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What Would It Take To Admit You Are Wrong?


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The thought of a MWE'd up Boomer getting a free-ride on my hard-earned savings and a banker clinking wine glasses together on a cruise at my expense keeps me from taking out the mortgage I could currently afford.

:lol:

No retreat, no surrender.

"We're not retreating, we're advancing, towards future victory!" - Sarge. Red vs Blue.

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House prices have halved where I live since the peak of the madness so things have played out as I figured. Now looking to buy, having saved myself from a massive amount of negative equity and decades of debt servitude by listening to this site in 2007.

I do feel sorry for people waiting for affordable housing in the London/SE region where all the 'stimulus' has gone by virtue of its proximity to the money fountain. Who could have believed exactly how far the government were going to go to distort the monetary system to support asset prices. Plus there is going to be a hell of price to pay the piper on what they have done.

This is similar to my position, but I bought a great place in late summer 2012. I suspect the price was 60% down from the peak here in NI and I'm very happy with where we have now made our home.

As for predicting what will happen, how can you when you have thugs in charge who will take whatever they like, then give it to anyone they like? Sure, people may eventually say 'f*ck it' and down tool, but if they screw people slowly enough, maybe they won't even notice.

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So, what about you?  What are your stops?

Trading stops are largely a instrument of self delusion. If they really worked then noone would ever make a significant loss on any market. But they don't work, the reason being that stops are essentially a volatility filter which can only work if you accurately gauge the level of movement that separates trend from volatility. Its as likely to dump just before a recovery as it is to stop further loss.

The housing market is no different, noone can tell whether current movements are volatility or trend, will things carry on as they, will they suddenly reverse ?, noone knows so you cant determine a meaningful stop position.

Edited by goldbug9999
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So, it is summer 2013. 6 years from peak, 4 years from the nominal bottom. We've been treading water at 160k for how long? And those interest rate rises, where the ****** are they exactly? The hyperinflation? Need I go on.

My point is this - I used to believe many of the tropes on this forum, that markets are in control of interest rates, that eventually there would be a Great Reckoning. Well, 2007/08 happened, there was a crash. 30% off in real terms is nothing to sniff at, but unfortunately it still leaves most of the young trapped. It was just the froth. Then there was massive government intervention. Couldn't last I thought.

I started doing some trading (mildly profitable, but not enough to justify the time/effort/stress involved). One thing I learned was the importance of stops. If you take a position in the market, you should have a view as to what is happening. You should also have a view that if the market moves in an unexpected direction sufficiently far, you are wrong and need to rethink your position. Stops save you money in the long term and prevent delusional, wishful thinking.

When by 2011, it was pretty clear things were being held together, I had to rethink. I was being mentally stopped out, so to speak. How exactly did the monetary system work? Clearly there were gaping holes in my knowledge because the model I had in my head did not reflect the reality I was seeing. My research led me in a few wrong directions, but I know broadly understand that interest rates will remain low and the wealth transfer of the Blair years will now be set in stone.

How will I know I was wrong? Ok, if I see interest rates rises due to external pressure and not government policy, I'll know I was wrong. If I see the pound fall below 1.30 to the dollar, I'll know I was wrong. If a sustained economic recovery occurs (2% - 3% growth for 2 -3 years) without an increase in investment as a proportion of GDP, I'll know I was wrong. However there could be improvements in GDP due to re-leveraging of the population via Help to Buy and their ilk, but I think that the deleveraging as a whole is not far enough along for this to work other than as a short term jolt. Osborne will do his best, because with 2 years to go, he is out of options.

So, what about you? What are your stops? At what point would you know you are wrong and need to re-think? There are a lot of people on here with their "when interest rates rise" who are starting to sound like some nut on the mountaintop talking about "when Jesus returns". Let's have some concrete numbers and/or dates. What's your view and what are your indicators to prove you are wrong and need to re-think?

When people can put a flat or house on the market, at the high bubble price that they want, and have a line of people turn up to view, as used to happen in "prime" postcodes in Edinburgh, then go to sealed bids to see who the lucky buyer is going to be, and for this to be replicated up and down the land with people able to trade up/downsize or cash in at the money they want and in a short timescale (i.e the house isn`t on the market for three years) IMO until this happens ( and it isn`t going to) we are still at crash speed with desperate attempts to improvise braking mechanisms..

Edited by dances with sheeple
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If someone tells me to buy a toilet for £300,000 because I won't ever get a better price I won't buy it 'cos it's still a toilet.

Osbourne and co can try and force my hand as much as they like and maybe they will force me to spend my money, but if prices don't come down in this country i'll buy where they have.

I still believe a crash is on though. Property prices are ludicrous.

I don't feel like I've lost because I've always been priced out.

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This site accurately predicted the death of the housing market- what it did not predict was the life support machine that now operates 24/7 in the form of QE, Zirp, help to buy ect.

