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Did I Miss Something?

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A few months ago it was all economic doom and gloom in UK plc. All of a sudden FED announces potential tapering. US 10yr treasury yields are increasing its looking ever likely that US interest rates will continue climbing, which you can interpret one way or another the US housing market was allowed to crash and repair, the real economy is recovering better, the US banks are better recapitalised. All points to US is much better poised to sustain higher interest rates thus attracting investment.

All of a sudden UK plc swings magically from gloom to best prosperity ever thanks to what appears to be a cordinated PR campaign. UK - housing crash never allowed to take place really in nominal terms, banks still badly undercapitalised and massively exposed to the EU, massive debts public or private, unfunded social obligations. Seems to me that without the PR good news investors would think the US a better place to put their money and withdraw from UK thus making our situation truely dire.

Oh and our recovery is basically using taxpayers money to fund another housing boom to help the banks. Yet if gilts continue to climb interest rates (should) go up borrowers get into difficulties banks repossess but what good is that really for them, so BoE steps in to print more to drive gilts down again, thus weakening sterling.

And yet Sterling has made some decent gains in the last few weeks against the dollar! Why? Did I miss something about the real state of the UK economy?

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We are leaving the outlook improves stage - Next expect to see reversal of Help To Sell MK2 (Policy Makers Dither) and the market sediment will change to sell off.

These are all just smaller cycles in part of a larger overall cycle.

20120403_you%20are%20here_0.png

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A few months ago it was all economic doom and gloom in UK plc. All of a sudden FED announces potential tapering. US 10yr treasury yields are increasing its looking ever likely that US interest rates will continue climbing, which you can interpret one way or another the US housing market was allowed to crash and repair, the real economy is recovering better, the US banks are better recapitalised. All points to US is much better poised to sustain higher interest rates thus attracting investment.

All of a sudden UK plc swings magically from gloom to best prosperity ever thanks to what appears to be a cordinated PR campaign. UK - housing crash never allowed to take place really in nominal terms, banks still badly undercapitalised and massively exposed to the EU, massive debts public or private, unfunded social obligations. Seems to me that without the PR good news investors would think the US a better place to put their money and withdraw from UK thus making our situation truely dire.

Oh and our recovery is basically using taxpayers money to fund another housing boom to help the banks. Yet if gilts continue to climb interest rates (should) go up borrowers get into difficulties banks repossess but what good is that really for them, so BoE steps in to print more to drive gilts down again, thus weakening sterling.

And yet Sterling has made some decent gains in the last few weeks against the dollar! Why? Did I miss something about the real state of the UK economy?

No, you didn't miss anything. Strip away the flim-flam and you have the weakest ever recovery from recession in the US and UK, soaring asset prices, unservicable sovereign debts and large parts of the global economy in or near recession. The central bank mafia has blown up the world again now Bernanke is reluctantly having to taper to avoid making the mess even worse.

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We are leaving the outlook improves stage - Next expect to see reversal of Help To Sell MK2 (Policy Makers Dither) and the market sediment will change to sell off.

These are all just smaller cycles in part of a larger overall cycle.

20120403_you%20are%20here_0.png

Great image. This is our economy until the markets say enough.

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We are leaving the outlook improves stage - Next expect to see reversal of Help To Sell MK2 (Policy Makers Dither) and the market sediment will change to sell off.

These are all just smaller cycles in part of a larger overall cycle.

20120403_you%20are%20here_0.png

Yep..

It's like a giant snowball rolling down hill on a summer's day.

It gets a little smaller with every turn...

We need more snow.

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On my recent travels about Amercia it has become obvious to me just how little even the educated Americans responsible for investments etc know about the true economic situation in the UK. If and when the foreign investors wake up and realise this we really are in the S**t. I think our MP's and VI's know this and have orchestrated this cordinated PR campaign to get the economy trundling forward again. Once the summer sun fades and retail figures drop then we shall see how good this "recovery" really is. Like many I cannot wait for the hopefuly inevitable bust of house prices but wonder what the social implications are going to be!

