Jump to content
House Price Crash Forum
wonderpup

Str's - Anyone Getting Worried?

Recommended Posts

Just wondering if the STR's on here are getting nervous about the safety of their funds.

There seems to be a trade off coming between a volatility driven crash in prices and the possibility of a real meltdown that vaporises bank savings.

It's the classic fear v greed scenario. Do you wait to see if the crisis drives prices down- or bolt for the exit before that crisis turns your STR fund into a fond memory?

What 'trigger event' would it take to panic the steely eyed STR into buying asap- for example: a Greek default?- a Europe wide meltdown?- or a rise in UK borrowing rates as the market starts to wake up to the reality that UK PLC is deep in the hole?

At what point does the crisis stop being your HPC friend and become a real threat to your cash?

Share this post


Link to post
Share on other sites

Just wondering if the STR's on here are getting nervous about the safety of their funds.

There seems to be a trade off coming between a volatility driven crash in prices and the possibility of a real meltdown that vaporises bank savings.

It's the classic fear v greed scenario. Do you wait to see if the crisis drives prices down- or bolt for the exit before that crisis turns your STR fund into a fond memory?

What 'trigger event' would it take to panic the steely eyed STR into buying asap- for example: a Greek default?- a Europe wide meltdown?- or a rise in UK borrowing rates as the market starts to wake up to the reality that UK PLC is deep in the hole?

At what point does the crisis stop being your HPC friend and become a real threat to your cash?

Bank deposits can always be 'printed' into existence. If British banks got into trouble the government, which already pretty much owns them, would just print them a few trillion. It effectively has already happened in 2008.

And yes there is a tsunami on the horizon. Knuckle down. :lol:

Share this post


Link to post
Share on other sites

Just wondering if the STR's on here are getting nervous about the safety of their funds.

There seems to be a trade off coming between a volatility driven crash in prices and the possibility of a real meltdown that vaporises bank savings.

It's the classic fear v greed scenario. Do you wait to see if the crisis drives prices down- or bolt for the exit before that crisis turns your STR fund into a fond memory?

What 'trigger event' would it take to panic the steely eyed STR into buying asap- for example: a Greek default?- a Europe wide meltdown?- or a rise in UK borrowing rates as the market starts to wake up to the reality that UK PLC is deep in the hole?

At what point does the crisis stop being your HPC friend and become a real threat to your cash?

No I'm not worried about having cash at the bank, I would sooner that than be trapped into buying somewhere I simply can never afford. But thanks for your concern ;)

Share this post


Link to post
Share on other sites

Rhetorical question:

Would you rather hold a bunch of IOUs at the bank, that the bank will owe you on demand. Or is it safer to owe a bunch of IOUs to the bank?

Share this post


Link to post
Share on other sites

Rhetorical question:

Would you rather hold a bunch of IOUs at the bank, that the bank will owe you on demand. Or is it safer to owe a bunch of IOUs to the bank?

Depends who has the most to lose!

"If I owe you a dollar......."

Share this post


Link to post
Share on other sites

Spread your money across as many asset classes as you can, and if you have enough dole it out in as many jurisdictions as you can. Its a pain in the ass to check your portfolios in 6 different countries but remember its a whole new level of diversification.

Note: I've never owned so can't have STRd but I've had the same fears from a long time ago.

Share this post


Link to post
Share on other sites

HPC was lamented on another website, "Inside the HPC community".

And HPCers generally said, they wanted affordable housing for the benefit of all.

So if an STR lost everything, it wouldn't matter so much in the grand scheme of things, so long as they could access affordable housing.

Although, the person losing their STR fund would probably be pulling their hair out due to a perceived loss of wealth...

Share this post


Link to post
Share on other sites

Just wondering if the STR's on here are getting nervous about the safety of their funds.

There seems to be a trade off coming between a volatility driven crash in prices and the possibility of a real meltdown that vaporises bank savings.

