Jump to content
House Price Crash Forum
Realistbear

I M F To Banks: So You Think A Few Billion Is Going To Help?

Recommended Posts

http://uk.finance.yahoo.com/news/banks-4-trillion-debts-are-achilles-heel-of-the-economic-recovery-warns-imf-tele-068c94570433.html?x=0

Banks' $4 trillion debts are 'Achilles heel of the economic recovery', warns IMF
Philip "Balders" Aldrick, 14:49, Tuesday 5 October 2010
More taxpayer support is needed to ensure global financial stability despite the billions already pledged, the International Monetary Fund has warned, as banks remain the achilles heel of the economic recovery.
Lenders across Europe and the US are facing a $4 trillion
refinancing hurdle in the coming 24 months and many still need to recapitalise, the Washington-based organisation said in its Global Financial Stability Report . Governments will have to inject fresh equity into banks
particularly in Spain, Germany and the US
as well as prop up their funding structures by extending emergency support.
Progress toward global financial stability has experienced a setback since April
... [due to] the recent turmoil in sovereign debt markets, the IMF said. The global financial system is still in a period of significant uncertainty and remains the Achilles heel of the economic recovery..../
The IMF estimates in its baseline scenario that Britains debts will reach 86.4pc of GDP in 2015. But should the austerity measures result in growth of 1pc less than the baseline, debts will rise to
99.2pc of GDP
in the same period.

$15TR IMO.

The dawning reality should break through soon. In the meantime the market says buy everything in sight including the currency that will suffer most--the Euro. The PIIGS surely cannot last the winter.

IMF are ignorant fools really as only a few days ago they were on about how the recovery was entrenched and how wonderful things all are.......so much debt and so little pain--yeah right.

Should see some black days on the DOW-FTSE soon.

Edited by Realistbear

Share this post


Link to post
Share on other sites

...

Lenders across Europe and the US are facing a $4 trillion refinancing hurdle in the coming 24 months and many still need to recapitalise,

...

So that's at least $10 trillion, then.

ED: Whoops, didn't see your $15Tr. Probably way closer to the mark.

Edited by yellerkat

Share this post


Link to post
Share on other sites

http://www.telegraph.co.uk/finance/economics/8043800/Banks-4-trillion-debts-are-Achilles-heel-of-the-economic-recovery-warns-IMF.html

........

Although the IMF does not mention individual countries, it is clear it has concerns about the UK. According to the Bank of England, British banks need to refinance £750bn-£800bn of funding by the end of 2012, £285bn of which is emergency support that expires in the same period.

.........

Even US banks may need an extra $13bn of capital if “real estate prices fell significantly”. The research shows that the UK has been relatively prudent on bad debts and capital, having wirtten off all but $50bn of the bad debts identified by the IMF – just 10pc of the total.

.........

The IMF estimates in its “baseline” scenario that Britain’s debts will reach 86.4pc of GDP in 2015. But should the austerity measures result in “growth of 1pc less than the baseline”, debts will rise to 99.2pc of GDP in the same period.

http://www.imf.org/external/pubs/ft/gfsr/2010/02/index.htm

Excutive Summary PDF

Share this post


Link to post
Share on other sites

Where did you pluck this figure from?

ONS valued UK Plc at around 8.3TR a year or so ago. 40% of that wealth was related to housing or about 3.5TR. A 50% drop and more than 1.5TR dissappears into the black hole--the banks hold the notes. That is about $2.4 TR down to the UK. I think you see where the 15TR comes from when you add the rest of the world's housing black holes.

Share this post


Link to post
Share on other sites

The IMF seem to have been wrong or at best masively behind the curve at every stage of this crisis

It really makes me laught that the Tories are trumpeting IMF support for their plans at very opportunity

Share this post


Link to post
Share on other sites

ONS valued UK Plc at around 8.3TR a year or so ago. 40% of that wealth was related to housing or about 3.5TR. A 50% drop and more than 1.5TR dissappears into the black hole--the banks hold the notes. That is about $2.4 TR down to the UK. I think you see where the 15TR comes from when you add the rest of the world's housing black holes.

Thanks. I see where you are coming from except for where do you get the 50% drop figure from? There are also one or two other question marks over those figures ..............