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Like many I cannot wait for the hopefuly inevitable bust of house prices but wonder what the social implications are going to be!

Time to stop worrying about other people, as one of the main concerns of a HPC, and put yourself first.

That thread a while ago; 'Young people get angry; Granddad and Grandma are mugging you'.

Can't recall everything in it, but boomers and babyboomers in so many areas proud of their investments and wealth-gain had, owning fairly ordinary homes they believe worth £300,000 - £900,000. Who don't want to lose value.

Whilst younger productive people only get the brunt of renting and crumbs of being offered Help-To-Buy. Others of course choice to take debt in expectation of no crash, and they'll get similar HPI because demand outweighs supply.

If the social implications are boomers and baby-boomers see some of their incredible HPI gains fall back, and loudly moan and complain, then I welcome it. A hard lesson is needed about taking on too much debt, and trying to make asset values rise and rise, versus enterprise and productive business.

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Like many I cannot wait for the hopefuly inevitable bust of house prices but wonder what the social implications are going to be!

Affordable housing for the young, investment in the real economy rather than damaging rent seeking, a minority of financially irresponsible debtors have to move out of houses they were lucky to experience in the first place... etc

the horror, the horror

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Time to stop worrying about other people, as one of the main concerns of a HPC, and put yourself first.

That thread a while ago; 'Young people get angry; Granddad and Grandma are mugging you'.

Can't recall everything in it, but boomers and babyboomers in so many areas proud of their investments and wealth-gain had, owning fairly ordinary homes they believe worth £300,000 - £900,000. Who don't want to lose value.

Whilst younger productive people only get the brunt of renting and crumbs of being offered Help-To-Buy. Others of course choice to take debt in expectation of no crash, and they'll get similar HPI because demand outweighs supply.

If the social implications are boomers and baby-boomers see some of their incredible HPI gains fall back, and loudly moan and complain, then I welcome it. A hard lesson is needed about taking on too much debt, and trying to make asset values rise and rise, versus enterprise and productive business.

Totally agree Venger. Far too much sympathy around! Getting back to reality is going to hurt a lot of people. The same people who were smug as ****** on the way up and didn't give a toss about those who chose not to buy into the obvious madness. There is no pain free solution and I'm sick of suffering. Therefore, I simply have to wish others do instead. I didn't create this situation.

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On my recent travels about Amercia it has become obvious to me just how little even the educated Americans responsible for investments etc know about the true economic situation in the UK.

Same here in Ireland, they think that the UK is great and aspire to be like the UK with regards to house prices.

Not quite sure how much people in the UK realise how close Ireland is to the next bailout, but it is darn close. The banks are still bust and the second the 'market' / Germany realize that the banks balance sheets are a work of fiction and cut off Ireland from the Markets it will be bail in time.

The world economy reminds me of a giant cake, that is rotting from the inside, but vested interests are running around the outside making every thing look ok. Every now and then a peice falls off risking the collapse of the whole rotting thing. In reality they would be best spending the time and effort baking a new cake.

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On my recent travels about Amercia it has become obvious to me just how little even the educated Americans responsible for investments etc know about the true economic situation in the UK. If and when the foreign investors wake up and realise this we really are in the S**t. I think our MP's and VI's know this and have orchestrated this cordinated PR campaign to get the economy trundling forward again. Once the summer sun fades and retail figures drop then we shall see how good this "recovery" really is. Like many I cannot wait for the hopefuly inevitable bust of house prices but wonder what the social implications are going to be!

Why would you expect them to ? What happens in China, US, Japan and the EZ is far more important to them.

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What you missed is that Forex does not necessarily reflect long term fundamentals.

Very true. Liquidity is what drives markets first and foremost. Sentiment is second. Fundamental analysis comes a long way third. The idea that markets discount the future is baloney. When Bernanke gives the banksters free money they bid up prices, when he takes it away again they liquidate to repay the margin they've borrowed.

I suspect Wall Street is all too aware of the UK's potless condition but they have huge (mal)investments to protect and uphold. Those positions take a lot of unwinding. It's not in their interests to see them collapse uncontrollably.

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