It's the classic fear v greed scenario. Do you wait to see if the crisis drives prices down- or bolt for the exit before that crisis turns your STR fund into a fond memory?

What 'trigger event' would it take to panic the steely eyed STR into buying asap- for example: a Greek default?- a Europe wide meltdown?- or a rise in UK borrowing rates as the market starts to wake up to the reality that UK PLC is deep in the hole?

At what point does the crisis stop being your HPC friend and become a real threat to your cash?

I never understand this attitude. I think if we reach the stage where everyone loses their everyday bank deposits then it would mean a complete failure of society and money would be the least of my worries. Owning a house is no protection whatsoever to such turbulence.

I sometimes feel a little knowledge can be dangerous when browsing this forum. Really, if you are living your life in fear of this happening then you are not living life to its fullest potential.

Share this post


Link to post
Share on other sites

I never understand this attitude. I think if we reach the stage where everyone loses their everyday bank deposits then it would mean a complete failure of society and money would be the least of my worries. Owning a house is no protection whatsoever to such turbulence.

I sometimes feel a little knowledge can be dangerous when browsing this forum. Really, if you are living your life in fear of this happening then you are not living life to its fullest potential.

Polish history provides an interesting example of a sort of societal breakdown and upheaval.

In 1939 the country gets occupied by the Germans. In 1945 Poland notionally recovers its sovereignty but is a Soviet vassal state which introduces Communism and a new currency. Communism falls in 1989. Fast forward to today.

If you held pre-war Polish currency, you have some nicely coloured pieces of paper. It became worthless in 1939.

If you held pre-war Polish government bonds, you have nicely coloured pieces of paper. The post-1989 governments refuse to honour any pre-war sovereign debt owed to Polish citizens (but curiously in the 1970s the communist government made a deal to repay about 20% of the face value of such debt held by foreigners in settlement of the whole - this was so that Communist Poland could borrow on the international financial markets). So if you're a local, it became worthless in 1939, if you're foreign you lost 80% of its value in the 1970s.

If you or your great-great grandfather owned a house or some land in 1939, you can have it back in specie, 100% of it (if no-one else had acquired legal title to it from the State in the meantime) or you can have compensation at market value or some other piece of state-owned real estate in lieu.

The moral of the story seems to be that a society that has gone though massive upheavals and turbulence places a greater value on rights to property/real estate than on any other class of rights. It's probably because the property/land is always there, you can see it and touch it. Whereas where can you see and touch the bank accounts, shares, unpaid debts that have simply evaporated?

Share this post


Link to post
Share on other sites

Polish history provides an interesting example of a sort of societal breakdown and upheaval.

In 1939 the country gets occupied by the Germans. In 1945 Poland notionally recovers its sovereignty but is a Soviet vassal state which introduces Communism and a new currency. Communism falls in 1989. Fast forward to today.

If you held pre-war Polish currency, you have some nicely coloured pieces of paper. It became worthless in 1939.

If you held pre-war Polish government bonds, you have nicely coloured pieces of paper. The post-1989 governments refuse to honour any pre-war sovereign debt owed to Polish citizens (but curiously in the 1970s the communist government made a deal to repay about 20% of the face value of such debt held by foreigners in settlement of the whole - this was so that Communist Poland could borrow on the international financial markets). So if you're a local, it became worthless in 1939, if you're foreign you lost 80% of its value in the 1970s.

If you or your great-great grandfather owned a house or some land in 1939, you can have it back in specie, 100% of it (if no-one else had acquired legal title to it from the State in the meantime) or you can have compensation at market value or some other piece of state-owned real estate in lieu.

The moral of the story seems to be that a society that has gone though massive upheavals and turbulence places a greater value on rights to property/real estate than on any other class of rights. It's probably because the property/land is always there, you can see it and touch it. Whereas where can you see and touch the bank accounts, shares, unpaid debts that have simply evaporated?

Moral of the story based on 1 single country in history? We arent poland and we arent going to be taken over by soviet communists.

