Am I Being Unreasonable To Feel Seething Resentment Towards Those Who Profited From The House Price Bubble

[Bloo Loo]

There is a bizzare paradox at work here..

When (wage) inflation and interest rates were at 10% and 12%, going for a mortgage at the edge of affordability was a sensible choice.

Now (wage) inflation and interest rates are at 2% and 4%, going for a mortgage at the edge of affordability is inviting debt slavery..

Low IRs invite debt slavery.

Its not a paradox.

The issue is that the asset purchased when mortgage rates are at their lowest makes the ability borrow at its max and therefore the price at its highest in the cycle. If mortgages cannot get much cheaper then prices are only going one way.....

[KingBingo]

No it isn't. It is to prevent those who can just because they can doing what they can regardless of the effect of their actions on the wider society.

To summarise your position:

The creation of 125% mortgages, liar loans and high income multiple loans had nothing to do with the deregulation of the mortgage industry that occurred in the 1980's?

Yes/no?

Are you trying to be obtuse or is the Guardian brainwashing really that good.

What you are suggesting is that one thing happened, that lead to another thing happening which caused the crash. However as I have actually clearly pointed out to you the first thing that you think happened (deregulation) did not happen at all, quite the contrary there is significantly more financial regulation today than in the early 80's. Massively massively so, I know I've worked in that industry during.

If you want to argue that increased regulation lead to the crash (which actually it did through loose money and moral hazard) then be my guest. But you cannot say that one thing lead to another when that first thing is just a total fabrication of the left.

[Bloo Loo]

Are you trying to be obtuse or is the Guardian brainwashing really that good.

What you are suggesting is that one thing happened, that lead to another thing happening which caused the crash. However as I have actually clearly pointed out to you the first thing that you think happened (deregulation) did not happen at all, quite the contrary there is significantly more financial regulation today than in the early 80's. Massively massively so, I know I've worked in that industry during.

If you want to argue that increased regulation lead to the crash (which actually it did through loose money and moral hazard) then be my guest. But you cannot say that one thing lead to another when that first thing is just a total fabrication of the left.

there may be more regulations, but on the last PMs orders...there was LESS regulation.

[Deckard]

Page 18 of the MN thread.

For those wondering about future price trends. I've just read an amazing post on another forum which I think summarises my view that prices are about to go tiiiiiiiiiiiiiiiiiiiiiiiiiiimber in a much better way than I could have put it:

Apologies for the plagiarism for the original post see: http://www.housepricecrash.co.uk/forum/index.php?showtopic=177517&st=90

Come on guys, own up. Who's posting as YellowWellies?

[KingBingo]

So King Bingo - try telling me that such regulatory changes were not behind the predicament we find ourselves in.

And..... during that period new house building slumped dramatically, because of planning restrictions the most draconian in the world (possibly barring Australia)

Its easy to pick one aspect in isolation. If you want to talk about 'where it all started' why not pick dropping of the gold standard

[campervanman]

And..... during that period new house building slumped dramatically, because of planning restrictions the most draconian in the world (possibly barring Australia)

Its easy to pick one aspect in isolation. If you want to talk about 'where it all started' why not pick dropping of the gold standard

But your point was that there was no deregulation when there was.

[KingBingo]

But your point was that there was no deregulation when there was.

I'm not suggest every fecking line of it is identical, but regulation of financial services has increased dramatically.

You are being deliberately obtuse.

[Bland Unsight]

Of course its not effective. Regulation never works, only a free market works and we don't have one of those.

The point of regulation is to create jobs, and make politicians feel important.

Are you trying to be obtuse or is the Guardian brainwashing really that good.

What you are suggesting is that one thing happened, that lead to another thing happening which caused the crash. However as I have actually clearly pointed out to you the first thing that you think happened (deregulation) did not happen at all, quite the contrary there is significantly more financial regulation today than in the early 80's. Massively massively so, I know I've worked in that industry during.

If you want to argue that increased regulation lead to the crash (which actually it did through loose money and moral hazard) then be my guest. But you cannot say that one thing lead to another when that first thing is just a total fabrication of the left.

Picking up on Greg Bowman's point - you could take most of these posts and substitute capitalism for regulation and Communism for free markets and you've have classic agitprop.

No disrepect intended but market fundamentalism is getting a little implausible these days. We thought we could keep the global financial markets like a tame pet somehow risklessly adding efficiency. Problem is that a 500 pound gorilla that's a little avaricious and myopic is a lousy pet.

KingBingo - do you really see the development of a shadow banking system of off-balance sheet SPVs stripping all meaning from the financial statements of all major banking groups as "regulation", or are you arguing that without interference from regulators Lehmans would have told the market that they were undercapitalised and deep into bubble US commercial property and the markets would just have kept lending them more and more money anyway?

[Bland Unsight]

The minutae of regulation which it seems you are involved in - the box ticking variety, demanded since Labour gave FSA the controls has undoubtedly increased in terms of work conducted. But what you seem to miss is the big picture - the 'macroprudential regulation'.

