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Wave 2 Of Credit Crunch Starts This Week.


Gman

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HOLA441
Get ready for the biggest tax and cut you have ever seen.

And you said all the entertainment was behind us!

The tax and cut is when the fun really begins IMHO. The government is crowing about us being out of recession, but it hasn't even started in earnest yet. The first two years of the next parliament is going to be very interesting.

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HOLA442
Spending our way back to a budgetary surplus?

If this deficit is not contracting dramatically 18 months into a tory government, the UK will be down rated, sterling will take a tumble, and the debt burden will get even heavier.

Get ready for the biggest tax and cut you have ever seen.

budget surplus would indicate a private sector that is spending, or atleast taking on a tonne of debt.

If the deficit IS contracting as dramatically as you say by the time the tories are 18 months in, we're most definitely back on the rollercoaster we hoped the GFC would kick us off.

i've no doubt the intention is to lay the ground for what will be peddled as 'required' tax increases and spending cuts [except elf and education ofcourse] but whether they'll actually be able to do that, and whether the private sector is in any kind of state to allow them to do that is anyone's guess.

18 months doesn't sound overly optimistic as a prediction. But by then maybe everyone will have forgotten what the big deal was about with running large deficits. Just like we've forgotten what the big deal was with securitization, too big to fail banks and moral hazard from earlier in the year.

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HOLA443
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HOLA444
Spending our way back to a budgetary surplus?

If this deficit is not contracting dramatically 18 months into a tory government, the UK will be down rated, sterling will take a tumble, and the debt burden will get even heavier.

Get ready for the biggest tax and cut you have ever seen.

A government could stimulate a great deal of new production with a modest outlay if:

  1. The people who receive this money then spend most on consumption goods and save the rest.

  2. This extra spending allows businesses to hire more people and pay them, which in turn allows a further increase consumer spending.

QE, doing none of this, its sitting in the banks propping up balance sheets.

business are not getting the loans they "need" they are laying off. the multiplier is not working.

and whatever extra acitivity it does generate, is going to be removed by taxes in short order...petrol up 2p ( 12P per gallon) today, VAT back in January, and 150bn in deficit to pay for next year.

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HOLA445
Huge taxes, culling the public sector, and reducing government spending. How will this not lead to a dramatic crash, and rather a gentle slide?

that's why it probably won't happen as quickly as some will like. Inspite of what the tories say.

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HOLA446
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HOLA447
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HOLA448
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HOLA449
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HOLA4410
So we are not bankrupt?

countries cant of course declare bankruptcy, all they need do is print, or default, but the point was that the fix needs to be applied, not faffed about with and kicking the can for months on end.

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HOLA4411
I think we have quite a big of fun and games to go.

The main one I'm waiting for is for inflation to start climbing. That'll be funny, watching them make the case for keeping interest rates at 0.5 percent, and printing some mo' money when CPI is going past 3 percent.

:lol::lol::lol:

This is going to be awful. The day is at hand where everytime we go to the supermarket, the prices will have changed. I would hate to be trying to buy my precious metals at that stage :lol:

This deflation nonsense is all great sport, but it is a ludicrous fantasy. Fiat currency has NEVER before in history gone UP in value. NEVER EVER EVER absolutely NEVER.

Take a percentage off the top of your portfolio to trade with - have fun, but do not be foolish with your family's net worth. Get it safe today and DO NOT ****** around!

Edited by Where is my pen?
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HOLA4412
I guess this might not turn Japanese. They didn't have foreign powers holding most of their debt. And the Chinese may have long term geopolitical interests that will trump the value of their dollar holdings. The DPJ are an unknown as well

on the US front, banks are still marking assets to model, the Fed is trying to prevent a full audit and Paulson may end up indicted for lying to Congress

Too many unknowns to rule out another crash IMO

http://market-ticker.org/

Watch the above - six minutes and worth every bit of it.

From that interview (specifically, at 3:20 in):

1.Paulson told this person (who is writing a biography, apparently) that he intended to use the TARP money to inject into the banks and not buy toxic assets a full ten days before he testified before Congress.

2.He then testified before Congress to exactly the opposite.

This is about as clear an allegation of perjury (which, by the way, we've heard before - remember Kashkari making essentially the same allegation in his Congressional testimony?) as I've seen.