The question is almost an existential one- is a man who continues to breathe only because he is wired up to a machine that supports his vital functions alive- or dead?

So the accurate answer to the question is that we are neither right nor wrong because the market for which our predictions were made no longer exists- it has been replaced with a simulacrum of that market- a travesty in which the only variables that matter are the words that issue forth from the mouth of the chairman of the Federal reserve- Ben Bernanke is the market now- nothing else matters.

The trick that we never saw coming was not the rigging of the market-that was anticipated- it was the wholesale evisceration of that market and it's replacement with a simulation in which price discovery cannot happen because there is no longer any way to establish even the true value of the money that we would use to measure that price with.

Help to buy is the ultimate manifestation of this process- in attempting to reprice risk in the housing market Osbourne will instead make that risk impossible to calculate. In the future the price of houses will be inextricably bound to the political machinations of power- they will rise or fall on the prevailing view concerning when-or if- state support for buyers will be tapered or removed.

Edited by wonderpup
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How?

"Deprecating assets" - please don't get him started. For my part, I'm stuck in London for the foreseeable future, and I find it really hard to imagine or comprehend what it's like outside the SE, in terms of how this is playing out. I doubt most people feel richer or more secure for lower accommodation costs.

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This probably sounds a little daft but it is actually true that the Bank of England data series IUMTLMV (Monthly interest rate of UK monetary financial institutions (excl. Central Bank) sterling standard variable rate mortgage to households (in percent) not seasonally adjusted) continues to track upwards at about 20 basis points a year. I can't be bothered to re-graph it, but essentially the world's most pathetic trend continues...the June 2013 'print' was an eye watering 4.38%

world+most+pathetic+trend.png

In 10 short years SVRs will be back at 6.5%. Hold on to your hats!!!!

That chart's a bit misleading. From 2001 to the middle of 2005 the average SVR was around 6.0% off a 10yr swap rate of 4.0-4.5%. It's QE that's been responsible for supressing gilt yields below 2%, enabling SVRs of ~4%. Can we look forward to another ten years of money printing? Not without a sovereign debt downgrade or three, automatically lifting the cost of borrowing.

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"Deprecating assets" - please don't get him started. For my part, I'm stuck in London for the foreseeable future, and I find it really hard to imagine or comprehend what it's like outside the SE, in terms of how this is playing out. I doubt most people feel richer or more secure for lower accommodation costs.

In part depreciating assets, but mostly opportunity cost.

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Sure, the pendulum will eventually swing back. One day the sheer number of renters will create an irresistible political force to repeal the current landlord friendly legislation, which in turn will trigger material house price declines. But that day is at least twenty years away.

Let's face it, the general expectation of this forum has simply been wrong.

That's because the rules of the game have been changed. Those who say repeated can kicking and 0% rates will last 20 years may well be right. 20 years is all too late for me, and a lot here I would presume. This is a good thread. Today feels rather like it did on HPC forums in 2006 just before the crash started. It was looking hopeless and we were looking even more like mad doomongers.

Edited by Spoony
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In the future the price of houses will be inextricably bound to the political machinations of power- they will rise or fall on the prevailing view concerning when-or if- state support for buyers will be tapered or removed.

They probably will keep 'help to buy' going until the housing market tanks and 'buying a house' will once again become dirty words. Then nobody will be touching it with a bargepole and it will make no difference if they cancel it or not. How many years until then though who knows.

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That chart's a bit misleading. From 2001 to the middle of 2005 the average SVR was around 6.0% off a 10yr swap rate of 4.0-4.5%. It's QE that's been responsible for supressing gilt yields below 2%, enabling SVRs of ~4%. Can we look forward to another ten years of money printing? Not without a sovereign debt downgrade or three, automatically lifting the cost of borrowing.

The data is just the data, so with respect, the chart can't be misleading. I wanted to say in my defence that I was offering the chart without analysis, but I can see that's not quite true, however, I was only joking about the trend being sustained for ten years!

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This site accurately predicted the death of the housing market- what it did not predict was the life support machine that now operates 24/7 in the form of QE, Zirp, help to buy ect.

The question is almost an existential one- is a man who continues to breathe only because he is wired up to a machine that supports his vital functions alive- or dead?

So the accurate answer to the question is that we are neither right nor wrong because the market for which our predictions were made no longer exists- it has been replaced with a simulacrum of that market- a travesty in which the only variables that matter are the words that issue forth from the mouth of the chairman of the Federal reserve- Ben Bernanke is the market now- nothing else matters.

The trick that we never saw coming was not the rigging of the market-that was anticipated- it was the wholesale evisceration of that market and it's replacement with a simulation in which price discovery cannot happen because there is no longer any way to establish even the true value of the money that we would use to measure that price with.

