Serpico's Famous Thread - Is It Time To Buy?

[leicestersq]

it's amazing how much potential downside there is.what's even more amazing is how quickly people forget.

What is they forgot?

[BobBobson]

I'm posting this for the newbies who might not remember the crash and the devastating results of the bank's actions. -- read it and ask yourself "Is it time to buy?"

A hard one.

If left to market forces, house prices would have already taken a serious tanking in this country. But when you understand that inflated house prices are all that is holding the entire financial system in place, you would have to imagine that their will be great efforts underway to prevent them subsiding to true market value, as this would mean that all the mortgage backed assets that are keeping the financial institutions solvent, would disintegrate. A housing price price crash would bring about another financial collapse. The situation just now is a bit like when Wiley Coyote chases the RoadRunner of the edge of a cliff, he can keep running until he looks down and realises that their is no solid ground beneath his feet, at which point he plumments. In the case of the economy, as long as nobody admits that property is worth a lot less than the value that it is being held at, it can keep running on thin air......although not for ever.

I think that things will be managed in order that property prices are given a big crash mat (BIG inflation) to come crashing back down to true market value upon.

Edited February 14, 2011 by Retardstic

[VeryMeanReversion]

The situation just now is a bit like when Wiley Coyote chases the RoadRunner of the edge of a cliff, he can keep running until he looks down and realises that their is no solid ground beneath his feet, at which point he plummets......

.... and lands on a pile of freshly printed banknotes.

[Neverland]

A hard one.

If left to market forces, house prices would have already taken a serious tanking in this country. But when you understand that inflated house prices are all that is holding the entire financial system in place, you would have to imagine that their will be great efforts underway to prevent them subsiding to true market value, as this would mean that all the mortgage backed assets that are keeping the financial institutions solvent, would disintegrate. A housing price price crash would bring about another financial collapse.

I think that things will be managed in order that property prices are given a big crash mat (BIG inflation) to come crashing back down to true market value upon.

You assume that things will be managed... you may not be right

Personally I don't have much faith that Mervyn King and George Osborne are any more competent than the hapless Norman Lamont

[council dweller]

.... and lands on a pile of freshly printed banknotes.

Why? Is he a banker?

[Democorruptcy]

A hard one.

If left to market forces, house prices would have already taken a serious tanking in this country. But when you understand that inflated house prices are all that is holding the entire financial system in place, you would have to imagine that their will be great efforts underway to prevent them subsiding to true market value, as this would mean that all the mortgage backed assets that are keeping the financial institutions solvent, would disintegrate. A housing price price crash would bring about another financial collapse. The situation just now is a bit like when Wiley Coyote chases the RoadRunner of the edge of a cliff, he can keep running until he looks down and realises that their is no solid ground beneath his feet, at which point he plumments. In the case of the economy, as long as nobody admits that property is worth a lot less than the value that it is being held at, it can keep running on thin air......although not for ever.

I think that things will be managed in order that property prices are given a big crash mat (BIG inflation) to come crashing back down to true market value upon.

Something like this?

[Boughtin95]

It's a real pity that Serpico doesn't post more, he had great insight into what was coming our way.

This quote is from a post he made on 10th September 2006: http://www.housepricecrash.co.uk/forum/index.php?showtopic=35126&view=findpost&p=445121

"The Irish republic could be the biggest crash of all, a bloke from the South parked in my drive at the big funeral commented what wonderful house I had got and how it must have cost a packet, I asked him how much he thought it was worth he replied, were I live in Co Monahan 750K would not buy it probably nearer 1 million, he was of course was referring to Euros but thats £500 to £600K prices are just mental and unsustainable, lifetime mortgages pass it on to the kids with the lack of job security in todays climate. FFS the lunatics are running the asylum.

There is going to be a lot of misery and heartake it might take a few more years but it has already started and the crash will come. When the Banks panic and start calling in the loans, been there done that got the T shirt and boy can they play dirty."

I'm amazed at how accurate he was and I believe the worst has yet to come.

[singlemalt]

it's amazing how much potential downside there is. what's even more amazing is how quickly people forget.

+1

[Belfast Boy]

It's a real pity that Serpico doesn't post more, he had great insight into what was coming our way.

I go with my fiancee to White Park Bay - near Serpico's house - every summer to walk the beach. I can see exactly why he moved there. The scenery there is breath taking.

I don't think those are clouds on the horizon. I think that is Scotland covered in snow.

Edited February 14, 2011 by Belfast Boy

[Venger]

We are discussing the banks destroying the construction companies and developers in Northern Ireland over on the NI forum. It brought to mind the famous thread where Serpico tells what it was like for businesses in the last crash.

http://www.housepric...showtopic=35126

I'm posting this for the newbies who might not remember the crash and the devastating results of the bank's actions. -- read it and ask yourself "Is it time to buy?"

It was not the result of the bank's actions alone. Read that thread carefully again. Serpico the boomtime hard spender brought it nearly all upon himself.

During the boom he over-expanded his business to multiple dealerships and four franchises. Honda, Suzuki Yamaha and BMW.

Every year he bought his wife a brand new car ffs.

not a Morris Minor, but decent kit Wolseley 6/99 the a 6/110, a 3litre Princess a Jaguar 3.8s and another 3.8s followed by a Rover 3.5 coupe a Lancia Flaminia coupe and Jensen

What his story is really about is businessmen and individuals who were reckless and who spent and overextended themselves with no fear the good times would end.

Before Serpico's boom ended, he was not blaming the bankers as his own growing business was on the up and up, and put him in a position to pick up a trophy asset from all sorts of people who had been overstretched in the previous bust. He was happy enough to acquire assets at cheap price from someone else who had gone bust.

The wife loved it but it wanted a lot spent, I went back and told the guy no way at £59K, he opened a foulder and slid a letter out just as far as the heading HM Customs & Excise VAT Recovery was all I could see, bid me at it? okay £15K it want;s a fortune spending and a years work, he told me to piss off I was not going to nick it, it had been subject of a Court charging order and a four Court battle with the Wirrakls biggest Audi/VW dealer who had gone bus. I eventually went £30 and got it, the wife spent a year and £35k (thirty years ago)

Totally gutted new kitchen etc new tramacked dribe sandstone wall rebuilt with two sets of 9ft Oack gates new tarmac deive to the paddock four stable block and tackroom and a new full size all weather riding menage.

Nice? live in Australian groom, top class hunters in the stables, gardener, Bentley T11 and the wifes Mercedes 450se in the garage, lovely jubbly. I had just a 9K mortgage on the place, it sold a year last may for £985K. I was also sponsoring a 10 time Isle of man T.T winner and and world champion motor cycle racer plus a couple of good blokes on a sidecar outfit.

£985K great stuff the trouble is it was NOT SOLD BY ME!!!,

Live in staff, running horses, a Bentley and Merc. Further on to the thread he also tells how he had his own private plane and all the associated running costs including hangar fees!

The best thing from his story is how two younger people starting in business were able to buy his business premises from the bank for a fraction of its previous value. Serpico had his chance to secure his future but he spent his money like water and was overextended. The new owners might have also messed up because their business plan was wrong but it still gave lots of other similar people a chance to make a go of things themselves. As it should do again. With assets brought back to market from those who had overextended themselves like Serpico, or who didn't save enough money in the good times to get themselves through a rough patch.