Share this post


Link to post
Share on other sites

Moral of the story based on 1 single country in history? We arent poland and we arent going to be taken over by soviet communists.

The moral is that when the SHTF and dies down people are most likely to get to keep their houses, farms and shops; whereas there's little desire to compensate for how many numbers they used to have against their name in a ledger (or notched up in a computer) somewhere.

Share this post


Link to post
Share on other sites

The moral is that when the SHTF and dies down people are most likely to get to keep their houses, farms and shops; whereas there's little desire to compensate for how many numbers they used to have against their name in a ledger (or notched up in a computer) somewhere.

Says who? Prove it. Your just make completely ridiculous statements with zero backing. You cant say things like that without some sort of evidence. You have none.

Share this post


Link to post
Share on other sites

Just wondering if the STR's on here are getting nervous about the safety of their funds.

There seems to be a trade off coming between a volatility driven crash in prices and the possibility of a real meltdown that vaporises bank savings.

It's the classic fear v greed scenario. Do you wait to see if the crisis drives prices down- or bolt for the exit before that crisis turns your STR fund into a fond memory?

What 'trigger event' would it take to panic the steely eyed STR into buying asap- for example: a Greek default?- a Europe wide meltdown?- or a rise in UK borrowing rates as the market starts to wake up to the reality that UK PLC is deep in the hole?

At what point does the crisis stop being your HPC friend and become a real threat to your cash?

Be viggylent!!

It's not going to happen next week but ask again next friday about the following week.

Maybe I'm waiting for the shoeshine boy to sing...(eg workmates start to talk about bank runs)

Share this post


Link to post
Share on other sites

Polish history provides an interesting example of a sort of societal breakdown and upheaval.

In 1939 the country gets occupied by the Germans. In 1945 Poland notionally recovers its sovereignty but is a Soviet vassal state which introduces Communism and a new currency. Communism falls in 1989. Fast forward to today.

If you held pre-war Polish currency, you have some nicely coloured pieces of paper. It became worthless in 1939.

If you held pre-war Polish government bonds, you have nicely coloured pieces of paper. The post-1989 governments refuse to honour any pre-war sovereign debt owed to Polish citizens (but curiously in the 1970s the communist government made a deal to repay about 20% of the face value of such debt held by foreigners in settlement of the whole - this was so that Communist Poland could borrow on the international financial markets). So if you're a local, it became worthless in 1939, if you're foreign you lost 80% of its value in the 1970s.

If you or your great-great grandfather owned a house or some land in 1939, you can have it back in specie, 100% of it (if no-one else had acquired legal title to it from the State in the meantime) or you can have compensation at market value or some other piece of state-owned real estate in lieu.

The moral of the story seems to be that a society that has gone though massive upheavals and turbulence places a greater value on rights to property/real estate than on any other class of rights. It's probably because the property/land is always there, you can see it and touch it. Whereas where can you see and touch the bank accounts, shares, unpaid debts that have simply evaporated?

Thanks for that, interesting.

With anything tangible you don't have to take the risk of your bank going bust.

But with houses however you are crystallising your (extensive) losses immediately and with certainty since they are so overvalued. Losing your cash in the bank is not as certain or necessarily as painful if you've spread your str fund around.

And then there are other tangible assets one can park his money in.

Share this post


Link to post
Share on other sites

Says who? Prove it. Your just make completely ridiculous statements with zero backing. You cant say things like that without some sort of evidence. You have none.

For a start, it's something that's ingrained in the legal order. The numbers you have against your name in a ledger or in a computer (eg. if you have a bank deposit, an ETF or shares in a company) are just the benefit of a promise that someone has made to you. When that person can't keep the promise, society lets them become bankrupt and potentially your benefit disappears. Rights in property are of a different order, if someone denies you your land, it doesn't matter how bankrupt they are, you have a right to recover the land.