Help to buy is the ultimate manifestation of this process- in attempting to reprice risk in the housing market Osbourne will instead make that risk impossible to calculate. In the future the price of houses will be inextricably bound to the political machinations of power- they will rise or fall on the prevailing view concerning when-or if- state support for buyers will be tapered or removed.

Good post, but IMO unless money, as either wages or credit, goes directly to the sheeple the housing market is finished. When people start dying and downsizing, or rates go up, prices will drop. Whether the sentiment is still there to blow another bubble if the wages/credit taps came on I don`t know, but the sheeple are probably still stupid enough? Realistically the wages/credit is not coming back for the ordinary man/woman IMO.

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They probably will keep 'help to buy' going until the housing market tanks and 'buying a house' will once again become dirty words. Then nobody will be touching it with a bargepole and it will make no difference if they cancel it or not. How many years until then though who knows.

Got over the depression that started that other mega thread then? :lol:

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When the "help to buy", sorry, that should be "help to sell" scheme was mooted and then moved towards launch.

My assertion that property would fall in price was largely predicated on the markets.

There are no markets. The BoE can buy all the government debt.

The government will prop up property prices until a currency collapses.

It might well be that GDP basically collapses.

And although in theory that could come relatively quickly, it might not happen for about five to twenty years.

I'd recommend younger potential buyers look overseas for their futures.

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When the "help to buy", sorry, that should be "help to sell" scheme was mooted and then moved towards launch.

My assertion that property would fall in price was largely predicated on the markets.

There are no markets. The BoE can buy all the government debt.

The government will prop up property prices until a currency collapses.

It might well be that GDP basically collapses.

And although in theory that could come relatively quickly, it might not happen for about five to twenty years.

I'd recommend younger potential buyers look overseas for their futures.

They can`t bring volumes up, or they would have done it by now, many people are going to have to look their losses square in the eye, and when that happens the Ponzi ends.

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Scepticius got a lot of flack on the other thread, but he has a coherent view of what is happening and his predictions have broadly come to pass. Red Knight is another poster who is routinely correct, yet often maligned.

I think many on here simply don't want to face up to being wrong. I don't like the transfer of wealth, it doesn't benefit me, but it is what it is.

I've got a deep mistrust of some of the positions held by some individuals here. It doesn't or hasn't benefited you?

So you won this money? Unexpected mega-bonus from work perhaps? Some generous personal injury compensation?

Mrs Fafa and I have been immensely fortunate in recently coming into a sufficient sum of money that after adding to our own savings would mean that we would be able to buy a 3 or 4 bed house in either the UK or Japan (Mrs Fafa hails from the land of the rising sun) cash and start a family. In either country we believe that we would be able to generate an income to live comfortably and raise a child. This leaves us a quandary - which country would be better to live in long term - Japan or the UK?

Whatever. With Scepticus, for those of us who desire to see lower house prices, he suggests we just want to take advantage of equity poor owners, and asks what sort of people that makes us. There are overly older equity rich and over-stretched multiple property owners in the equation, that a HPC would level out. I will find it satisfying to be able to afford a house, when the fall to lower prices, and non of scepticus' guilt tripping changes that.

At best, the HPC fantasy seems to me, at best, to be a mechanism for swapping places with the worst-off of the owner occupier sector. Hardly a mechanism for life satisfaction!

On the other hand he seems to suggest non-owners should acclimatise ourselves to the new reality of high house prices.

This site is well overdue a frank conversation about the feeling of being poor, based on a hard look at what being poor has meant in the past rather than the usual conspiracy-doomed-to-fail meme. Its a difficult thing to think about and discuss, but probably healthier in the long run (to both sanity and wealth) than the usual "when-I-get-richer" fantasies.
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My missus made me admit I was wrong. We STR from London to West Mids and rented for a year but bought 3 years ago. We got a smaller house than we wanted as I was convinced house prices would crash sharply but nothings happened in the areas we are interested in.

Interestingly after not really thinking about house prices for ages I'm back into it as now as I'd rather move than have an extension/loft conversion. My missus thought my HPC obsession was over when we bought but its back again ha ha.

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I've got a deep mistrust of some of the positions held by some individuals here. It doesn't or hasn't benefited you?

So you won this money? Unexpected mega-bonus from work perhaps? Some generous personal injury

Well spotted.  I am not going to tell you how we got that money or the proportion that represents of the whole, it is not your concern.  However I will state that we do not and never have owned property anywhere in the world and have no partial shares in property or wotnot either. I have previously stated that we are currently entirely in cash, mix of GBP/JPY.  I would argue that my cash position makes what I am arguing against my interest.  Having that cash pile, wouldn’t I benefit from increased interest rates and a house price crash?  