+1

I've worked on teams auditing the FSA and SEC filings of big UK banks and I assure you, if that kind of work did anything to prevent even outright fraud let alone a little massaging of figures we wouldn't have had Enron.

Just read this superb work by Gordon Kerr of the Cobden Partners, The Law of Opposites: Illusory Profits in the Financial Sector.

Accounts are bereft of meaning, audit work is weak as sh!t and the regulators were supine in the face of risks that you could have discovered in a minute by clicking on the mortgages tab on moneysavingexpert.

I'm sad that a lot of people have wasted a decade of their lives filling in or checking out fictional accounts for zombie banks, but what happened happened. It's time to start picking up the pieces.

Edited April 16, 2012 by ChairmanOfTheBored

[rantnrave]

We were all at the same party as Kirstie though weren't we.

[campervanman]

I'm not suggest every fecking line of it is identical, but regulation of financial services has increased dramatically.

You are being deliberately obtuse.

And as the op says you are missing the big picture. What happened to the mortgage market in the UK since the 1980's was the result of deregulation that occurred in the 1980's under the THATCHER government. 125% mortgages,liar loans and high income multiples would and could not have become commonplace otherwise.

[winkie]

The minutae of regulation which it seems you are involved in - the box ticking variety, demanded since Labour gave FSA the controls has undoubtedly increased in terms of work conducted. But what you seem to miss is the big picture - the 'macroprudential regulation'.

I agree...the minor incidental time consuming almost waste of time FSA regs were increased....the major factors that should have been manged and controlled more effectively a blind eye was taken, they were allowed to continue for obvious growth reasons....now what we are seeing is the fallout of those decisions.

[campervanman]

+1

I've worked on teams auditing the FSA and SEC filings of big UK banks and I assure you, if that kind of work did anything to prevent even outright fraud let alone a little massaging of figures we wouldn't have had Enron.

Just read this superb work by Gordon Kerr of the Cobden Partners, The Law of Opposites: Illusory Profits in the Financial Sector.

Accounts are bereft of meaning, audit work is weak as sh!t and the regulators were supine in the face of risks that you could have discovered in a minute by clicking on the mortgages tab on moneysavingexpert.

I'm sad that a lot of people have wasted a decade of their lives filling in or checking out fictional accounts for zombie banks, but what happened happened. It's time to start picking up the pieces.

But to pick up the pieces requires a recognition of what went wrong. It seems obvious to me that some people close to the problem are still in denial of what went wrong.

[Miss Madam]

Page 18 of the MN thread.

Come on guys, own up. Who's posting as YellowWellies?

I'm YellowWellies. I read here daily but don't post a lot as you guys can be pretty misogynistic. But yes this is what a preggers HPCer looks like. Now who was Redshields spouting that conspiracy theory stuff trying to derail the thread? Hamish? Sibley?

[rantnrave]

I'm YellowWellies. I read here daily but don't post a lot as you guys can be pretty misogynistic. But yes this is what a preggers HPCer looks like. Now who was Redshields spouting that conspiracy theory stuff trying to derail the thread? Hamish? Sibley?

Great job btw

<hugz>

I've taken a similar, non-confontational approach with the folk over at EAToday.

[tomandlu]

I'm YellowWellies. I read here daily but don't post a lot as you guys can be pretty misogynistic.

Can't think what you're talking about - I have never been the target of misogyny on these boards. Bloody women - just like my wife - always moaning about something...

BTW nice posts on that thread from you - almost disappointed to find out you lurk around here, as it would be nice to think that that level of awareness was more general...

[cybernoid]

I'm YellowWellies.

Ive been following the thread, thanks for not being a mental.

I thought about signing up myself but you're making all the points so theres no need.

There do look to be two type there, those that bought and don't see what the fuss is about, 'hey i worked hard, work=reward therefore stop whining' ; and 'what the hell is going on you dont know youre born' who couldnt buy due to their birthdate.

I really don't think the luckier ones will ever 'get it', they just don't know any better... and any attempt to explain it to them is seen as sour grapes. Difficult to dislocate work from reward for most, the point they won't ever accept is if they did exactly the same, worked just as hard, but 10 years later, the result would be completely different. They will NEVER accept that.

[GordonBrownSpentMyFuture]

I'm YellowWellies. I read here daily but don't post a lot as you guys can be pretty misogynistic. But yes this is what a preggers HPCer looks like. Now who was Redshields spouting that conspiracy theory stuff trying to derail the thread? Hamish? Sibley?

I honestly wish more women would post here because then it would likely be less so. We definitely need more balance here from time to time.

That mumsnet thread has been a fascinating read. Redshield started off well trying to raise awareness but unfortunately descended into "nutter" territory by just posting incessantly and derailing the thread. Hopefully it'll get back on track. There are too many good comments, and the issues raised are too important, for people to dismiss it as just another HPC hijacked tinfoil-hat thread.

If nothing else, it was refreshing to read the experiences of others, on a forum other than this, that are so familiar it hurts. Two generations now have been royally fkd over and our voice is growing and spreading it would seem. Good. The sooner this sentiment and understanding goes mainstream the better it will be for all of us.

