They Think It's All Over...

[TheCountOfNowhere]

It's been a funny few months.

The greatest of the greater fools have been out buying "bargain" property and getting themselves low interest rate mortgages ( i.e. 5% ) and giving away theur hard earned ( ) 40% deposit to the banks or MEW'ing so little jonny can get on 'their' housing ladder.

It must be said that the government has created such a window of opportunity, well a window of opportunity for themselves and their cronnies to 'get out of the market' (i'd love to see a list of MP's houses own 18 months ago against houses owned now !!!! ). Well done them. I personally have clawed back 2K in bad ISA investments and i'm getting rid of my last 2 this week.

So, great times all round, so just take a minute and click on this BBC link before the page is update and we loose it forever:

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

And for posterity:

RBS 'ponders share rights issue'

Sarkozy to press for 'Tobin Tax'

Number of failed US banks hits 94

Summer drop in mortgage lending

Cabinet discussing spending cuts

Lloyds in toxic asset plan talks

Swiss exchange investigates UBS

US gets firm with rating agencies

HK banker jailed for insider deal

Top brand values fall in recession

Hmmmm,I see a pattern emerging

Look at those headlines and understand what they mean.

www.HPC.co.uk.....there's been no (BIG) crash....it's just starting.........................

Edited September 20, 2009 by TheCountOfNowhere

[Guest Daddy Bear]

It's been a funny few months.

Look at those headlines and understand what they mean.

www.HPC.co.uk.....there's been no (BIG) crash....it's just starting.........................

In real terms yes - and it will take 5-10 years for the UK housing trough to be reached.

But my friend - we are a few months into a crack up boom - so in Nominal terms I would say your crash is well and truly over - maybe another 5-10% tops.

Interesting times.

Out of interest what would the FTSE, OIL, Gold and UK HPI have to go to before you began to waver?

[Correction]

It's been a funny few months.

The greatest of the greater fools have been out buying "bargain" property and getting themselves low interest rate mortgages ( i.e. 5% ) and giving away theur hard earned ( ) 40% deposit to the banks or MEW'ing so little jonny can get on 'their' housing ladder.

It must be said that the government has created such a window of opportunity, well a window of opportunity for themselves and their cronnies to 'get out of the market' (i'd love to see a list of MP's houses own 18 months ago against houses owned now !!!! ). Well done them. I personally have clawed back 2K in bad ISA investments and i'm getting rid of my last 2 this week.

So, great times all round, so just take a minute and click on this BBC link before the page is update and we loose it forever:

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

And for posterity:

RBS 'ponders share rights issue'

Sarkozy to press for 'Tobin Tax'

Number of failed US banks hits 94

Summer drop in mortgage lending

Cabinet discussing spending cuts

Lloyds in toxic asset plan talks

Swiss exchange investigates UBS

US gets firm with rating agencies

HK banker jailed for insider deal

Top brand values fall in recession

Hmmmm,I see a pattern emerging

Look at those headlines and understand what they mean.

www.HPC.co.uk.....there's been no (BIG) crash....it's just starting.........................

That's just made me a bit scared and I leaked a bit

[LuckyOne]

It's been a funny few months.

The greatest of the greater fools have been out buying "bargain" property and getting themselves low interest rate mortgages ( i.e. 5% ) and giving away theur hard earned ( ) 40% deposit to the banks or MEW'ing so little jonny can get on 'their' housing ladder.

It must be said that the government has created such a window of opportunity, well a window of opportunity for themselves and their cronnies to 'get out of the market' (i'd love to see a list of MP's houses own 18 months ago against houses owned now !!!! ). Well done them. I personally have clawed back 2K in bad ISA investments and i'm getting rid of my last 2 this week.

