Are We In Danger Of Forming Our Own Herd?

[Gavin]

The essence of this site was and still is its championing of a minority view.

We spend a lot of time debunking what we see as common myths, call people sheeple, laugh at BTL 'numpties' and despair that joe public is gullibly drinking down all dumbed down medya coverage.

We think that Gordon Brown doesn't know what he is doing, question the governor of the Bank of England's sanity or motives and generally pat ourselves on the back for being the few correct ones out of a mass of imbeciles.

Now I think much of what we say here is true. However, are we simply now not just creating a new herd? A herd that ignores bull arguments?

Are we not simply like a bizarre religious sect that is convinced its God is the only true one, and we will all end up committing financial suicide in a weird pact?

Are we so sure that so many people don't think about their finances?

On the one hand I think that the market will only turn into a crash, which is what we all talk about, when the herd is big enough to become the majority, so some herd mentality is a good thing. My concern is that we are being a little bit to smug here to warrant healthy exchanges and becoming blinkered?

I can't think of a single fundamental reason to change my stance on housing, but I am worried about back slapping complacency.

[MarkG]

However, are we simply now not just creating a new herd? A herd that ignores bull arguments?

No. The problem is the bull arguments now basically seem to come down to:

'The Bank of England will cut interest rates to prop up the housing market'

'SIPPS! SIPPS! SIPPS will save us all!'

and

'House prices never go down in the long term! Buy now and you'll still be better off after twenty years of negative equity!'

All of which have been argued over hundreds of times. Why do it again?

[Smell the Fear]

The essence of this site was and still is its championing of a minority view.

We spend a lot of time debunking what we see as common myths, call people sheeple, laugh at BTL 'numpties' and despair that joe public is gullibly drinking down all dumbed down medya coverage.

We think that Gordon Brown doesn't know what he is doing, question the governor of the Bank of England's sanity or motives and generally pat ourselves on the back for being the few correct ones out of a mass of imbeciles.

Now I think much of what we say here is true. However, are we simply now not just creating a new herd? A herd that ignores bull arguments?

Are we not simply like a bizarre religious sect that is convinced its God is the only true one, and we will all end up committing financial suicide in a weird pact?

Are we so sure that so many people don't think about their finances?

On the one hand I think that the market will only turn into a crash, which is what we all talk about, when the herd is big enough to become the majority, so some herd mentality is a good thing. My concern is that we are being a little bit to smug here to warrant healthy exchanges and becoming blinkered?

I can't think of a single fundamental reason to change my stance on housing, but I am worried about back slapping complacency.

<{POST_SNAPBACK}>

Gavin,

having discussed with most people I know, I am positive that most people (I am talking about a range of people, from trades to professions) do not think about economics in any meaningful way.

They are the ones who are in thrall to a religion - accepted wisdom, without thought.

[planit]

I make myself stand back and take a look at all sides of this argument very regularly for this exact reason.

I think that often on this forum the bulls are shouted down with a bit too much venom which is not good for this site. We need to try to attract these people so that visitors can see both sides of the argument clearly. These people are not as clued up to our arguments as we are and points that we take as granted will be new to them. All this could give the overall view that we ae a load of discontent non-homeowners.

To balance this all the data must be very accurate on the homepage etc. Thye graphs must be up to date and any bullish forcasts on house prices should be put up faster than the negative ones. I have thought myself recently that the homepage is looking a bit like the webmaster has only put up the bearish economists predictions - and I know that Wrigglesworth's last prediction was for a 5% fall, non stagnation.

Sorry if I have gone on a bit its just I think this is very important for the website.

[I Told You So]

I can see your point, but its now so obvious that the market is falling there is no real bull argument.

In fact its all a bit boring now, you know its happening and its just a waiting game to see how long it takes.

Re peoples financial nouse, unfortunately I really do believe most adults in this country haven't got a clue.

The old "interest rates went to 15% last time there won't be a crash" me "thats interesting why are prices prices falling and the base rate is only 4.5%" conversation. They can't answer it.