Now the questions:

1.When will Congress hold Henry Paulson to account for what clearly looks to be a violation of the law, in that he appears to have sworn falsely before Congress.

2.Who else knew of and assisted in this intentional deception? Specifically, were Geithner and/or Bernanke involved?

3.It has been alleged that Lloyd Blankfein, Goldman's CEO, was also told in advance. If so that is material non-public information and any trading that Goldman conducted based on that information is potentially unlawful.

This sort of outrage with the people's money must not stand.

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HOLA4413

I've seen large increases in rental stock in my area with rents falling month by month. A local EA has had two properties up for rent 'DSS considered' for several months without takers. And we all know that as a landlord, if you do that, your repair bills will eat up much of your profit. The only properties renting are those who are savagely cutting asking rents. If those people all decide to sell at once, with the current buying capacity out there, the market is over.

However, the average bought-the-cart-but-ate-the-donkey, peak purchasing, VI-ramped, glazed-eye Zombie sees prices going up and up from here. I had a friend say to me on Saturday - "But now is a good time to step up the ladder. Houses are going up you know. And WHAT'S THE POINT OF BEING MORTGAGE FREE". Couldn't believe it. Retarded. Sadly, as this is the majority view, something must happen to make it very clear to these folk that we're neck deep in sh*t and business as usual now consists of stacking the corpses of SMEs all over the UK into a stinking communal grave.

Suspect that seismic event will be a loss of confidence in UK gilts and currency. "Positive" UK economic data from retail to housing is now only causing minute upticks in sterling (watch in on reuters when the next positive Haliban/Nationwide/LR figures come out. Think the market has finally understood the UK political/financial scenario. Next step may be currency devaluation, import-driven inflation, emergency interest rate rises and significant increases in mortgage costs.

If this doesn't happen the other potential disaster may be the banks thinking they're finally OK and dumping all the horded QE money into mortgage loans (base rate 0.5%, actual mortgage rates 5-7%, will be impossible for them resist). This will release much of the inflationary power of the QE exercise all at once rather than gradually as Perving King seems to think will happen [sorry Perving - the money isn't in the economy and you should be blo**dy worried where it actually is before you start preaching about deflation]. This will also lead to emergency interest rate rises and the same endpoint.

Whatever actually happens, the key point is that the sheeple of pudding island will never accept HPI is over until someone tattoos it on their foreheads.

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HOLA4414
This deflation nonsense is all great sport, but it is a ludicrous fantasy. Fiat currency has NEVER before in history gone UP in value. NEVER EVER EVER absolutely NEVER.

Central banks target a positive inflationary rate.

It is of course an openly aknowledged design feature of fiat money that prices slowly rise over time.

Problems arise however when the risk spectrum is revealed to be inaccurate.

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HOLA4415
I think it's unlikely there will be another crash.

Especially in view of the extraordinary monetary policy of the past 24 months.

The stimulus was designed to catch the knife, which it has.

From here there will be a very long and boring Japanaslide as the public purse unwinds it ridiculous position.

All the entertainment is behind us.

Hmmm

So you dont rule out another crash but believe it is more likely to be something more protracted?

I think you are probably sort of right in that there are many factors involved with holding up prices and the one that caused the crash so far, the collapse of the global banking system, is not likely to happen again on the same scale. (The government own most anyway)

And I think you are right that the massive stimulous and cutting of rates have "done their job" in arresting the collapsing of house prices and keeping the banks alive, albeit in a zombie state.

But

There are even bigger problems ahead. We have not entered the depression stage yet with posters on this forum, bears included, telling us how bad things are but they are still OK and could buy if they want to. Next year, I am sure, we will have less and less posters thinking it a good idea to buy and more and more admitting they could not buy even if they did want to.

There are political changes ahead, not just here but globally. The most important recent event that will affect our housing market as well as the general financial health of the west was the change of government in Japan. This may seem fairly trival to us now but it is the Macro events that will have the biggest affects and the second largest global economy changing its global economic policies will have a devastating affect on our economy.

As others have said on this and other threads, the stimulous comes with a price and the simple law of gravity will happen. What goes up will eventually.........

and the bigger they are the harder they will.......

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HOLA4416
This is going to be awful. The day is at hand where everytime we go to the supermarket, the prices will have changed. I would hate to be trying to buy my precious metals at that stage :lol:

This deflation nonsense is all great sport, but it is a ludicrous fantasy. Fiat currency has NEVER before in history gone UP in value. NEVER EVER EVER absolutely NEVER.