So, great times all round, so just take a minute and click on this BBC link before the page is update and we loose it forever:

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

And for posterity:

RBS 'ponders share rights issue'

Sarkozy to press for 'Tobin Tax'

Number of failed US banks hits 94

Summer drop in mortgage lending

Cabinet discussing spending cuts

Lloyds in toxic asset plan talks

Swiss exchange investigates UBS

US gets firm with rating agencies

HK banker jailed for insider deal

Top brand values fall in recession

Hmmmm,I see a pattern emerging

Look at those headlines and understand what they mean.

www.HPC.co.uk.....there's been no (BIG) crash....it's just starting.........................

Sometimes, single data points can be misleading. Other times they can be revealing.

The house next to mine sold for 100 units in 2001, 240 units in 2004 and is on the market for 350 units to-day.

I cannot accept that people are 3.5 times richer to-day than they were in 2001 therefore I cannot accept that house prices are "correct" to-day.

The affordability crash is only just beginning.

It will be sped up by the fact that 20% of the houses on my street will be on the market within the next 5 years because the owners since the 1960s or 1970s are now in their 70s or 80s and there are very few people who can afford current prices.

The demographic crash is going to dovetail with the affordability crash with results that will make the "complacent" renters of equity from banks (called owners in some circles) squirm.

[LuckyOne]

Out of interest what would the FTSE, OIL, Gold and UK HPI have to go to before you began to waver?

I think that this question has missed a key parameter : the rate of exchange between Sterling and the Euro.

Depending on how one's life is organized, a 20% rise in the FTSE might give a lot of comfort to a renter if house prices only rise 5%. A 10% rise in house prices might also be very comforting if the Euro appreciates by 25% against Sterling.

I accept that there are second order effects implied by your Oil and Gold question but I think that the world might be moving to a place where Oil and Gold prices are almost constant in Euros and their variability against Sterling or Dollars is very highly correlated to movements in exchange rates.

[Pearshape]

It will be sped up by the fact that 20% of the houses on my street will be on the market within the next 5 years because the owners since the 1960s or 1970s are now in their 70s or 80s and there are very few people who can afford current prices.

interesting point that - baby boomers effect - read another article a while ago saying that the baby boomers are starting to withdraw from the pensions - effect, - large negative cash flow - the answer;

http://www.telegraph.co.uk/news/newstopics...ion-saving.html

The ponzi scheme will continue................

Continued deaths from the baby boomers will off course put pressure on house prices - but at the same time, no matter what the effectial sale price, sales value will be realised and passed onto the next reciepient, after windfall tax of course!!

[TheCountOfNowhere]

In real terms yes - and it will take 5-10 years for the UK housing trough to be reached.

But my friend - we are a few months into a crack up boom - so in Nominal terms I would say your crash is well and truly over - maybe another 5-10% tops.

Interesting times.

Out of interest what would the FTSE, OIL, Gold and UK HPI have to go to before you began to waver?

Daddy bear, I have to agree, the crash may be over bar maybe 5-10% in nominal terms. That is still one hell of a crash and not quite what most people on here, never mind the UK, expected. Another 10% still represents maybe 20K off peoples (achievable) selling prices across the board. We aint close to acceptance of these drops yet and I dont think reality has hit yet, but believe me now, with headlines like those on the BBC and general empirical evidence, capitulation is arriving fast.

One oddity though that I cant fathom is that the house prices in the U.S./Spain/Dubai maybe point to the true reality, i.e. 40-50% down, and their markets really re at that level so we should get that that point at some point.

"Out of interest what would the FTSE, OIL, Gold and UK HPI have to go to before you began to waver?"

Im out of gold, jesus, talk about bubbles....the FTSE, jesus, talk about bubbles ( GET OUT NOW ), never been into OIL and the HPI can go up 10% but that would only be because of the imbalance of top end middle class sales( the people about to loose their 40% deposit, our saviours ). I dont buy any of it, gold is being ramped, oil,well it's sticky and house prices...well, do you really want a house when you have no job and you have to move to Poland and pretend you're a builder ?