Clueless.

Edited August 31, 2005 by I Told You So

[Randall Herbert]

Don't worry Gavin...

Housing market bubbles are hot.

Fire is hot

Bears know its hot and have no requirement to re-take the hot test.

Bull's forget what hot is all about on a wave of pseudo religeous growth mantra's.

We won't get burnt. We know that fire burns and we don't need a preacher (wrigglesworth) to tell us that its actually cold.

"Better to learn from experience, but let the snake bite somebody else"

[needle]

The essence of this site was and still is its championing of a minority view.

We spend a lot of time debunking what we see as common myths, call people sheeple, laugh at BTL 'numpties' and despair that joe public is gullibly drinking down all dumbed down medya coverage.

We think that Gordon Brown doesn't know what he is doing, question the governor of the Bank of England's sanity or motives and generally pat ourselves on the back for being the few correct ones out of a mass of imbeciles.

Now I think much of what we say here is true. However, are we simply now not just creating a new herd? A herd that ignores bull arguments?

Are we not simply like a bizarre religious sect that is convinced its God is the only true one, and we will all end up committing financial suicide in a weird pact?

Are we so sure that so many people don't think about their finances?

On the one hand I think that the market will only turn into a crash, which is what we all talk about, when the herd is big enough to become the majority, so some herd mentality is a good thing. My concern is that we are being a little bit to smug here to warrant healthy exchanges and becoming blinkered?

I can't think of a single fundamental reason to change my stance on housing, but I am worried about back slapping complacency.

<{POST_SNAPBACK}>

I agree. Have noticed this here in the past 6-8 weeks.

Whenever I see a bandwagon with simple straightforward solutions I get suspicious.

Someone mentioned "preachers" too - we have our own on here.

"Its a pity all the people who know how to run the economy are stuck cutting hair and driving taxis" - George Burns

[nickd]

I think Gavin makes good points. One needs to be objective always.

As for people saying "its falling as we speak" , its, er, well, sort of, depending where you look.

To me it seems unfortunately there's plenty of stuff still selling, particularly at the bottom end where they're only knocking off 5k or so and not off everything.

It seems to me we will have a situation similar to the endownment mortgage shortfall, where it was only much later people found out they wouldn't get enough payout.

Along the same lines, 25 years from now, today's FTBs will say oh dear my debt hasn't been eroded how will I ever retire.

I thought Charlie the Tramp's comment on another post that of the £1 trillion debt, half comes from last 8yrs -ish and other half from 600 before that, is a truly frightening statistic.

Is shows the banks have well and truly shafted a whole generation, more than any time in history perhaps.

I forsee the worst case scenario actually happening, a Japan style decrease of a few % a year for a very long time. I suppose this is a crash, but in the most unhelpful way possible to us......

[malco]

The big question is surely energy supply. If the oil price drops to $30 and stays there for years then I can't see what will cause a crash. A crash is surely a mass sudden mood alteration. Why should that happen? Why not just let everything sliiiide for years? Eventually folk wake up and see its £s to the Euro and not vice versa, and that they aren't going to make capital on their house, but they'll get used to it. Or, folk just plug on covering their debt. There has been a step increase in house prices, but who can really say whether the forces that drove prices that high won't keep them that high? Perhaps slowly appreciating as wages rise.

On the other hand, if Peak Oil hits and global production actually starts to fall, all the bets have to be off. Then it's mayhem - banking institutions that looked solid as stone for generations could fail one after another all over the world. Hard to say where that would end. I would not be surprised to see the USA a smouldering has-been power in ten years, with UK not far behind, while many now poor countries will seem to leap ahead.

Anything can happen. It's all about oil, as I see it.

[backtoparents]

probably...

[Ephraim Bubble Blower]

Some of us may have been too young to care, but an important test would be to see whether those of us that are currently unemotionally looking at economic fundamentals and declaring houses (probably) overvalued, were the same people that could have looked at prices in say 1995 and said, "Now is a fantastic time to buy" whilst our friends/peers looked at us in amazement, drowning as they were in negative equity.