Share this post


Link to post
Share on other sites

The IMF seem to have been wrong or at best masively behind the curve at every stage of this crisis

It really makes me laught that the Tories are trumpeting IMF support for their plans at very opportunity

Of course...thats what happens when you rely on client banks for the figures....they lied.

Share this post


Link to post
Share on other sites

Thanks. I see where you are coming from except for where do you get the 50% drop figure from? There are also one or two other question marks over those figures ..............

IMO the average house will drop by 50% from 2007 to the bottom. If 40% of the value of the UK is based on house price valuations we are going to see a lot of value knocked off UK Plc at the bottom of the crash. Add in mega stock market crashes and the losses could be much higher. Deflation may even result a la Japan.

Rough and ready calculations of course.

Share this post


Link to post
Share on other sites

IMO the average house will drop by 50% from 2007 to the bottom. If 40% of the value of the UK is based on house price valuations we are going to see a lot of value knocked off UK Plc at the bottom of the crash. Add in mega stock market crashes and the losses could be much higher. Deflation may even result a la Japan.

Rough and ready calculations of course.

Above.....you have used "IMO.....;if.......;could...........may...........". I'm not attempting to ridicule you. I used to be massively a bear myself but I'm not sure any more. The weeks, months even years are going by and similar to the jam tomorrow of a ramped stock, the doom tomorrow is always another few days away. :rolleyes: Hey, but maybe when all bears like myself turn bull.....we will see the crash.

Share this post


Link to post
Share on other sites

Above.....you have used "IMO.....;if.......;could...........may...........". I'm not attempting to ridicule you. I used to be massively a bear myself but I'm not sure any more. The weeks, months even years are going by and similar to the jam tomorrow of a ramped stock, the doom tomorrow is always another few days away. :rolleyes: Hey, but maybe when all bears like myself turn bull.....we will see the crash.

KWYM. I am getting fed up with the tease ATM. Looking to buy this winter as houses are a good 35-40% down from peak around here so that may be enough for me.

We are the last man standing I am afraid and I think we are seen as too big to fail and I suspect the fact that we have 5TR of public debt is going to remain the invisible elephant for a few more years.

Unless, of course, there is a trigger.

Share this post


Link to post
Share on other sites

Go on then. Post one on the market now that is 40% down from a selling price at the peak.

You din't quite get what I posted. I am thinking about buying this winter (we are still in ealry Autumn) when I expect prices to be around 40% down from the top.

I am tracking a few properties and this one started out at £280-320k earlier this year. I know for a fact that they will take £250k today for it. So lets say it was on the market in January for £290k and is now £250--that is a drop of 15% or so YTD. The EA said it probably peaked at about £325k late 2007. This sounds about right for a largish 4br near Brighton in a prime near the sea location.

http://www.zoopla.co.uk/for-sale/details/12501205?search_identifier=c4d8d4a8127213e33afde9221d610bce

Flats with sea view holding up and only down 12% or so in the last couple of months:

http://www.zoopla.co.uk/for-sale/details/1983367?search_identifier=0aaf52670e6ad4836bcc1d2e617f9c80

This particular area was much in demand due to proximity to Brighton.

Edited by Realistbear

Share this post


Link to post
Share on other sites

You din't quite get what I posted. I am thinking about buying this winter (we are still in ealry Autumn) when I expect prices to be around 40% down from the top.

I am tracking a few properties and this one started out at £280-320k earlier this year. I know for a fact that they will take £250k today for it. So lets say it was on the market in January for £290k and is now £250--that is a drop of 15% or so YTD. The EA said it probably peaked at about £325k late 2007. This sounds about right for a largish 4br near Brighton in a prime near the sea location.

http://www.zoopla.co...afde9221d610bce

This particular area was much in demand due to proximity to Brighton.

No I didn't get what you said, but that's not my fault. You said "houses are a good 35-40% down from peak " not "houses will be 35-40% down this winter"

On this example that was rumoured to be £325k at peak you need it to be £195k to be 40% down. Do you think that is achieveable?

What is the biggest actual drop you know of? i.e. one that is on the market now that also has a sold price from peak.

Share this post


Link to post
Share on other sites

No I didn't get what you said, but that's not my fault. You said "houses are a good 35-40% down from peak " not "houses will be 35-40% down this winter"

On this example that was rumoured to be £325k at peak you need it to be £195k to be 40% down. Do you think that is achieveable?