Edited September 20, 2009 by TheCountOfNowhere

[Guest Daddy Bear]

Daddy bear, I have to agree, the crash may be over bar maybe 5-10% in nominal terms. That is still one hell of a crash and not quite what most people on here, never mind the UK, expected. That still represents maybe 20K off peoples (achievable) selling prices across the board. We aint close to acceptance of these drops yet and I dont think reality has hit yet, but believe me now, with headlines like those on the BBC and general empirical evidence, capitulation is arriving fast.

One oddity though that I cant fathom is that the house prices in the U.S./Spain/Dubai maybe point to the true reality, i.e. 40-50% down, and their markets really re at that level so we should get that that point at some point.

"Out of interest what would the FTSE, OIL, Gold and UK HPI have to go to before you began to waver?"

Im out of gold, jesus, talk about bubbles....the FTSE, jesus, talk about bubbles ( GET OUT NOW ), never been into OIL and the HPI can go up 10% but that would only be because of the imbalance of top end middle class sales( the people about to loose their 40% deposit, our saviours ). I dont buy any of it, gold is being ramped, oil,well it's sticky and house prices...well, do you really want a house when you have no job and you have to move to Poland and pretend you're a builder ?

At the risk of this being consigned to the economics section I will repost what i just posted on the other thread.

Watch the dollar and £ - every % they decline is the continuation of the inflationary default on debt.

Bond Markets won't take it the end.

A tipping point will be reached - they will demand greater and greater yield.

World banks cannot put up IR's

World banks will have to print more and more money to "buy their own bonds as there will be no buyers"

Viscious feedback loop

HYPERINFLATION HERE WE COME....

I fully expect the markets to see this before it actually happens - a tipping point will come - a self fulfilling prophecy.

Good Night.

[scottbeard]

The house next to mine sold for 100 units in 2001, 240 units in 2004 and is on the market for 350 units to-day.

I cannot accept that people are 3.5 times richer to-day than they were in 2001 therefore I cannot accept that house prices are "correct" to-day.

Being devil's advocat, what makes you so sure that prices were "correct" in 2001? Perhaps they were undervalued in 2001.

Perhaps people aren't actually richer - their wealth has just been acknowledged (much like an undiscovered oil field is "underpriced" until someone actually finds the oil that was there all along).

That isn't my own view, by the way. All I'm saying is that if I tell you an item cost 100 in 2001 and 350 in 2009, you cannot deduce from that fact alone that the 2009 price is "wrong" in any way.

[scottbeard]

World banks will have to print more and more money to "buy their own bonds as there will be no buyers"

Or just stop borrowing and spend only what the government can collect in taxes?

[Guest Daddy Bear]

A hyperinflationary monetary holocaust with another 10% nominal falls in house prices.

Or just a bit more wiggle room for one's forecasts?

No - I am saying we might get further falls in nominal house prices in the next 6-12 months (5-10% MAX) - as the housing market was so overvalued - in my opinion it is unlikely.

Aside from that - asset/stock/gold/oil and commodities will continue their upward trend.

Massive Inflation - wages will follow suit pretty quickly - allowing a correct real term fall of about 50 - 60% from peak - around about 2016

[Guest Daddy Bear]

Or just stop borrowing and spend only what the government can collect in taxes?

Now do you REALLY think that is likely?

[LuckyOne]

interesting point that - baby boomers effect - read another article a while ago saying that the baby boomers are starting to withdraw from the pensions - effect, - large negative cash flow - the answer;

http://www.telegraph.co.uk/news/newstopics...ion-saving.html

The ponzi scheme will continue................

Continued deaths from the baby boomers will off course put pressure on house prices - but at the same time, no matter what the effectial sale price, sales value will be realised and passed onto the next reciepient, after windfall tax of course!!

We get back to the same problem.

Any given house that a teacher, fireman or policeman could buy in 1969 at the age of 32 is now only affordable for a high powered solicitor or banker in 2009 of the same age.