I'm very conscious of the risk of becoming married to a particular view especially as I've been bearish on houses since 2000 or so, and have consistently been proved wrong. However the key is to realise that those factors that we believe will drive house prices down (interest rates, debt to equity ratios, low yields etc..) were all present in the mid-1990s, albeit the other way around. I was too young to be interested in house prices back then, but it would be an interesting test for those bears on the site who were not.

[spline]

I’ve been lurking for a while but Gavin’s post prompted me to register.

I understand the idea behind having a focus for what was previously quite a minority view on house prices, and go along with this, but I was struck by the responses on the recent ‘interest only’ thread – very few posters appeared able to say directly that prices might rise over the 25 year period, some even pointing to the Japanese experience as a good model for UK house prices, and all sorts of convolutions seemed to be necessary to avoid saying what should have been a fairly obvious thing, even taking account of the current low inflation environment.

I fully agree that prices are likely to fall for the remainder of this cycle but surely it should be possible to say that the cycle is likely to repeat without tying ones self in knots?

House price cycles are one thing but total economic meltdown is something different …

[Time to raise the rents.]

The essence of this site was and still is its championing of a minority view.

We spend a lot of time debunking what we see as common myths, call people sheeple, laugh at BTL 'numpties' and despair that joe public is gullibly drinking down all dumbed down medya coverage.

We think that Gordon Brown doesn't know what he is doing, question the governor of the Bank of England's sanity or motives and generally pat ourselves on the back for being the few correct ones out of a mass of imbeciles.

Now I think much of what we say here is true. However, are we simply now not just creating a new herd? A herd that ignores bull arguments?

Are we not simply like a bizarre religious sect that is convinced its God is the only true one, and we will all end up committing financial suicide in a weird pact?

Are we so sure that so many people don't think about their finances?

On the one hand I think that the market will only turn into a crash, which is what we all talk about, when the herd is big enough to become the majority, so some herd mentality is a good thing. My concern is that we are being a little bit to smug here to warrant healthy exchanges and becoming blinkered?

I can't think of a single fundamental reason to change my stance on housing, but I am worried about back slapping complacency.

<{POST_SNAPBACK}>

Good post Gavin.

I think the HPC bears are rather bohemian, like a nudist colony that claims to have shed itself of possesions in favour of openness & humanity.

But the truth is in the detail, the nudists all arrive by caravan & their status whilst not displayed by their clothes, is played out in the age & value of the caravans they towed to the meeting.

So the clamour for status is ongoing despite the claims to the opposite.

[MarkG]

the same people that could have looked at prices in say 1995 and said, "Now is a fantastic time to buy" whilst our friends/peers looked at us in amazement,

I'm not sure I'd have said 'it's a fantastic time to buy', but if I was my current age on my current salary back then I'd have bought a house: prices were reasonable for reasonable houses, even if they went down a few thousand in the future.

I was too young to be interested in house prices back then

Ditto. But I think it really comes down to a simple question: is this a reasonable house to be paying that much money for? If it is, then buy and don't worry about what the price does in future... if not, then don't buy it.

[khali]

Some of us may have been too young to care, but an important test would be to see whether those of us that are currently unemotionally looking at economic fundamentals and declaring houses (probably) overvalued, were the same people that could have looked at prices in say 1995 and said, "Now is a fantastic time to buy"

count me into that crowd. being a basic wage earner with few prospects of promotion, i could see that if i did not act during the last few years of the 90s, i would not get another chance to purchase a property on my own for many, many years.

my advice to any prospective ftb is let the pendulum swing back to where you can reach it. your time will come.

[Catch22]

Now I think much of what we say here is true. However, are we simply now not just creating a new herd? A herd that ignores bull arguments?

Are we not simply like a bizarre religious sect that is convinced its God is the only true one, and we will all end up committing financial suicide in a weird pact?