Take a percentage off the top of your portfolio to trade with - have fun, but do not be foolish with your family's net worth. Get it safe today and DO NOT ****** around!

http://www.bloomberg.com/apps/news?pid=206...id=apG_YeCYUyEg

Bond Market Eyeing 10% Jobless Rate Rejects Recovery

"according to the Merrill Lynch & Co. Global Sovereign Broad Market Plus Index. The gauge, which tracks $15.4 trillion of bonds worldwide, gained 0.73 percent this month, the most since 1.02 percent in March. "

“The bond market does not believe we will see rapid robust rates of growth. The deleveraging of the consumer will act as a drag on growth, which will keep inflation to a minimum and interest rates relatively low.â€

The picture is the same in Europe. U.K. two-year gilt yields dropped to a record low of 0.828 percent on Aug. 25 before ending the week at 0.84 percent. German bund yields of similar maturity declined 12 basis points to 1.25 percent last week and fell from 1.61 percent on Aug. 10 even as government reports showed the economy exited the recession in the three months ended June 30. "

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HOLA4417
Guest pioneer31
Gman a question?

You're listing all these scenario's like happy times.

Do you really wish bad on people?

Please let me give you some happy scenario's of my own.

You lose your job.

You get chucked out of your bedsit.

Your credit rating is shattered and you live miserably ever after on benefits. :lol:

What an absurd post

You're a bit like the bloke who says "I can't f***ing stand people who swear"

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HOLA4418
http://www.bloomberg.com/apps/news?pid=206...id=apG_YeCYUyEg

Bond Market Eyeing 10% Jobless Rate Rejects Recovery

"according to the Merrill Lynch & Co. Global Sovereign Broad Market Plus Index. The gauge, which tracks $15.4 trillion of bonds worldwide, gained 0.73 percent this month, the most since 1.02 percent in March. "

“The bond market does not believe we will see rapid robust rates of growth. The deleveraging of the consumer will act as a drag on growth, which will keep inflation to a minimum and interest rates relatively low.â€

The picture is the same in Europe. U.K. two-year gilt yields dropped to a record low of 0.828 percent on Aug. 25 before ending the week at 0.84 percent. German bund yields of similar maturity declined 12 basis points to 1.25 percent last week and fell from 1.61 percent on Aug. 10 even as government reports showed the economy exited the recession in the three months ended June 30. "

Yet another idiot who believes inflation is linked to economic growth when, in fact, exactly the opposite is true.

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HOLA4419
Guest AuntJess
What an absurd post

You're a bit like the bloke who says "I can't f***ing stand people who swear"

Of course he's absurd, darlin'. Why take seriously any comment made by a chap who can't comb his hair? :lol:

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HOLA4420
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HOLA4421
Well - you wish upon the young people of the UK a world in which they can never aspire to home ownership (witness the 'bedsit' comment) - what's the difference?

You truly are a pr@t of the highest order, who comes on here no to present cogent argument but to goad and gloat.

Sibley is needed on this board, otherwise it's like debating with yourself - you see no other side of the argument.

Or have I missed the point of this whole site????

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HOLA4422
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HOLA4423
Sibley is needed on this board, otherwise it's like debating with yourself - you see no other side of the argument.

Or have I missed the point of this whole site????

I think as Sibley's troubles, whatever they may be, become more accute the 'argument' portion of his posts moves towards 0%. What's the point of his posts are they only consist of more bile being spewed out?

I agree with you on being respectful to bulls as their arguments are often good and no-one can claim to know how things will turn out for sure, but with Sibley? The boy really is acting like a pr@t.

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HOLA4424
thats right, the national debt will be halved tommorrow.

there is a limit to the theory of deficit spending, we are way over it.

If you own someone 1bn lemons and the production of lemons is double then you debt is halved and that just what all this printing of money will do but the lemons in my pocket will also be halved.

good job i got some silver because that does not grow on trees.

Edited by Justice
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HOLA4425
If you own someone 1bn lemons and the production of lemons is double then you debt is halved and that just what all this printing of money will do but the lemons in my pocket will also be halved.

good job i got some silver because that does not grow on trees.

neither does money, or does it?? :lol::lol:

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