High house prices have enforced negative social mobility on all of us. This may be the problem that ultimately breaks the ponzi scheme apart.

[moonriver]

So, great times all round, so just take a minute and click on this BBC link before the page is update and we loose it forever:

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

And for posterity:

RBS 'ponders share rights issue'

Sarkozy to press for 'Tobin Tax'

Number of failed US banks hits 94

Summer drop in mortgage lending

Cabinet discussing spending cuts

Lloyds in toxic asset plan talks

Swiss exchange investigates UBS

US gets firm with rating agencies

HK banker jailed for insider deal

Top brand values fall in recession

Hmmmm,I see a pattern emerging

Look at those headlines and understand what they mean.

www.HPC.co.uk.....there's been no (BIG) crash....it's just starting.........................

Interesting, and I see another few headlines have been added....

"Further job fears at Bosch plant

Postal workers to vote on strike"

I agree, this is just a sign of the start of the coming crash, imo.

[TheCountOfNowhere]

At the risk of this being consigned to the economics section I will repost what i just posted on the other thread.

Daddy bear,more than anyone on this site your predictions scare me. Not because they are mental, because they are unerringly right.

For f**k sake, either stop it or join the BBC editorial team.

TBH I missed the perfect exit point when I sold my house. Gold was a great bet and a move into Euro would have been sensible then.

I'm looking at how best to escape the UK with an much wealth in tact as possible, but its all now high risk or pointless.

My one saviour as far as I can see....farm land. I'll say no more. Or stand for parliament t

Anyone looking at the facts, not the gossip or the ramping, must surely come to the same conclusion.

A war, could be coming, and that is scary. WWII men were drafted up to the age of 44 !!! Im 2 years short of that so hopefully would be okay, come the BIG one.

Even to be sat here contemplating these possibilities means something is wrong with society. When something is wrong, something will change. The best solution I can see is bankruptcy for the banks, garauntee depositis/food supplies/cash flow/Hang the bankers that caused the collapse from lamposts in London.

Is that unreasonable ?

[Si1]

A hyperinflationary monetary holocaust with another 10% nominal falls in house prices.

Or just a bit more wiggle room for one's forecasts?

you don't need hyperinflation to allow real terms falls of another 30%+ over next decade - just normal inlfation and zero nominal rises could do it

[LuckyOne]

Being devil's advocat, what makes you so sure that prices were "correct" in 2001? Perhaps they were undervalued in 2001.

Perhaps people aren't actually richer - their wealth has just been acknowledged (much like an undiscovered oil field is "underpriced" until someone actually finds the oil that was there all along).

That isn't my own view, by the way. All I'm saying is that if I tell you an item cost 100 in 2001 and 350 in 2009, you cannot deduce from that fact alone that the 2009 price is "wrong" in any way.

Fair enough.

I would take the next step though and say that a price of 350 units in 2009 is so silly that I would rather put my money into a bond yielding 3.5% than a house. This is from someone who is really bearish on bonds ....... Linkers with a real yield of 0% are even more appealing ........

[robo1968]

Being devil's advocat, what makes you so sure that prices were "correct" in 2001? Perhaps they were undervalued in 2001.

Perhaps people aren't actually richer - their wealth has just been acknowledged (much like an undiscovered oil field is "underpriced" until someone actually finds the oil that was there all along).

That isn't my own view, by the way. All I'm saying is that if I tell you an item cost 100 in 2001 and 350 in 2009, you cannot deduce from that fact alone that the 2009 price is "wrong" in any way.

I understand your point , however,

Assuming that the property hasn't been added to in any large value adding way, the same type of family will be trying to buy it now as there was in 2001.

I would say that you can deduce that the 2009 price is wrong by virtue of the fact that the average earnings (upon which mortgages are based) has not tripled since 2001 therefore the ratio has changed to such an extent that one could easily say the current price is too high.

That is the most realistic way of stating it for me.

