That's what can define wealth.

Plus many banks where quite prepared to accept the above as "wealth" and collateral.

one house sale at 1% above the average increases UK wealth by £600,000,000,000.07. dontchaknow.

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Maybe somebody needs to do a "FTSE100 vs. Baltic Dry" chart.

Not the FTSE as requested but BDI vs SP500 indicates that claims of economic recovery and growth are just that: claims, NOT facts.

bdi_sp.gif

post-13113-1251186198_thumb.png

Edited by dammfoolman

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The bit that stumps everyone is when you ask them exactly what bit of real wealth creation is getting better, rather than people are just being induced to go back into further debt.

Exactly! Lots of people I know seem to be treat the recession like some bad weather; after a few days the sun "automatically" comes out.

Structurally this recession is more like the onset of winter than a short, sharp April shower.

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http://news.bbc.co.uk/1/hi/business/8219500.stm

For the six months to June, Persimmon reported a pre-tax post-exceptional profit of £9.8m compared with a profit of £36.9m last year.

The figure was boosted by a gain of £27.9m after it wrote up the value of its assets. Stripping out this gain, the company made a £18.1m loss.

I cant quite grasp this. Persimmon have managed to turn a loss of £18m into a profit of of £9.8m by writing up the value of its assets? How is this a profit if these assets have not yet been realised?

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Could be many years - look at Japan

Yes, that would be quite a torture. I'm personally amazed that many in debt think of this as a lesser evil if not a feast. For if the low rates are determined by market forces, it simply says nobody wants to borrow and everyone's paying back. Everything that was driven by easy credit will be falling and unemployment rising. Alternatively, if the rates are dictated artificially low, they will be forced to hike them to defend the ccy eventually, and again many go bust. There is no utopian Goldilocks scenario possible in the medium term. If sustainable growth is the eventual target, savings must be rebuilt. No way around it.

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Guest KingCharles1st
Not the FTSE as requested but BDI vs SP500 indicates that claims of economic recovery and growth are just that: claims, NOT facts.

bdi_sp.gif

Quite a short timescale, but it does indicate that BDI tends to lag, yet although more was being shipped at one point than market investors cared for. However if there is a mini BDI boom on the strength of this false recovery, it is just as likely there will be a huge correction around the end of the year, after Christmas maybe?

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I would have thought IRs will go back up pretty much a month or two after Labour lose the next election this autumn or June.

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