Rights to property/real estate are treated as a more important type of right then rights to be repaid a debt or to be paid a dividend. And I think that the reasons behind that are probably quite deep seated in human nature (because at the end of the day we're quite territorial animals - with the territories being about 20sqm to 200sqm per family in large cities), but I'm not an anthropologist or psychologist so can't attempt to 'prove' it beyond that. I just gave one obvious historical example of how things panned out in post-communist states after a societal reset of sorts.

Share this post


Link to post
Share on other sites

For a start, it's something that's ingrained in the legal order. The numbers you have against your name in a ledger or in a computer (eg. if you have a bank deposit, an ETF or shares in a company) are just the benefit of a promise that someone has made to you. When that person can't keep the promise, society lets them become bankrupt and potentially your benefit disappears. Rights in property are of a different order, if someone denies you your land, it doesn't matter how bankrupt they are, you have a right to recover the land.

Rights to property/real estate are treated as a more important type of right then rights to be repaid a debt or to be paid a dividend. And I think that the reasons behind that are probably quite deep seated in human nature (because at the end of the day we're quite territorial animals - with the territories being about 20sqm to 200sqm per family in large cities), but I'm not an anthropologist or psychologist so can't attempt to 'prove' it beyond that. I just gave one obvious historical example of how things panned out in post-communist states after a societal reset of sorts.

Its no different. Deposits are guarenteed in this country. If you really think in your tin hat scenario when the government says that all deposits are just wiped out that you will be fine with property because "you have the right to recover the land" then wow. In that society I dont think there would be any respect for any form of ownership. It would be widespread anarchy. No jobs, no shops, no nothing. Looting and anarchy. So unless the land of which you speak is a medievil castle with sharpshooters on the roof tops then your view seems wierd to me.

Of course, if you want to argue that property is a protection against significant hyper inflation then hey, fine. You have an arguement to make.

Share this post


Link to post
Share on other sites

Regardless of all that, about 1/3 of all Poles died in the Second World War. You really need to get your priorities right,

Society needs to get its priorities right.

Consider this. A child has all of its family killed in 1939 and becames an orphan, essentially having its life ruined. A great wrong was done to it and its family and yet it would not be entiled to any redress for this from anyone, eg. nothing from the States that perperated this horrible crime. The loss lay where it fell.

On the other hand, if a person was chased off some real estate at that time (a much much lesser wrong as you very rightly state), 60 years later they or their heirs are entitled to recover it or compensation for the lost value.

Doesn't that seem odd? It seems that wrongs against property ended up being treated more seriously than wrongs commited directly against people.

Share this post


Link to post
Share on other sites

Its no different. Deposits are guarenteed in this country. If you really think in your tin hat scenario when the government says that all deposits are just wiped out that you will be fine with property because "you have the right to recover the land" then wow. In that society I dont think there would be any respect for any form of ownership. It would be widespread anarchy. No jobs, no shops, no nothing. Looting and anarchy. So unless the land of which you speak is a medievil castle with sharpshooters on the roof tops then your view seems wierd to me.

Of course, if you want to argue that property is a protection against significant hyper inflation then hey, fine. You have an arguement to make.

I fully agree that in a total and utter breakdown of society, you no more 'own' your house then you could claim to own Trafalgar Square tonight. But I had in mind more of a societal wobble and its aftermath. In such a case it'd be better to have tangible things than intangible things. It's surprising that it's controversial.

Share this post


Link to post
Share on other sites
Its no different. Deposits are guarenteed in this country.

The sad truth is that most people have little in savings- so it would be possible to reduce this 'guarantee' fairly substantially and still leave most of the population unscathed.

I used to think the way you do- but I've seen things over the past few years that I never even imagined possible- Bank runs, billion dollar bailouts, the euro now possibly in danger of collapse- so my faith in the 'system' is rather thin these days.

One thing is clear however- the people in charge would not hesitate for a second to plunder everything you own to preserve their status quo for even a short time longer.

So that deposit guarantee might not be worth as much as you think.

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.

  • 335 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.