[eric pebble]

I honestly wish more women would post here because then it would likely be less so. We definitely need more balance here from time to time.

That mumsnet thread has been a fascinating read. Redshield started off well trying to raise awareness but unfortunately descended into "nutter" territory by just posting incessantly and derailing the thread. Hopefully it'll get back on track. There are too many good comments, and the issues raised are too important, for people to dismiss it as just another HPC hijacked tinfoil-hat thread.

If nothing else, it was refreshing to read the experiences of others, on a forum other than this, that are so familiar it hurts. Two generations now have been royally fkd over and our voice is growing and spreading it would seem. Good. The sooner this sentiment and understanding goes mainstream the better it will be for all of us.

I've been trying to get people to understand this for over a decade - and for 8+ years here on hpc.

I find it all so depressing now - I've sort of given up.

Edited April 17, 2012 by eric pebble

[Miss Madam]

Ive been following the thread, thanks for not being a mental.

I thought about signing up myself but you're making all the points so theres no need.

There do look to be two type there, those that bought and don't see what the fuss is about, 'hey i worked hard, work=reward therefore stop whining' ; and 'what the hell is going on you dont know youre born' who couldnt buy due to their birthdate.

I really don't think the luckier ones will ever 'get it', they just don't know any better... and any attempt to explain it to them is seen as sour grapes. Difficult to dislocate work from reward for most, the point they won't ever accept is if they did exactly the same, worked just as hard, but 10 years later, the result would be completely different. They will NEVER accept that.

That's an excellent point... I am going to make it on MN if you don't mind?

[bmf]

I've been trying to get people to understand this for over a decade - and for 8+ years here on hpc.

I find it all so depressing now - I've sort of given up.

They get it. They just don't want to face it. I had a conversation with a guy the other day. I only spoke about house prices with him but I could have also mentioned his unfunded final salary pension scheme but he got annoyed before that so I left well alone!

He would not discuss numbers, was not interested in price to wage multiples or any other information. He simply said that he had worked hard and so should I. They don't want to face the fact that they are living off the backs of others. It's collective denial.

[rantnrave]

Ive been following the thread, thanks for not being a mental.

I thought about signing up myself but you're making all the points so theres no need.

There do look to be two type there, those that bought and don't see what the fuss is about, 'hey i worked hard, work=reward therefore stop whining' ; and 'what the hell is going on you dont know youre born' who couldnt buy due to their birthdate.

I really don't think the luckier ones will ever 'get it', they just don't know any better... and any attempt to explain it to them is seen as sour grapes. Difficult to dislocate work from reward for most, the point they won't ever accept is if they did exactly the same, worked just as hard, but 10 years later, the result would be completely different. They will NEVER accept that.

Of course, a lot (note, not all) of the older folk will say that rather than saving for a deposit, today's younger folk waste their money on things like overseas holiday, ignoring the fact that such trips are far cheaper than they were 30 years ago (and cheaper than holidaying in the UK).

Are the Boomers so financially prudent themselves? When given the chance to withdraw equity from their property, many of them p*ssed it up on the wall on frivolities like cruises and flash cars. Now that house prices are no longer rising across much of the country, they are hoping (needing?) to pass that debt on to their children's generation.

EDIT TO ADD: Of course, a decade of dinner table discussions about how wonderful rising house prices are is now coming home to roost, with many 25 year-old showing no signs of moving out and grandkids in very short supply.

Edited April 17, 2012 by rantnrave

[campervanman]

They get it. They just don't want to face it. I had a conversation with a guy the other day. I only spoke about house prices with him but I could have also mentioned his unfunded final salary pension scheme but he got annoyed before that so I left well alone!

He would not discuss numbers, was not interested in price to wage multiples or any other information. He simply said that he had worked hard and so should I. They don't want to face the fact that they are living off the backs of others. It's collective denial.

15% of my salary went into my final salary pension plan for 31 years. Does that mean I am living off the backs of others? I agree with you about house price to income multiples though.

[dances with sheeple]

They get it. They just don't want to face it. I had a conversation with a guy the other day. I only spoke about house prices with him but I could have also mentioned his unfunded final salary pension scheme but he got annoyed before that so I left well alone!

He would not discuss numbers, was not interested in price to wage multiples or any other information. He simply said that he had worked hard and so should I. They don't want to face the fact that they are living off the backs of others. It's collective denial.

With so many in denial and just ignorant,there is more scope for a bigger panic when a large mass of people finally realise that the longer they wait to sell, the more they are losing. We are not there yet, but getting close, Euro implosion must be the event that finally says "rates up,lending down"?

[bmf]

15% of my salary went into my final salary pension plan for 31 years. Does that mean I am living off the backs of others? I agree with you about house price to income multiples though.

Yes if you get say 30% for 20 years. Defined benefit is there because it doesn't add up. If it added up you'd get defined contribution.

edit: i'm putting in 15% but unfortunately for my generation they want my pension to add up. What a shame for me.

Edited April 17, 2012 by bmf