<{POST_SNAPBACK}>

I'm with you on this one Gavin

...........Now if you shoot people down because they buy, buyers will not impart the information "why they buy" And this site will just end up being a "high church" were we all worship one outlook. .......how do we gauge sentiment here if we only look at sentiment that is selling "short"

I would have thought we would want this site to be seen as being reflective of every bodies hopes and fears. A site were people are educated to look past the Vested Interest  media spin. We will progress and promote this site by becoming inclusive and not exclusive.

Power to the People   

<{POST_SNAPBACK}>

See it is right great minds do think alike

[Scooter]

I can see your point, but its now so obvious that the market is falling there is no real bull argument.

In fact its all a bit boring now, you know its happening and its just a waiting game to see how long it takes.

Re peoples financial nouse, unfortunately I really do believe most adults in this country haven't got a clue.

The old "interest rates went to 15% last time there won't be a crash" me "thats interesting why are prices prices falling and the base rate is only 4.5%" conversation. They can't answer it.

Clueless.

<{POST_SNAPBACK}>

Not that obvious to most people in my experience...

[Sledgehead]

Are we so sure that so many people don't think about their finances?

<{POST_SNAPBACK}>

An ISA? No, it's not an energy drink, Daily Telegraph, Tues 30 Aug

"One in 10 young adults thinks an ISA is an energy drink and one in six thinks it is an iPod accessory, according to research published today that says Britain is a nation of financial illiterates."

...

More than half (57 per cent) did not know how much debt or credit they were in and 45 per cent did not know what a repayment mortgage was - a quarter (23 per cent) thought it was made up of ''interest only'' payments.

...

Almost a fifth (17 per cent) did not identify a student loan as a type of debt and almost a fifth (18 per cent) threw financial statements into the bin without opening them.

The survey of 1,023 adults between the ages of 18 and 65 also highlighted a widespread deficit in knowledge of debt and credit. One in 10 was unable to identify a mortgage as a form of debt (10.5 per cent), while 15 per cent of over-65s thought an inheritance was a debt.

[Guest Guy_Montag]

It is easy to get sucked in with forums, you find a group that thinks the way you do. You talk amoungst yourselves without getting much outside input. You read snippets, anecdotes and so on supporting your view. Eventually you stop doubting & become a true beleiver. Then you strap on a bomb & blow up an underground train.

OK, I may have got a little carried away, but you see the point. I, for one, won't believe in the crash until I see it in headlines. In the mean time I'll post here about how much I want it to happen, look for ways round it, but generally not get carried away by my own spin.

If I happen to see a nice house at, what I believe to be, a reasonable price & within my budget. I'm not buying to make money, I'm buying a home.

[khali]

The essence of this site was and still is its championing of a minority view.

We spend a lot of time debunking what we see as common myths, call people sheeple, laugh at BTL 'numpties' and despair that joe public is gullibly drinking down all dumbed down medya coverage.

We think that Gordon Brown doesn't know what he is doing, question the governor of the Bank of England's sanity or motives and generally pat ourselves on the back for being the few correct ones out of a mass of imbeciles.

Now I think much of what we say here is true. However, are we simply now not just creating a new herd? A herd that ignores bull arguments?

Are we not simply like a bizarre religious sect that is convinced its God is the only true one, and we will all end up committing financial suicide in a weird pact?

Are we so sure that so many people don't think about their finances?

On the one hand I think that the market will only turn into a crash, which is what we all talk about, when the herd is big enough to become the majority, so some herd mentality is a good thing. My concern is that we are being a little bit to smug here to warrant healthy exchanges and becoming blinkered?

I can't think of a single fundamental reason to change my stance on housing, but I am worried about back slapping complacency.