Having said that, I was hesitant to answer this personal attack as I feel it deviates from the point of the thread.  Even if you think Scepticius and I are VIs, I don’t see why it is relevant.  I have my position and view, as does Scepticius, and we have argued it accordingly.  The fact that the current situation is distasteful is not relevant to the truth.  I am not coming on here like Sibley or LondontoManchester, goading people or making airheaded assertions with no evidence.  

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Thanks for all the responses so far, I think it has been an interesting thread.  I think some people don’t understand quite what I am getting at.  I am not saying that everyone on this forum is wrong.  Indeed, this site and forum has got a lot of things right - the financial crisis caused by the mortgage market for one, the steep drop in house prices being another.  Few in 2006 agreed with that position, let alone 2003 when this place started.  However due to the efforts of the government(s) housing has not fallen as far and as fast as predicted and remains unaffordable for many.  A lot of people on here continue to assert that interest rates will rise and the crash will speed up.

My point therefore is how do you verify your beliefs?  If you don’t have a falsifiable view of what is happening, you just have a religion.  For example Bruce Banner gives a good example, he states that he believes there will be 20 - 30% nominal falls by 2020 - this is clearly falsifiable, we are going to know if he is correct in due course.  If he is wrong he has further stated he still considers himself to be in a good position as his cash pile gives him an adequate income to cover housing costs.  A lot of people criticise Bruce, but he has nailed his colours to the mast and I respect him for that.  Other posters such as RK, Tamara, even Realistbear for all his faults and others have done so.  Even though it pains me as a uberbear on gold I’ll even mention Errol,  though I feel he has backtracked significantly from his gold to the moon schtick.  I don’t agree with all of them, but it is easy to snipe.  RK and Realistbear have been/were really laid into at points but have persisted in offering a consistent world view.  My point is do you have a real view or are you simply hoping?  

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Thanks for all the responses so far, I think it has been an interesting thread.  I think some people don’t understand quite what I am getting at.  I am not saying that everyone on this forum is wrong.  Indeed, this site and forum has got a lot of things right - the financial crisis caused by the mortgage market for one, the steep drop in house prices being another.  Few in 2006 agreed with that position, let alone 2003 when this place started.  However due to the efforts of the government(s) housing has not fallen as far and as fast as predicted and remains unaffordable for many.  A lot of people on here continue to assert that interest rates will rise and the crash will speed up.

My point therefore is how do you verify your beliefs?  If you don’t have a falsifiable view of what is happening, you just have a religion.  For example Bruce Banner gives a good example, he states that he believes there will be 20 - 30% nominal falls by 2020 - this is clearly falsifiable, we are going to know if he is correct in due course.  If he is wrong he has further stated he still considers himself to be in a good position as his cash pile gives him an adequate income to cover housing costs.  A lot of people criticise Bruce, but he has nailed his colours to the mast and I respect him for that.  Other posters such as RK, Tamara, even Realistbear for all his faults and others have done so.  Even though it pains me as a uberbear on gold I’ll even mention Errol,  though I feel he has backtracked significantly from his gold to the moon schtick.  I don’t agree with all of them, but it is easy to snipe.  RK and Realistbear have been/were really laid into at points but have persisted in offering a consistent world view.  My point is do you have a real view or are you simply hoping?  

30% to 40% actually. Followed by fifteen or twenty years of bouncing along the bottom, Japanese style.

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Thanks for all the responses so far, I think it has been an interesting thread.  I think some people don’t understand quite what I am getting at.  I am not saying that everyone on this forum is wrong.  Indeed, this site and forum has got a lot of things right - the financial crisis caused by the mortgage market for one, the steep drop in house prices being another.  Few in 2006 agreed with that position, let alone 2003 when this place started.  However due to the efforts of the government(s) housing has not fallen as far and as fast as predicted and remains unaffordable for many.  A lot of people on here continue to assert that interest rates will rise and the crash will speed up.

My point therefore is how do you verify your beliefs?  If you don’t have a falsifiable view of what is happening, you just have a religion.  For example Bruce Banner gives a good example, he states that he believes there will be 20 - 30% nominal falls by 2020 - this is clearly falsifiable, we are going to know if he is correct in due course.  If he is wrong he has further stated he still considers himself to be in a good position as his cash pile gives him an adequate income to cover housing costs.  A lot of people criticise Bruce, but he has nailed his colours to the mast and I respect him for that.  Other posters such as RK, Tamara, even Realistbear for all his faults and others have done so.  Even though it pains me as a uberbear on gold I’ll even mention Errol,  though I feel he has backtracked significantly from his gold to the moon schtick.  I don’t agree with all of them, but it is easy to snipe.  RK and Realistbear have been/were really laid into at points but have persisted in offering a consistent world view.  My point is do you have a real view or are you simply hoping?  

My prediction by 2020 is house prices down by 10% MAX in GBP. Down by 50% against GLD, AUD, NZD, CHF, etc etc etc

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  • 415 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%



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