What is the biggest actual drop you know of? i.e. one that is on the market now that also has a sold price from peak.

Haven't been tracking for long--started ealier this year and have seen lots of 12-15% drops, examples of which I have posted in my last post. I suppose someone could find out what they pwoperties sold for on Rightmove which goes back ten year or so.

Overall, our market is resilient. 15% drops are insignificant iin my view when you wiegh them againt the madness of the Brown years. Banks have been told not to repossess late pays/no pays and the IR have been kept artficially low even though inflation is said to be a threat. The whole property market is artificial and bears no relationship the fundamentals such as wages, rental values etc.

Share this post


Link to post
Share on other sites

Haven't been tracking for long--started ealier this year and have seen lots of 12-15% drops, examples of which I have posted in my last post. I suppose someone could find out what they pwoperties sold for on Rightmove which goes back ten year or so.

Overall, our market is resilient. 15% drops are insignificant iin my view when you wiegh them againt the madness of the Brown years. Banks have been told not to repossess late pays/no pays and the IR have been kept artficially low even though inflation is said to be a threat. The whole property market is artificial and bears no relationship the fundamentals such as wages, rental values etc.

I'm even more confused now.

Share this post


Link to post
Share on other sites

Haven't been tracking for long--started ealier this year and have seen lots of 12-15% drops, examples of which I have posted in my last post. I suppose someone could find out what they pwoperties sold for on Rightmove which goes back ten year or so.

Overall, our market is resilient. 15% drops are insignificant iin my view when you wiegh them againt the madness of the Brown years. Banks have been told not to repossess late pays/no pays and the IR have been kept artficially low even though inflation is said to be a threat. The whole property market is artificial and bears no relationship the fundamentals such as wages, rental values etc.

I'm watching the Brighton market closely too, and the surrounding areas, alhough I look West towards Shoreham or Lancing, and I have seen a number of good properties drop 10-20% over the last 6 months. Saying that prime central Hove is very sticky. Brighton and Hove are the Florida or California of the UK property market in my mind. Massively inflated in the boom years with poor fundamentals and little to underpin it when the market finally capitulates. I think this winter will be too soon though.

Share this post


Link to post
Share on other sites

I'm watching the Brighton market closely too, and the surrounding areas, alhough I look West towards Shoreham or Lancing, and I have seen a number of good properties drop 10-20% over the last 6 months. Saying that prime central Hove is very sticky. Brighton and Hove are the Florida or California of the UK property market in my mind. Massively inflated in the boom years with poor fundamentals and little to underpin it when the market finally capitulates. I think this winter will be too soon though.

This is what I am seeing. Nice drops that seem to reflect the California situation where prices led the nation and speculation (BTL) was frenzied. As prices continue on this trend it is quite reasonable to expect prices to have dropped by an average of 20% in East Sussex (Brighton area) by the time Crimbo rears its head.

The fundamentals that have been shoring up such inflated prices were simply speculation. Jobs are scarce around here and the commute to London is long and extremely expensive.

Share this post


Link to post
Share on other sites

No I didn't get what you said, but that's not my fault. You said "houses are a good 35-40% down from peak " not "houses will be 35-40% down this winter"

I think he means when proced in gold... :ph34r:

Share this post


Link to post
Share on other sites

This is what I am seeing. Nice drops that seem to reflect the California situation where prices led the nation and speculation (BTL) was frenzied. As prices continue on this trend it is quite reasonable to expect prices to have dropped by an average of 20% in East Sussex (Brighton area) by the time Crimbo rears its head.

The fundamentals that have been shoring up such inflated prices were simply speculation. Jobs are scarce around here and the commute to London is long and extremely expensive.

I have friends who do the commute and they are all miserable and live for the weekends, by which time they are too shattered to have fun. It is totally soul destroying and by the time you add in tube journey and walk/[parking etc it's the best part of 2 hours each way. They get up at 5.30 to be in work by 8.45, then leave at 5.45 and aren't home before 8pm with just enough time to grab a meal in front of some sh1te on teh telly, then bed with no sex because they're grumpy and p1ssed off. Anyone thinking you can work and London and live in Brighton has believed the evil lies of estate agents.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 152 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.