<{POST_SNAPBACK}>

Do we (very aware of being relative newcomer to the forum) wish to grow and have the sentiments expressed here covered in the wider media? I was under the impression that by encouraging membership and active participation, the objectives of the forum ie lower house prices could perhaps be partly met by influencing the media to take an interest in us and thereby getting the message out to the masses by more traditional means (like coronation street for crying out loud).....does that make sense?

[Guest Charlie The Tramp]

The old "interest rates went to 15% last time there won't be a crash" me "thats interesting why are prices prices falling and the base rate is only 4.5%" conversation. They can't answer it.

<{POST_SNAPBACK}>

You should ask them if they are aware of the 1.1 trillon personal debt that has more than doubled the past eight years. We did not carry that in the last crash.

I would think they could not answer that also.

Give them a copy of Credit Action Stats to educate them in reality.

[Marina]

Do we (very aware of being relative newcomer to the forum) wish to grow and have the sentiments expressed here covered in the wider media? I was under the impression that by encouraging membership and active participation, the objectives of the forum ie lower house prices could perhaps be partly met by influencing the media to take an interest in us and thereby getting the message out to the masses by more traditional means (like coronation street for crying out loud).....does that make sense?

<{POST_SNAPBACK}>

It's whether you want to do something about the fact you have to pay twice what someone else paid 5 years ago - for the same thing - and take on a massive debt to do it.

You can argue the toss on here for 10 years if you like - if you could get a 1000 young people to march in London with the placards 'priced out of property', 'No to a lifetime of debt' etc etc you would get mainstream media coverage. Suddenly the game would be up - happy, selfish, little BTL owning middle class England would suddenly realise they have stolen from the generation after them and they are ANGRY.

On top of everything else you guys are going to be paying much higher taxes over the next 10 years to pay our pensions.

Or you can start another thread on here - or you can take a good hard look at Fathers for Justice and see how a few dedicated people have gained enormous media coverage and moved their cause forward in leaps and bounds.

[spline]

I sort of agree with Marina, there is a difference between HPC advocacy, i.e. push our own ‘crash’ agenda/spin (is the objective really to lower house prices?) and promoting a better understanding/awareness of house price cycles. Obviously we should to talk about the current one, but is HPC about debunking VI spin, or putting up its own? What is the stance?

[Time to raise the rents.]

I'm not sure I'd have said 'it's a fantastic time to buy', but if I was my current age on my current salary back then I'd have bought a house: prices were reasonable for reasonable houses, even if they went down a few thousand in the future.

<{POST_SNAPBACK}>

Mark, you sound like you're not really thinking about what you're saying:

1/ If you were on your current salary back then, house prices would have been higher as well. Everything has inflated since then. It's all relative.

2/ Can't you see the logic of your own comment? If you buy a house today, you lock in the price you paid. In the future, depending on you personally, you can expect your salary to be higher. So in the future, you could make a similar comment that you bought back then & now your salary is higher, you are glad you did, because prices have risen since etc etc.

[khali]

It's whether you want to do something about the fact you have to pay twice what someone else paid 5 years ago - for the same thing - and take on a massive debt to do it.

You can argue the toss on here for 10 years if you like - if you could get a 1000 young people to march in London with the placards 'priced out of property', 'No to a lifetime of debt' etc etc you would get mainstream media coverage. Suddenly the game would be up - happy, selfish, little BTL owning middle class England would suddenly realise they have stolen from the generation after them and they are ANGRY.

On top of everything else you guys are going to be paying much higher taxes over the next 10 years to pay our pensions.

Or you can start another thread on here - or you can take a good hard look at Fathers for Justice and see how a few dedicated people have gained enormous media coverage and moved their cause forward in leaps and bounds.

<{POST_SNAPBACK}>

Apart from obtaining some very worthwhile media coverage, have Fathers for Justice achieved any of their objectives yet? Not a sarky question, I genuinely do not know.

Also, has the direct action taken by Gate Gourmets workers advanced their

cause? I've not heard much about that case in a day or two.

I think the energy required to bring mass, unrelenting attention to the topics of this forum will not be available yet. Passive means may yet prevail.