[TheCountOfNowhere]

I remember reading a piece by Hunter Davis (wrote Beatles biog, ghosts Rooney and has newspaper column) who bought his current house years ago when he was basically an unknown journalist - today he is fairly well known and is a successful writer - but could not afford to buy his house at today's price even given his high earnings.

Well, I dont think it's just him with this issue.

Bloke next to me at work is selling to rent and he couldnt afford the same house and he is on £70K+ now !!!

Divorced bloke at work, being shafted by the ex-missus, ran up massive debts, he couldnt get close to borrowing enough money to buy the house he sold to some idiot 3 months ago ( they got a bargain ) and I, well, I would refuse to pay 4 times my income to buy the same house I bought for 0.9 times my income 9 years ago.

That's the reality of the situation....houses are over-priced.

P.S. No "no shit sherlock" comments, please

Edited September 20, 2009 by TheCountOfNowhere

[scottbeard]

Or just stop borrowing and spend only what the government can collect in taxes?

Now do you REALLY think that is likely?

It's what I would do if I was in power. I'd rather see 50% the population in soup kitchens than 90% of them. What would you do if you woke up tomorrow in No.10? Hyperinflate or stabilise?

I would say that you can deduce that the 2009 price is wrong by virtue of the fact that the average earnings ... has not tripled since 2001 therefore the ratio has changed to such an extent that one could easily say the current price is too high.

That is the most realistic way of stating it for me.

I agree - that is my viewpoint as well. All I was saying in my post above is that if I tell you an item cost 100 in 2001 and 350 in 2009, you cannot deduce from that fact alone that the 2009 price is "wrong" in any way. You can legitimately deduce that by other means.

[_w_]

A hyperinflationary monetary holocaust with another 10% nominal falls in house prices.

[Traktion]

A war, could be coming, and that is scary. WWII men were drafted up to the age of 44 !!! Im 2 years short of that so hopefully would be okay, come the BIG one.

Do you really think people would stand up for this country over some war of folly? Has this forum and the birth of the Internet as a mechanism of mass education and communication not struck you as an irreversible enlightening? Then consider that the Internet has only relatively recently had such an impact...

The control mechanisms are slipping. Soon, propaganda will be very difficult to pull off. People are questioning everything; the very monetary and economic fabric of the world included. What can they do to stop it? Go communist and shut down access? No chance - the cat is out of the bag.

IMO, the collective knowledge of the people will drive through a far more powerful form of democracy and freedom. Time is running out for the plutocrats. Their number will soon be up.

[Guest Daddy Bear]

It's what I would do if I was in power. I'd rather see 50% the population in soup kitchens than 90% of them. What would you do if you woke up tomorrow in No.10? Hyperinflate or stabilise?

They have no choice - try to stabilise it and the economy will collapse - too much debt.

They are frantically trying to inflate.

There will only be one outcome.

[TheCountOfNowhere]

[quo

te name=Traktion' date='Sep 20 2009, 10:36 PM' post='2152881]

Do you really think people would stand up for this country over some war of folly?

Yes.

They believe the adverts of the tele

Seriously, yes.

When war comes...you dont get a choice. You go to war and have a 50/50 chance of gettting shot, or you refuse and you get shot, 100/0 chance.

We've been lucky, 65 year and no war...well apart from Iraq, Afghan, bosnian......i think we are on abou 20 so far.

65 year for a waring nation, i.e. us, is a good spell, but if your the bully of the school and you're a bit skint...you go take...

You can pretend this doesnt happen but, sadly, it does.

Thank f**k im old

[campervanman]

Massive Inflation - wages will follow suit pretty quickly

Wage inflation? How will that happen then? It's not exactly like the 1970's is it when the unions were strong and governments had to give in to excessive pay demands. Are you suggesting that in an era where government will need to control spending more than at any time in living memory and the private sector needs to keep prices down to shift stuff that they will volunteer to pay more for labour? In a world where UK labour rates are 10x those in India and China, just why would they?